Posted on 24 Jun 2021
Viet Dragon Securities Corporation (VDSC) forecasts Hoa Phat’s second-quarter profit after tax will be about VND 10.2 trillion ($443 million), and then fall to VND 8.9 trillion in Q3. The results would be supported by strong hot rolled coil prices and demand from galvanised steel exporters, Kallanish notes.
VDSC believes Hoa Phat will face no difficulties in selling all its output, even though it is not the most competitive supplier in terms of price. This is due to strong HRC demand from domestic re-rollers and exporters of coated steel sheet. Exporters are using HRC substrate mainly from Hoa Phat, Formosa Ha Tinh or Indian imports to produce coated steel sheet, after receiving large orders from the EU and North American markets.
The analysts therefore expect Hoa Phat to sell some 690,000 tonnes of HRC in Q3, up 4% year-on-year. However, the gross profit margin of its construction steel segment may decrease because of weak demand and rising costs. Construction products have already seen a monthly decline in sales in May.
Source:Kallanish
