Vietnam's steel giant Hoa Sen spins off retail arm with $38 mln investment
Hoa Sen Group (HoSE: HSG), one of Vietnam’s largest steel producers, has decided to establish a new subsidiary, Hoa Sen Home JSC, with charter capital of VND1 trillion ($37.98 million) to expand its construction materials retail business.
According to a corporate filing on Wednesday, Hoa Sen Group will hold a 99% stake in the new company, headquartered in Thu Duc city of Ho Chi Minh City. The unit will specialize in retailing hardware, paints, glass, and construction materials and fixtures.
Hoa Sen Group's chairman Le Phuoc Vu will represent HSG’s ownership and oversee any future capital increases in the venture.
A Hoa Sen Home store. Photo courtesy of the chain
Launched in 2021, the Hoa Sen Home retail chain currently operates 126 outlets nationwide. The company plans to open 20 new stores in 2025, expanding to 140 locations, and targets 300 outlets by 2030 through the addition of 25-35 stores annually from 2026 onward.
The retail network generated VND13.3 trillion ($505.13 million) in revenue in 2024 and aims for VND15 trillion ($569.69 million) in 2025 and VND33 trillion ($1.25 billion) by 2030.
Hoa Sen projects a compound annual growth rate (CAGR) of 16.3% from 2024 to 2030, with its Hoa Sen Home-branded products expected to grow at 50% CAGR.
Vu, who previously described Hoa Sen Home as his “final major effort” before stepping back from leadership, said the retail business would be a core driver of future growth.
“There’s no reason to keep Hoa Sen Home confined within the parent company,” Vu said. “With Vietnam’s growing economy and population, achieving several billion dollars in revenue, or even $10 billion, is absolutely possible.”
To reach its expansion goals, Hoa Sen estimates it will require VND3.6 trillion ($136.73 million) for store development, VND1.4 trillion ($53.17 million) for 12 distribution hubs, VND400 billion ($15.19 million) for technology upgrades, and VND600 billion ($22.79 million) for marketing by 2030.
HSG shares closed down 0.29% to VND17,050 ($0.65) each on Thursday.
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