Hoa Sen shares strongly attract foreign cash flow

Foreign investors extended their streak of pouring money into HSG for 4 consecutive sessions with net buying value in the session on June 17 reaching 106 billion VND, the highest in the past 3 years.

After two sessions of decline last weekend, shares of Hoa Sen Group (stock code: HSG) went against the market trend to skyrocket in the first session of the week. This stock closed at the ceiling price of VND25,150 with no sellers. This increase continued to help HSG break the 2-year peak set in the middle of last week.

HSG shares have increased by nearly 14% compared to the price range at the beginning of the year. The market capitalization of this enterprise has also increased accordingly to 15,492 billion VND.

Not only did HSG's market price increase, its liquidity also improved significantly in the first trading session of the week when it led the Ho Chi Minh City Stock Exchange in terms of matched value with VND1,082 billion, 2.5 times higher than the session at the end of last week. This value came from more than 43.7 million shares successfully transferred.

HSG's early-week increase was strongly supported by foreign cash flow. Specifically, foreign investors spent VND164 billion to buy more than 6.6 million shares while selling only more than 2.3 million shares, equivalent to VND58 billion. This was the strongest net buying session of foreign investors for HSG in the past 3 years. Not only that, foreign investors also extended their net buying streak into HSG for the fourth consecutive session with increasing value.

In addition to the momentum from foreign investors' cash flow, HSG shares today also received support after the authorities took action to investigate and apply anti-dumping measures on galvanized steel products from abroad. Specifically, on June 14, the Ministry of Industry and Trade also issued Decision No. 1535/QD-BCT on investigating and applying anti-dumping measures on some galvanized steel products originating from China and South Korea.

The decision to conduct an investigation was issued based on the results of the appraisal in accordance with the provisions of the Law on Trade Remedies for the Dossier requesting investigation to apply anti-dumping measures, which was fully and validly submitted on May 3, 2024 by enterprises representing the domestic manufacturing industry including Hoa Sen, Nam Kim, Ton Phuong Nam, Ton Dong A, China Steel & Nippon Steel Vietnam.

In a recently published report, KB Securities Company said that HSG will benefit the most in the event that anti-dumping measures against galvanized steel imported from China and South Korea are applied thanks to its No. 1 and No. 2 market shares in galvanized steel (28.4%) and steel pipes (12.4%). In addition, domestic consumption is showing signs of recovery as galvanized steel and steel pipes consumption increased by 29% and 28% respectively compared to the previous month. Domestic consumption is expected to recover strongly in the second half of this year thanks to the gradual recovery of the civil real estate sector, followed by newly implemented projects that will stimulate domestic steel demand.

KB Securities' analysis team recommends investors buy HSG shares with a target price of VND27,400. With a more optimistic view, in a report published in April, Tien Phong Securities Joint Stock Company (TPS) expects HSG's target price in the next 1 year to be VND28,400.

According to TPS, HSG's growth momentum comes from three main factors. First, it is expected that business results may recover in the 2023-2024 fiscal year thanks to the warming up of real estate activities, the improvement in domestic construction demand when interest rates remain low and the Government's measures to remove difficulties for the real estate industry are effective. Next, Hoa Sen's gross profit margin may continue to improve thanks to the accumulation of cheap inventories. The last factor is that steel exports to major markets such as the US and EU continue to grow.

Regarding business activities, in the second quarter of the 2023-2024 fiscal year (from January 1, 2024 to March 31, 2024), Hoa Sen recorded revenue of VND 9,248 billion and after-tax profit of nearly VND 319 billion, up 32.5% and 27.3% respectively over the same period. In the first 6 months of the fiscal year, the company recorded revenue of more than VND 18,321 billion, up 23%. After-tax profit had a big change when the same period last year's loss of VND 424 billion turned into a profit of VND 422 billion.

In the 2023-2024 fiscal year, Hoa Sen plans to do business with two scenarios. Specifically, scenario 1 targets a sales output of 1,625 thousand tons, up 13.3% over the same period. Revenue is expected to be 34,000 billion VND, up 7.4% over the same period, and after-tax profit is expected to be 400 billion VND, up more than 12 times over the previous fiscal year.

Scenario 2 targets an estimated total output of 1,730 thousand tons, up 20.7% year-on-year. Revenue is expected to reach VND36,000 billion, up nearly 14%, and after-tax profit is expected to reach VND500 billion, up more than 15 times compared to the previous fiscal year.

Source: https://baodautu.vn/co-phieu-hoa-sen-hut-manh-dong-tien-nuoc-ngoai-d217866.html