HSG - Q3 FY2023 NPAT-MI declines QoQ; 9M FY2023 results trail our forecasts

- For Q3 FY2023, HSG’s revenue increased by 24% QoQ but declined by 29% YoY to VND8.6tn (USD366.3mn). Moreover, the company’s NPAT-MI declined by 94% QoQ and 95% YoY to VND14bn (USD0.6mn).

- Unlike the other two steelmakers under our coverage, HPG and NKG, which both reported QoQ improvements in gross margin in Q2 2023 (or Q3 FY2023 for HSG), HSG’s Q3 FY2023 gross margin compressed to 10.3% vs 13.4% in Q2 FY2023.

- Despite the QoQ improvement in revenue, HSG’s SG&A on sales inched up to 9.7% in Q3 FY2023 vs 9.2% in Q2 FY2023, further weighing on net profit.