Hoa Phat Group (HOSE: HPG) | Q1 2026 Update, BUY - 1Y Upside +28.9%

Exceptional Q1 Performance; Reinforcing Industry Dominance Position

HPG delivered a very strong set of Q1 2026 results, with earnings reaching a record high driven by the continued ramp-up of Dung Quat 2, improving domestic steel demand, and stronger steel spreads. Revenue rose 40% YoY to  VND 53,313bn (+40.6% YoY), while NPAT surged 170% YoY to 8,994bn, a staggering 168.9% YoY growth, supported by higher sales volumes and margin expansion.

Gross profit margin improved to 15.8%, compared with around 14.4% in the same period last year, reflecting both better operating efficiency as DQ2 ramped up to full capacity. The strong NPAT-MI was also  contributed by a VND 4,916bn one-off gain from divestment of the QL5 Urban Area project. Excluding the one-off gain, the performance remained exceptionally robust, with core NPAT-MI growing 51.3% YoY to VND 5,062bn.

Domestic demand remained the key earnings driver duringQ1 2026 , supported by strong macroeconomic conditions and accelerating public investment. Vietnam’s GDP grew 7.83% YoY in Q1 2026, while construction and infrastructure activity continued to improve. In contrast, export markets remained challenging amid weak global demand, aggressive Chinese steel exports, and rising trade protection measures.

By segment: In Q1 2026, the steel segment remained the primary powerhouse, delivering VND 50,859bn in revenue (+28.2% YoY) and VND 4,588bn in NPAT (+61.0% YoY). HPG continued to strengthen its leadership position in Vietnam’s steel market,  with construction steel market share remained stable at around 36%.

Crude steel output increased 25% YoY to 3.3mn tons, while total finished steel sales rose 26% YoY to 3.0mn tons. Hot-rolled coil (HRC) is the key growth driver with sales increasing nearly 48% YoY to 1.4 mn tons. Domestic demand for HRC remaines strong thanks to increased manufacturing and infrastructure development.

Conversely, the Agriculture segment (HPA) faced headwinds with revenue falling 11.3% YoY to VND 1,764bn due to lower pig prices but volume is recovering.

The Real Estate division recognized an one-off gain of VND 4,123bn in NPAT from the Pho Noi project transfer. In addition, core net margins also improved significantly to 68.5%.

Q1 2026 Financial Performance

·       Total revenue: VND 53,313bn (+40.6% YoY, +14.6% QoQ)

·       PBT: VND 10,762bn (+180.3% YoY, +134.0% QoQ)

·       NPAT-MI: VND 8,994bn (+168.9% YoY,+132.9% QoQ)

·       Core NPAT-MI: VND 5,062bn (+51.3% YoY,+31.1% QoQ) exclude one-off gain from real estate project transfer at Pho Noi (QL5 Urban Area),

We maintain a BUY recommendation for HPG with a 12-month target price of VND 35,900/share, offering a potential upside of 28.9% compared to the closing price of VND 28,850/share on May 08, 2026.