Dragon Capital becomes major shareholder in top steelmaker Hoa Sen

Leading fund management company Dragon Capital has bought a further 1.1 million shares in Vietnam's leading steel sheet producer Hoa Sen, raising its ownership ratio from 4.86% to 5.05%, equivalent to more than 30.1 million shares.

The transaction makes Dragon Capital a major shareholder in the steelmaker, listed on the Ho Chi Minh Stock Exchange (HoSE) as HSG.

Amersham Industries Limited fund has also bought 1 million HSG shares, and Samsung Vietnam Securities Master Investment Trust fund (Equity) has purchased 100,000 HSG shares.

In March, Hoa Sen set a target of VND34-36 trillion ($1.44-1.52 billion) in revenue in the 2022-2023 fiscal year.

At the group’s annual general shareholders' meeting on March 10, Hoa Sen said it aims to sell 1.5-1.6 million tonnes of steel of all kinds for after-tax profit of VND100-300 billion ($4.22-12.67 million) during the fiscal year, which started on October 1, 2022.

Hoa Sen chairman Le Phuoc Vu reported that in the 2021-2022 fiscal year, the firm sold over 1.8 million tons of steel products, earning VND49.7 trillion ($2.1 billion) in revenue and VND252 billion ($10.64 million) in after-tax profit, fulfilling 91%, 107% and 17% of its targets, respectively.

Hoa Sen reported after-tax profit of VND251 billion ($10.7 million) in the fiscal year 2021-2022 from October 1, 2021 to September 30, 2022, down 94% year-on-year and fullfilling 10% of its target. The group's net revenue reached VND49.71 trillion ($2.12 billion), up 2% and fullfilling 16.7% of the target, according to its consolidated financial statement.

As of December 31, 2022, Hoa Sen's total assets had fallen by 6.2% compared to the beginning of the year to VND15.96 trillion ($679.73 million). Of this, inventory hit VND5.98 trillion ($254.65 million), accounting for 37.5%.

The group's total short-term and long-term loans were VND2.69 trillion ($114.69 million), down 35.7% compared to the beginning of the year, accounting for 16.9% of total capital.

In the first quarter of fiscal year 2022-2023, Hoa Sen posted net revenue of VND7.92 trillion ($337.12 million), down 53.2% year-on-year and a loss of VND680.2 billion ($28.96 million), while the same period last year saw a profit of VND638.3 billion ($27.18 million).

On the Ho Chi Minh Stock Exchange, the HSG share price hit VND16,200 ($0.69) at Monday's close.