Hoa Sen Group – Underperform (HSG : HSX – Industrial Metals)

Hoa Sen Group – Underperform (HSG : HSX – Industrial Metals)


  • HSG has published its agenda for the January 14 AGM.


  • HSG has set out mixed targets for FY2019 looking for NPAT growth of 22.2% y/y, while the top line will fall 8.5% y/y.


  • The Company proposes a special bonus scheme for BOD, BOM members and key management team members if actual results exceed the target.


  • Prospects for the flat steel segment look tough in both export and domestic markets given oversupply.


  • Possible sale of a real estate project offers some upside potential to earnings this year.


  • For FY2019 as a whole, HSC forecasts net sales of 31,693 billion (-8.0% y/y) and NPAT of VND 453.1 billion (+10.7% y/y) on an expected recovery in margins and the booking of extraordinary profit from real estate.


  • Our fair value for HSG is VND 6,300 per share giving us a forward FY2019 P/E of 5.8x, and core forward P/E of 9x.


  • Reiterate Underperform.



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