(HSV VIETNAM GROUP) - With expectations for key public investment projects at the end of the year, iron and steel is on the rise at the end of the year, this is an opportunity for HSV to take profits when holding a large inventory.
Although compared to the previous year, the results of steel industry enterprises were quiet, but the recovery has occurred quarter by quarter. At the end of the year, strong public investment and disbursement will be the factor promoting the recovery of the construction materials industry in general and the steel industry in particular.
In the first quarter, production and consumption grew compared to the same period last year
In the economic context of the first 9 months of the year, there were some bright spots recorded in a number of policies to remove difficulties and promote economic growth issued by the Government and State agencies, including increased disbursement of public investment capital in the field of transport infrastructure. However, in general, market demand for domestic steel products is still weak and has not improved much.
According to data from the Vietnam Steel Association (VSA), the production and sales of steel products in the third quarter both increased by 5-6% compared to previous quarters, so overall in the first 9 months of 2023, the results of factories may be better than the first half of 2023.
The third quarter is also the time recorded as the first quarter of production and consumption growth compared to the same period last year.
Profits gradually improved
The third quarter of last year can be said to be a crisis quarter for steel businesses when demand weakened both domestically and internationally, raw material prices, especially coal prices, were three times higher than normal. In addition, tight credit and sharp increases in exchange rates and interest rates have eroded business profits. Hoa Phat, Hoa Sen and smaller units all lost money.
In the third quarter of this year, Hoa Phat and Hoa Sen continued to recover. Of which, Hoa Phat's net profit was more than 2,000 billion, and a loss of 1,786 billion in the same period. This profit figure is still low compared to Hoa Phat's previous period but has improved significantly since the third quarter of 2022. Hoa Phat's profit recovery was driven by improved sales volume, reduced input raw material costs and better inventory management.
Inventory increased slightly, HSV has a large profit at the end of 2023
On the business side, after reducing inventory to the lowest level in 2 years, steel units have tended to increase storage again. According to statistics, the total inventory of steel enterprises on the stock exchange at the end of the third quarter had an estimated value of about 65,200 billion VND, a slight increase of 2,700 billion compared to the end of the previous second quarter.
Especially with accurate calculations for the year-end inventory step, HSV Vietnam Group Joint Stock Company has an inventory of 5,000 tons. With the increasing trend of iron and steel prices at the end of the year, specifically, scrap iron and steel prices at the beginning of the month increased by about 500 VND/kg compared to the beginning of the fourth quarter and still show signs of continuing to increase in December. HSV Vietnam Group Joint Stock Company can take an estimated profit of 2.5 billion - 3.5 billion VND right in December (this profit is equal to the 2022 profit of 3.5 billion VND).
Diem Ha HSV