“Hòa Phát invests nearly 10,000 billion VND into “steel fist” Dung Quat 2 in one quarter”

Shinhan Securities predicts that with a total capital of approximately 85,000 billion VND and a capacity of about 5.6 million tons of steel per year, the Dung Quat 2 project will be completed in the first quarter of 2025.


According to the Q4/2023 financial statement of Hoa Phat Group (HPG code), the Group’s revenue reached VND 34,925 billion, up 33% compared to the same period last year. The after-tax profit recorded VND 2,969 billion, an increase of 48% compared to the previous quarter.

Accumulated in 2023, Hoa Phat achieved VND 120,355 billion in revenue, a decrease of 16% compared to the same period last year. The after-tax profit was VND 6,800 billion, corresponding to 85% of the annual plan but only 1/5 of the record achieved in 2021.

Throughout the year 2023, Hoa Phat produced 6.7 million tons of crude steel, a decrease of 10%. The sales volume of HRC steel products, construction steel, high-quality steel, and steel billets reached 6.72 million tons, down 7%.

The company will continue to closely follow the investment progress of major projects, especially the Dung Quat 2 Steel and Iron Complex, to ensure effective management of the projects.

According to the update from Hoa Phat, as of the end of Q4/2023, the progress of the Dung Quat 2 project reached 45%, on track as planned. When completed, the Group’s steel production capacity will reach over 14 million tons of crude steel per year, ranking Hoa Phat among the top 30 largest steel companies in the world from 2025 onwards.

As of December 31, 2023, the construction cost item in progress reached over VND 26,036 billion, mainly in the Dung Quat Steel and Iron Complex project (Dung Quat 2) with over VND 22,555 billion. Compared to the end of Q3, this figure increased by over VND 9,820 billion, and compared to the beginning of 2023, it increased by over VND 13,000 billion.

Source: Hoa Phat’s financial statement

Hoa Phat is currently Vietnam’s leading industrial production group, operating in 5 sectors including Steel (construction steel, hot-rolled coil steel), Steel products (steel pipes, galvanized iron sheets, hot-rolled wire rods, container shells, and prestressed steel), Agriculture, Real Estate, and Home Appliances.

Steel production is the core business, accounting for 90% of the Group’s revenue and profit. With a capacity of over 8.5 million tons of crude steel per year, Hoa Phat is the largest steel manufacturer in Southeast Asia. The Group holds the No. 1 market share in Vietnam for construction steel, steel pipes, and is one of the top 5 largest galvanized steel manufacturers in Vietnam.

Hoa Phat currently has a total of 7 steelmaking blast furnaces, including 4 furnaces in Dung Quat and 3 furnaces in Hai Duong, with a production capacity of 8.5 million tons of crude steel per year. In addition, Hoa Phat has 1 electric arc furnace in Hung Yen to produce steel from scrap, with a capacity of 400,000 tons of steel per year.

In a recent announcement at the Annual General Meeting of Shareholders, Hoa Phat’s Chairman of the Board, Mr. Tran Dinh Long, affirmed: “We are putting all effort into the steel punch worth 3 billion USD. This project is equivalent to 1,000 small and medium-sized projects, equivalent to 100 other large projects that Hoa Phat carries out independently without any support from any foreign conglomerates”. This partly shows the importance of the Dung Quat 2 Steel and Iron Complex project to Hoa Phat’s future. Therefore, the project’s progress receives great attention from investors.

According to the plan, the Dung Quat 2 Iron and Steel Complex project will be completed in Q1/2025 with a capacity of 1.5 million tons/year for phase 1. The total design capacity of this project is 5.6 million tons/year, including 4.6 million tons of hot-rolled coil steel (HRC) and 1 million tons of special steel. Hoa Phat is expected to take about 3 years to operate the Dung Quat 2 at full capacity, raising the crude steel capacity to over 14 million tons/year.

In a recent report, Shinhan Securities forecasted that with a total capital of about VND 85,000 billion and a capacity of about 5.6 million tons of steel/year, the Dung Quat 2 project will be completed in Q1/2025, raising Hoa Phat’s crude steel capacity to over 14 million tons/year, an increase of 66% compared to the current level.

Shinhan Securities projects that Hoa Phat’s net profit after tax (NPAT) may increase by 135% in 2024 to VND 15,973 billion and then continue to increase by 47% to VND 23,407 billion in 2025.

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