Hoa Phat Profits to Improve on Firm HR Demand in Vietnam
VNS reported that Viet Dragon Securities Corporation in a recent report said that hot rolled coil plays an important role in Hoa Phat Group’s business activities as the steel producer is benefiting from higher HRC prices and strong demand from galvanised steel exporters. VDSC believes that Hoa Phat will not face any difficulties in consuming all output despite the selling price tending to be higher than that of some Chinese factories. It said “This is due to strong demand for HRC from domestic exporters of coated steel sheets. Steel companies are receiving large orders from the EU and North American markets, which have banned China's HRC. To meet the origin requirements of the base steel, domestic manufacturers of coated steel sheets mainly use HRC from HPG, Formosa, or India.”
VDSC expects Hoa Phat to sell about 690,000 tonnes of HRC (both internal and external) in the third quarter, up about 4 per cent compared to same period last year. However, the gross profit margin of the construction steel segment may decrease due to weak demand and increased production costs.
VDSC forecasts the company’s profit after tax will be about VND10.2 trillion in the second quarter of this year and fall to VND8.9 trillion.