Steel exports are more than 1 billion dollars, but Hoa Sen still mainly "makes money" from the domestic market

Steel exports are more than 1 billion dollars, but Hoa Sen still mainly "makes money" from the domestic market
SSI Research estimates that HSG's consumption volume in 2022 will increase 2% to 2.3 million tons, of which the domestic channel is estimated to increase 11% to 1.12 million tons. However, export volume is estimated to decrease -6% to 1.16 million tons.
Updated at 11:30 on Thursday, December 30, 2021View business profile
NEWS
Officially owning Big Cat – Yeah1 eDigital strengthens the core ecosystem
Officially owning Big Cat – Yeah1 eDigital strengthens the core ecosystem
Businesses refuse orders because of "thirst" for labor
Businesses refuse orders because of "thirst" for labor
Aviva completed selling its Vietnam business to Manulife after 1 year
Aviva completed selling its Vietnam business to Manulife after 1 year
Hoa Sen Group Joint Stock Company has just announced its audit report for the year 2020-2021. The revenue and profit figures of Hoa Sen remained unchanged compared to the figures announced before the audit.

Accordingly, HSG's net revenue this year reached VND 48,726 billion, up 77% over the same period last year, profit after tax reached VND 4,313 billion, 3.7 times higher than the same period last year. Earnings per share (EPS) reached VND 8,465, nearly 4 times higher than the same period last year.

Although the economy was heavily affected by Covid-19, many provinces and cities across the country had to social distance, but Hoa Sen's domestic revenue still increased by 17%, reaching nearly 20,400 billion. Meanwhile, the bright spot was in the export segment with VND 28,329 billion in revenue, 2.8 times higher than the same period last year and this is also the first year that exports have become a "salvation" for the consumption of Hoa Sen's output. .

Exporting steel more than 1 billion dollars, but Hoa Sen still mainly earns domestic food - Photo 1.
Export nearly tripled in the same period last year

However, the sharp increase in transportation and shipping costs has reduced the efficiency of exports. If Hoa Sen's domestic profit margin reaches 30% in 2021, the profit margin of the export segment will only reach 9.7% (5.1%). Profit from the domestic market reached more than 6,124 billion VND, 2.2 times higher than export although the revenue was less.

Exporting steel more than 1 billion dollars, but Hoa Sen still mainly earns domestic food - Photo 2.
The data shows that Hoa Sen's export expenses this year amounted to more than VND 1,700 billion, accounting for nearly half of selling expenses and 3.8 times higher than the same period last year. Transportation costs reached VND 356 billion, an increase of 62.5% over the same period last year, so every day Hoa Sen collects VND 133 billion in revenue and VND 11.8 billion in profit after tax. 1 billion VND/day.

Meanwhile, employee costs fell, from 884 billion last year to 643 billion this year.

Exporting steel more than 1 billion dollars, but Hoa Sen still mainly makes food from the domestic - Photo 3.

Payable data shows that Hoa Sen buys HRC input materials from Formosa Ha Tinh and some other suppliers.

Exporting steel more than 1 billion dollars, but Hoa Sen still mainly makes food from the domestic - Photo 4.
Hoa Sen's total assets as of September 30, 2021 reached VND 26,618 billion, an increase of 50% over the same period last year, of which inventories more than doubled, reaching VND 12,349 billion compared to more than VND 5,500 billion in the same period last year. period of the previous year. Hoa Sen's equity increased sharply to 10,800 billion VND (up 64% over the same period last year) due to an increase of 500 billion VND in share capital and 2.8 times increase in undistributed profit to 5,633 billion VND.

Analyst report of SSI Securities JSC estimates HSG revenue to be almost unchanged at VND 49.3 trillion (+1.2% YoY) in FY 2022, while net profit will decline by -30% down 3 trillion. The reason is that the price of galvanized steel in the long term is likely to fluctuate according to the trend of hot rolled steel (HRC). The HRC price has recently corrected 10%-20% from its peak due to slowing demand and falling iron ore prices. Although selling prices in the US are still high, SSI Research believes that the difference between the US market and other regions will narrow in 2022 due to the stabilization of the global supply chain, and the protectionist policy of the US on the US market. with steel imported from some countries such as EU, Japan,...

Therefore, the profit margin from the export channel may decrease from the high level in 2021. In addition, steel companies may not benefit significantly from cheap inventory in 2022 as in 2021.

Exporting steel more than 1 billion dollars, but Hoa Sen still mainly makes food from the domestic - Photo 5.
Net profit margin of corrugated iron companies decreased significantly in the third quarter of 2021 (the fourth quarter of the fiscal year)

SSI Research estimates that domestic flat steel demand will increase by ~10% in 2022 due to pent-up demand and recovery in construction activity in the real estate and industrial zones. However, export output may slow down due to stable global supply chain. Therefore, contribution from the domestic channel may increase in 2022.

SSI Research estimates sales volume

+ OTHER POST:

• China suspends import of Vietnamese dragon fruit for 4 weeks(29.12.2021)
• The first province to export shrimp over 1 billion USD(28.12.2021)
• Clearing up the consumption and export of agricultural products(27.12.2021)
• Exports to Eurasia have not yet taken advantage of many FTAs(26.12.2021)
• Vietnam's import and export is ready to "speed up", surpassing the $660 billion mark(25.12.2021)
• Spectacular escape, seafood export to the destination of 8.9 billion USD(25.12.2021)