- We cut our target price for HT1 by 4% to VND13,200/share and downgrade our rating to MARKET PERFORM from BUY as the company’s share price has rallied 66% since early November 2022.

- Our lower target price is mainly due cutting our aggregate 2023-2027F NPAT-MI forecast by 8% as a result of our lower gross margin forecast from a period of weaker demand and higher electricity costs. This is partially offset by rolling our target price horizon forward to mid-2023.

- HT1 reported weak 2022 NPAT-MI of VND258bn (USD10.9mn; -31% YoY) mainly due to 1) gross margin compression amid high input coal prices and 2) higher SG&A expenses as percentage of sales against a tough competitive landscape. Throughout 2022, Vietnam’s cement industry experienced a large decline in exports due to weaker demand from China, which led to fiercer competition in the domestic market.

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