HSG reported weak Q2 FY2022 (January 1 to March 31, 2022) results with revenue of VND12.7tn (USD550.5mn; +17% YoY and -25% QoQ) and NPAT-MI of VND234bn (USD10.2mn; -79% YoY and -63% QoQ). We attribute the decline in Q2 FY2022 earnings to a lower spread between input hot rolled coil (HRC) prices and finished galvanized steel selling prices in Q2 FY2022 compared to FY2021. This situation resulted in HSG’s gross margin shrinking to 11.3% in Q2 FY2022 vs 18.0% in Q2 FY2021 and 12.5% in Q1 FY2022.