Vietnam’s steel giant Hoa Sen plans future IPOs of subsidiaries as 2026 profit outlook weakens

Hoa Sen Group (HoSE: HSG) plans to spin off and eventually list several key subsidiaries, particularly its Hoa Sen Home retail chain, as the Vietnamese steelmaker restructures its business while forecasting weaker profits in the coming fiscal year.

The company outlined the strategy at its AGM on Saturday for the 2025–2026 financial year, which runs from October 1, 2025 to September 30, 2026.

Hoa Sen proposed two business scenarios for the period. Under the first, revenue is expected to reach VND35 trillion ($1.33 billion), down 4.2% from the previous fiscal year, while net profit is projected to fall 32% to VND500 billion ($19.02 million).

In a more optimistic scenario, revenue could edge up to VND37 trillion ($1.41 billion), up 1.3% increase, though net profit would still decline 18.4% to VND600 billion ($22.83 million).

The firm will accelerate plans to equitize and eventually list subsidiaries, particularly the Hoa Sen Home retail network and its plastics business.

Hoa Sen Home, established in January with charter capital of VND1 trillion ($38.05 million) and 99% owned by Hoa Sen, is expected to raise capital in stages before pursuing an initial public offering (IPO), the board said.

The company plans to increase Hoa Sen Home’s charter capital to VND3 trillion ($114.14 million) by allocating 200 million shares through a rights issue at VND10,000 ($0.38) per share, while up to 30 million shares may be offered to executives and key employees at the same price.

In later phases, the unit could raise additional capital to VND5-10 trillion ($380.55 million) before proceeding with an IPO and listing on the stock market.

Hoa Sen said it may distribute around VND3 trillion ($114.14 million) from retained earnings as cash dividends, allowing shareholders to use the proceeds to purchase shares in Hoa Sen Home.

The group is also considering a similar strategy for its plastics segment. Previous plans to spin off the plastics business had been delayed due to low liquidity among listed plastics companies, though the board said the option remains under consideration.

Following the restructuring, Hoa Sen said the group will focus primarily on steel sheet manufacturing and exports, while the retail and plastics businesses operate independently. The company expects its workforce to shrink to around 3,000 employees, down from more than 8,000 currently.

Over the longer term, Hoa Sen expects the scale and revenue of the Hoa Sen Home retail network to surpass that of its core steel business as the chain expands nationwide.

At the meeting, shareholders also approved a 30% stock dividend for the 2024-2025 financial year and authorized the board to implement the distribution.

The company also scrapped a previously approved share buyback plan of 50-100 million shares, adding that it will instead prioritize capital for strategic initiatives such as expanding production capacity, broadening export markets, and accelerating the rollout of the Hoa Sen Home retail network as it shifts toward a broader building materials and home interior ecosystem.

HSG's consolidated revenue for the year ended September 30, 2025 fell 7% from a year earlier to VND36.5 trillion ($1.4 billion), while net profit jumped 42% to VND732 billion ($28.14 million), driven mainly by stronger gross margins.

HSG shares ended down 6.76% to VND13,800 ($0,53) each on Monday.