CONSOLIDATE THE LEADING POSITION

We initiate coverage of HPG Corporation (HPG VN) with Overweight recommendation and a 12-month target price of VND 34,300 per share, implying an upside of 23.8%, using the Discounted Cash Flow (DCF) method. Key investment thesis include:

• Vietnam’s anti-dumping tax on China imported HRC steel will help narrow the price gap between foreign and domestically produced goods, helping HPG to boost sales especially when phase 1 of the Dung Quat 2 project is expected to operate in Q2.2025.

• Domestic steel consumption demand continues to be driven by public investment policy to support growth and expectations of a recovery in the real estate market.

• Raw material prices are forecast to remain low, which will support HPG in maintaining its gross profit margins.

• Dung Quat 2 project, after being fully completed from 2026, will enhance competitiveness, bringing HPG into the Top 30 leading steel producers in the world.

• Financial situation is tightly managed with large cash, debt maintained at safe levels.

• Projected revenue in 2025 is VND 155,000 billion (+11.6% YoY) and VND 12,591 billion profit after tax (+4.8% YoY) corresponding to EPS of VND 1,969/share.