Leading steelmaker Hoa Phat targets record revenue on partial operation of central Vietnam plant

Hoa Phat Group, Vietnam’s top steelmaker, targets a record-high revenue in 2025, driven by the expected partial operation of a steel and iron complex in the central region this year.

According to its 2025 business plan, Hoa Phat Group (HoSE: HPG) aims to generate VND170 trillion ($6.65 billion) in revenue, marking a 21% increase from 2024 and surpassing its previous peak of VND151 trillion in 2021.

The steel heavyweight also aims for VND34.5 trillion ($1.35 billion) in net profit in 2025, up 24.7% from last year and the second-highest annual profit on record.

HPG plans to distribute a 5% cash dividend and a 15% stock dividend from retained earnings this year, with the payout expected over a six-month period.

Hoa Phat has set ambitious business goals as the Hoa Phat Dung Quat 2 iron and steel complex, located in the central province of Quang Ngai, progresses on schedule. Its phase one is expected to become operational this year, while phase two is projected for completion by late 2025 or early 2026.

The project is designed to produce 5.6 million tons of high-quality hot-rolled coil (HRC) steel annually. Once fully operational, Hoa Phat’s crude steel production capacity will increase to 14.5 million tons yearly, including 8.6 million tons of high-quality HRC steel.

According to SHS Securities, the Dung Quat 2 project, once fully completed in 2026, will enhance HPG’s competitiveness, positioning it among the world’s top 30 steel producers.

Additionally, raw material and labor costs at Dung Quat 2 are expected to decrease due to its blast furnace capacity being twice that of Dung Quat 1 and the extensive application of automation technologies.

These factors will improve the competitiveness of Hoa Phat’s hot-rolled coil (HRC) products, expand its domestic market share, and enhance its ability to produce high-quality steel in the future, the broker noted.

However, Hoa Phat faces a significant output issue, as its increased production capacity comes at a time when global steel demand is projected to remain weak. This is largely due to sluggish demand from China and tariff policies.

On the other hand, domestic steel demand is expected to be positive, driven by public investment projects and a gradual recovery in the real estate market.

According to its 2024 earnings report, Hoa Phat Group (HoSE: HPG) recorded its highest yearly net profit in two years in 2024, at VND12.02 trillion ($479.27 million), up 77% from 2023.

HPG shares closed Thursday at VND27,500 ($1.08) each.