Hanoi Iron and Steel (HSV): Profit in the first 6 months of the year exceeded 21.7% of the 2021 plan
HSV had a significant growth in gross profit margin reaching 5.8%, an increase of more than 1.6 times compared to the gross profit margin of 2020, and is the highest margin since 2017 until now.
Hanoi Iron and Steel Joint Stock Company (Stock code: HSV) recorded semi-annual business results in 2021 with impressive revenue results. Specifically, after the first 6 months of the year, HSV's net revenue reached more than 172 billion VND and profit after tax reached more than 4.2 billion VND, completing 121.7% of the 2021 plan, 71% higher than the profit achieved for the whole year 2020.
In the first 6 months of the year, HSV's scrap and billet business recorded more than 172 billion VND in revenue due to the price adjustment of steel scrap and billet and steel consumption demand continued to increase in recent times. Thus, after the first 6 months of 2021, HSV has completed 52% of the revenue plan set for 2021, completing 121.7% of the 2021 profit after tax plan.
Notably with business performance results in the first 6 months of 2021, HSV had a significant growth in gross profit margin, reaching 5.8%, an increase of more than 1.6 times compared to the gross profit margin of 2020, and is the highest margin since 2017.
In particular, the company's new steel billet processing and production activities will start from May 2021. In May and June 2021 alone, HSV distributed nearly 4,000 tons of embryos to Japanese partners. With an output of 40,000 tons/year, the steel billet production segment promises to bring a lot of sudden revenue value to HSV in 2021.
To serve the purpose of business expansion, at the end of the second quarter of 2021, Hanoi Iron and Steel submitted documents to the State Securities Commission for the expected issuance of 5 million shares, each share with a par value of 10,000 VND, equivalent to a total mobilized value of 50 billion. Accordingly, in the third quarter of 2021, HSV will be granted a certificate of registration for public securities offering. A representative of Hanoi Iron and Steel said that the amount of 50 billion VND from this capital mobilization will be used to buy land to expand warehouses (10 billion VND) and purchase goods, increase business scale to expand market share, and supplement working capital (40 billion VND).
According to economic experts, in 2021 the steel industry is experiencing outstanding growth. Thus, the business activities of the steel industry in general and HSV in particular will continue to remain positive when (i) Steel consumption demand will continue to increase as production activities recover after the Covid-19 epidemic; (ii) Steel selling prices are likely to continue to increase faster than steel ore costs, (iii) Steel supply is scarce as China restricts steel exports.
HSV shares are currently trading stably around 17,000 VND/share. The closing price on August 2 reached 17,300 VND/share, an increase of more than 17% compared to the end of April 2021.