Vietcap’s analysis indicates that Hoa Phat (HPG) will break ground for a rail and section steel factory on August 19, 2025, expected to complete by Q2 2027. The factory will have an annual capacity of 700,000 tons and an investment of 14 trillion VND, with 10 trillion VND allocated for basic construction. The project aims to supply steel for major railway projects. Annual revenue is projected at about 11.4 trillion VND, contributing 150 billion VND to the state budget. HPG will benefit from a preferential corporate income tax rate of 17% in the first 10 years, leading to a pre-tax profit of 773 billion VND, equivalent to a 7% profit margin. Vietcap believes that HPG will benefit from strong construction infrastructure demand, especially with a significant increase in public investment disbursement. Although the profit margin is lower compared to other steel segments, global trends recovering could help raise domestic steel prices and improve profitability for HPG.
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