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HPG – Solid growth in 1Q2018 – Update

Company Note 11/05/2018    151

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  • HPG’s 1Q18 net profit rose 14.3% yoy, driven by higher sales volume and the continued growth momentum of steel prices.
  • Gross margin declined to 22.8% in 1Q18, in line with our expectations.
  • The company’s galvanised steel plant has been operating since Apr 2018 and will be one of the key earnings growth drivers from 2H18F onwards, in our view.
  • The first production line of Dung Quat Steel Complex project is expected to come on stream in 3Q18 with capacity of 600,000 tonnes per year.
  • We lower our target price to VND77,300 per share (from VND80,000) due to a higher risk-free rate and recent market re-rating, but we reiterate our Add recommendation..

Market Price

Target Price

Dividend Yield

Rating

Sector

VN55,200

VND77,300

0.00%

Add

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