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HPA – IPO Roadshow – Attractive investment opportunities

• In January 2026, HPA plans to list on the HOSE with an offering price of 41,900 VND/share with a total offering of 30 million shares. The offering price is equivalent to the P/E forward 2025 after issuance at 8.0x at NPAT-MI of VND 1,500 billion. In addition, the company maintains its commitment to maintain a minimum cash dividend of 3,000 VND/share/year, equivalent to a dividend yield of about 7-8%.
• The company expects profit after tax to increase from VND 1,500 billion (2025) to VND 1,750 billion (2030) based on expanding pig capacity to 900,000 pig/year, feed to 1,000,000 tons/year and cows to 73,000 cow/year.
• Compared to small businesses, HPA has the advantage of feed autonomy, closed processes, and imported breeds. However, compared to major competitors in the industry such as C.P, BAF or DBC, we found that HPA does not have too many competitive advantages in terms of breeds and technology. Instead, the business has taken advantage of the shortage of breeding pigs due to the epidemic to increase the ratio of breeding pigs to total commercial pigs to help the business maintain a high gross margin when the total commercial pigs of the enterprise is lower than that of major competitors.
o The ratio of commercial breeding pigs/total commercial pig herd will increase from 19% in 2023 to 40% in 9 months of 2025 compared to this rate of DBC of about 6.9% in 2025 and BAF of about 13% in 2023 due to the higher number of commercial pigs of BAF and DBC.
• In the long term, the expansion of the farming area will lead to a gradual decrease in gross margin when the cost of the farming area is high (3 times higher than in the past) as well as the ratio of breeding pigs/commercial pigs gradually decreases. Therefore, we expect gross margin to gradually decrease in the long term and approach that of leading enterprises, but EBIT still grows thanks to output.
• HPA's investment risks are mainly focused on the decline in the price of live hogs in the whole industry and the increase in feed costs due to the increase in soybean prices. In addition, the gradual decrease of small households will affect the sale of breeding pigs of enterprises. However, we realize that HPA will have the right strategies to develop, for example, encroaching into the Food segment if the sale of breeding pigs is no longer favorable.