X-Stock | HSG VND15,700 +1%: Facing Headwinds

BSC’S QUICK ASSESSMENT OF 1Q FY2026 BUSINESS RESULTS

Our view that domestic sales volume would recover remained in line with expectations. However, our expectation that export volume had bottomed out has not materialized. Based on our discussions with HSG and other steel companies, the key reasons are as follows:

• Escalating geopolitical tensions have made it increasingly difficult to export coated steel through third countries into major markets such as the US and EU, contrary to companies’ initial expectations.
• Changes in tax policies related to CBAM have affected year-end restocking demand in the EU market. As of end-January 2026, the EU had yet to announce the carbon credit price, which serves as the basis for calculating import taxes into the EU. Therefore, BSC believes exports could remain weak in 1Q2026 before orders recover on seasonal factors.
• Global construction investment demand remains generally weak. Based on our discussions with several companies in the sector, demand in the EU and US markets remains subdued. Current demand is mainly concentrated in India and the Asia-Pacific region.

Accordingly, in this report, BSC revises down its 2026 forecasts for HSG:

• BSC lowers its export volume forecast from -7% YoY to -10% YoY due to risks related to CBAM.
• This also leads BSC to revise down its gross margin forecast from 12.2% to 11.7%, mainly due to: (1) lower sales volume; and (2) flat HRC price movement with no meaningful breakout.
• For 2026, BSC forecasts HSG to record revenue of VND37,716bn, up 1% YoY, and NPAT-MI of VND536bn, down 27% YoY, equivalent to EPS of VND863/share. Compared with our previous report, BSC lowers its revenue forecast by 1% and earnings forecast by 19%.