Vietcap Mobile App 
Vietcap Trading 
Download Vietcap Pro 
Open Account 
Vietcap IQ 
User Guides 
HSG announced its 9M FY2024 results with net revenue of VND29.2tn (USD1.15tn; +24% YoY; 76% of our FY2024F forecast) and NPAT-MI of VND696bn (USD27.3mn; 79% of our FY2024F forecast). In Q3 FY2024, net revenue was VND10.8tn (USD423.5mn; +17% QoQ, 25% YoY) and NPAT-MI was VND273bn (USD10.7mn; -14% QoQ, +18x YoY). We note that HSG’s financial year-end is September 30.
- 9M FY2024 revenue surged on higher volume, partially offset by lower ASP: According to Vietnam Steel Association, HSG’s total sales volume of steel pipes and galvanized steel sheets surged by 40% YoY to 1.4mn tonnes (82% of our FY2024F forecast) during 9M FY2024 from 9M FY2023’s 1mn tonnes, which we attribute to recovering domestic and exports demand from last year’s low base. However, ASP declined YoY which we think is due to increasing competition from Chinese low-price steel exports to both Vietnam and the global market. In Q3 FY2024, total sales volume of steel pipes and galvanized steel sheets was 515,300 tonnes (+16% QoQ; +38% YoY).
- 9M FY2024 GPM expanded YoY from a low base: 9M FY2024 GPM expanded to 11.7% from 8.4% in 9M FY2023 despite lower YoY ASP, attributed to low input HRC prices due to China’s weak demand. In Q3 FY2024, GPM was 12.3%, a further improvement from Q2 FY2024’s 12.1% and Q3 FY2023’s 10.3%. This development is in line with our expectation.
- Net FX gain normalized in Q3 FY2024: In Q3 FY2024, HSG’s net FX gain normalized to VND4bn (USD0.2mn) from an abnormal gain of VND124bn (USD4.9mn) in Q2 FY2024.
We expect minimal changes to our FY2024F net revenue forecast, with potential upside for sales volume, offset by downside risk for ASP (as we currently expect FY2024F ASP to recover 3.7% YoY). However, we foresee slight upside potential to our FY2024F NPAT-MI forecast as we have not factored the abnormal net FX gain in Q2 FY2024 into our current model.
HSG’s 9M FY2024 results
VNDbn | Q3 FY2023 | Q2 FY2024 | Q3 FY2024 | QoQ | YoY | 9M FY2023 | 9M FY2024 | YoY | FY 2024F | 9M as % of FY2024F |
Revenue | 8,646 | 9,248 | 10,840 | 17% | 25% | 23,544 | 29,162 | 24% | 38,378 | 76% |
Gross profit | 892 | 1,117 | 1,337 | 20% | 50% | 1,986 | 3,404 | 71% | 4,682 | 73% |
SG&A expenses | -836 | -913 | -1,030 | 13% | 23% | -2,248 | -2,782 | 24% | -3,556 | 78% |
Operating profit | 56 | 204 | 307 | 51% | 447% | -262 | 621 | N.M. | 1,127 | 55% |
Net interest income/(expense) | -55 | -29 | -39 | 37% | -28% | -160 | -93 | -41% | -122 | 77% |
Net FX gain/loss | 3 | 124 | 4 | -97% | 43% | 24 | 148 | 517% | 42 | 348% |
Other gain/loss | 8 | 14 | 16 | 11% | 99% | 46 | 40 | -12% | 52 | 78% |
PBT | 12 | 313 | 287 | -8% | 2253% | -352 | 716 | N.M. | 1,099 | 65% |
NPAT-MI | 14 | 319 | 273 | -14% | 1833% | -410 | 696 | N.M. | 879 | 79% |
GPM | 10.3% | 12.1% | 12.3% |
|
| 8.4% | 11.7% |
| 12.2% |
|
SG&A exp./Sales | 9.7% | 9.9% | 9.5% |
|
| 9.5% | 9.5% |
| 9.3% |
|
OPM | 0.6% | 2.2% | 2.8% |
|
| -1.1% | 2.1% |
| 2.9% |
|
NPM | 0.2% | 3.4% | 2.5% |
|
| -1.7% | 2.4% |
| 2.3% |
|
Source: HSG, Vietcap. Note: HSG’s financial year-end is September 30.
Powered by Froala Editor
