Vietnam's galvanized steel major Ton Dong A to focus on domestic sales amid export market woes

Ton Dong A, a leading galvanized steel manufacturer in Vietnam, will focus more on the domestic market due to export difficulties, raising the ratio of domestic sales to 75%.

Ton Dong A Joint Stock Company, registered on the unlisted public companies market (UPCoM) as GDA, held its 2025 AGM on Thursday.

At the meeting, Nguyen Thanh Trung, chairman of the board of directors, said that since the end of 2024, the world's geopolitical situation has had many turbulences, which have affected the global economy and trade systems. "Vietnam is deeply involved in economic relations with the world, so it is inevitably affected."

In that context, the Vietnamese steel industry has been facing major challenges related to tariff barriers, notably trade protection tools like anti-dumping measures from countries in North America, Europe and even Southeast Asia.

Domestically, Vietnam is recording good economic growth, with domestic purchasing power somewhat rising thanks to increased public and private investments. The real estate industry has stabilized and entered a new development cycle.

Over the many years, Ton Dong A has enhanced exports which were equivalent to 59% of the company's total sales in 2024.

However, given the changes in global trade flows, the chairman said that there has been market restructuring at Ton Dong A, with domestic sales enlarged to offset the decline in exports.

The company aims to increase the proportion of domestic sales to 75% and maintain the tally for export at 25%.

Ton Dong A expects that by the end of 2025 and early 2026, when global trade relations stabilize and enter a new cycle, it will develop "a more suitable plan".

Trung said that the company's domestic sales in the year to end-May had increased to nearly 70%. This demonstrates its position in the domestic market and its flexibility to participate in the domestic segments that it did not join before as well as to seek export markets that it did not previously target.

Ton Dong A has stopped exporting to the U.S. since October 2024 - the time when Donald Trump was about to hold the position of the U.S. President. However, the U.S. is a market where the company has a foundation, prestige and brand, so when the world situation stabilizes, it will again promote sales in this market.

The company will continue to implement strategic projects, expand its production scale, and enhance global competitiveness, notably the fourth factory project in the Phu My Specialized Industrial Park with a total annual capacity of 1.2 million tons.

According to the plan, phase 1 with a capacity of 300,000 tons/year will be put into operation from 2026. However, due to unfavorable market conditions, the company has proactively extended the construction schedule.

The chairman said that Ton Dong A is applying for a license and expects to be able to build the factory in September 2025. From the start of construction to the launch of products, it will take about 1.5 to 2 years.

“Ton Dong A has set out a medium-term plan for eight years. Over the course of national development and when the global stituation stabilizes, we will see the potential for market development. Galvanized steel sheet products can be used in many industries, such as construction, household appliances, automobiles, or very large projects in Vietnam like the North-South high-speed railway,” said Trung.

In addition to the steel sector, the company plans to invest in real estate. Ton Dong A has established Dong A Central Region Investment and Real Estate Company Limited to implement a 6.5-hectare, low-rise housing project in Danang city.

Compensation and site clearance work has been completed by about 70%. The company has been approved by the Da Nang government to execute the first two phases of the project.

The company's leaders expect the selling price to be about VND11 million ($422) per square meter, leading to estimated revenue of VND350-450 billion and profit of about VND150 billion ($5.75 million).

Currently, the average price of the products in the areas around the project is about VND13.5 million/m2, so the leadership said they are quite confident it will contribute to business results from 2026-2027.

Moving to the HoSE in 2025-2026

Shareholders approved the targets of VND18,000 billion in revenue and VND300 billion ($11.51 millon) in after-tax profit for 2025, respectively down 6% and 12.3% compared to 2024.

According to the consolidated financial statements, Q1/2025 revenue was equivalent to the same period last year, at VND 3,977 billion ($152.55 million). However, gross profit margin decreased from 8.45% to 7%.

Ton Dong A significantly reduced costs, but after-tax profit in the quarter reached only VND62.7 billion ($2.41 million), down 34% year-on-year.

Total sales in Q1 hit 197,287 tons, down 3% year-on-year, and the average price also decreased by 3%. There was a clear shift in the sales structure toward domestic sales.

The domestic market accounted for 59% of total sales with 117,130 tons, up 86% year-on-year. Some of the main drivers came from public investment spending (infrastructure projects in the fields of transportation, roads, and manufacturing), inventory re-stocking activities from distributors and customers to prepare for the peak consumption cycle of the year, and the demand for construction, civil construction, repair, and factories.

Export reached 31,283 tons, making up 41% and decreasing by 43% compared to the same period last year. The reason is the great pressure from international trade defense measures.

A matter of considerable concern at the AGM was the plan to move to the Ho Chi Minh Stock Exchange (HoSE). The company registered its shares on the UPCoM in September 2023 and now wants to list on the major bourse.

The chairman assessed that the financial market situation is not favorable for listing shares at the moment. However, submitting the plan for shareholders' approval is the legal basis for the board of directors to choose an appropriate time to proceed, creating benefits for all shareholders. The implementation time is in 2025-2026.

Another important issue presented by the board at the meeting was a change in the dividend payment plan. According to the original plan, the company would pay dividends in 2023 and 2024 at a rate of 10% in cash and 20% in shares. However, for the 2023 dividend, the company has only paid cash dividends. Shares have not been paid and the board proposed to cancel it.

Instead, the 2024 dividend will be raised to a maximum of 40% of par value, including 10% in cash and 30% in shares. This, according to the leaders of Ton Dong A, is to optimize the process of completing documents and the implementation time.

Cash dividends will be paid in advance on June 12 with the record date of May 13. Share dividends will be paid in 2025-2026, with the expected number of shares issued being 34.4 million units, and the charter capital will increase from VND1,147 billion to VND1,491 billion ($57.18 million).

In addition to the plan to increase the capital through dividend payments, Ton Dong A also plans to issue ESOP shares, at a maximum rate of 3% of the total number of outstanding shares at the time of implementation.

The issuance price is not lower than the par value and ESOP shares are restricted from transfer for two years.