Valuation report · Steel & Industrial Materials
Hoa Phat Group
HPG valuation deliberately separates intrinsic steel-cycle risk from public-market normalized earnings.
Fact file
- Price used
- VND 23.6k
- Price date
- 11 Jun 2026
- Model date
- 11 Jun 2026
- Methods
- DCF · Comparable Analysis
- Files
- 2 workbooks
Dated figures This model was last updated on 11 Jun 2026, 121 days before this page was built. Prices, estimates and peer multiples have not been refreshed since, so the implied moves below compare against the 11 Jun 2026 price, not today's.
The question
Is the market pricing HPG as a normalized steel-cycle recovery story, or should cash-flow risk keep the valuation discounted?
Valuation range
DCF
22.3k
−5.7%
DCF: 18.4k to 26.5k, base case 22.3k; −5.7% versus 23.6kComparable
25.5k–25.9k
+8.9%
Comparable: 25.5k to 25.9k; +8.9% versus 23.6kBars are ranges; a heavy tick is a point estimate; a gap inside a bar marks the base case. Percentages compare each method's base case or midpoint with the 23.6k price the model used on 11 Jun 2026.
| Method | Value | vs price |
|---|---|---|
| DCF Base case; bar spans WACC 9.5–11.5% and exit EV/EBITDA 8.0–10.0x | 22.3k | −5.7% |
| Comparable Selected peer P/E medians on LTM, 2026E and 2027E earnings | 25.5k–25.9k | +8.9% |
- DCF output · VND 22.3k/share
- The intrinsic case is below spot because even a normalized recovery still carries steel-cycle risk, capex drag, and terminal multiple uncertainty.
- Comparable output · VND 25.5k-25.9k/share
- Selected peer P/E medians imply upside versus the DCF because public investors are more willing to look through the cycle.
- Valuation spread · Approx. 15%-16%
- The gap between DCF and comparable value is the core read: HPG needs better cash-flow evidence for the intrinsic case to catch up with the public-market multiple case.
Executive view
HPG is a cyclical industrial issuer, so a single valuation method can overstate confidence. The report uses a FCFF DCF to capture operating cash generation and a comparable-company analysis to cross-check the market multiple investors currently assign to steel and materials peers.
The DCF is intentionally lower than the comparable output. That is the correct story for a steel company: intrinsic value should reflect spread volatility, working-capital swings, leverage, and capex timing, while comparable analysis reflects the multiple investors are willing to pay for normalized earnings today.
The operating case is not a distressed case. It assumes recovery in revenue, gross margin, and capex intensity. The discount comes from requiring cash-flow conversion to prove itself rather than immediately capitalizing the full peer re-rating.
The comparable model is the market check. It asks what HPG would be worth if investors applied selected steel/materials peer P/E medians to HPG earnings. Because public markets can look through the cycle faster than a DCF, this value is higher.
Key assumptions
- Revenue growth path
- 14.0% to 4.0%
- Growth steps down through the forecast period instead of assuming a full-cycle boom case.
- COGS/sales normalization
- 80.0%
- Margin recovery is included, but the model does not assume peak steel-cycle profitability.
- Capex/sales
- Falls to 4.0%
- Capital intensity moderates as the operating case normalizes.
- WACC
- 10.5%
- Used to discount unlevered free cash flow to firm.
- Exit EV/EBITDA
- 9.0x
- Terminal value uses an exit multiple rather than a perpetual-growth terminal value.
- Peer P/E medians
- 14.0x LTM; 11.4x 2026E; 10.5x 2027E
- Selected medians are used after trimming outlier peer multiples.
DCF sensitivity
How the DCF value moves with the discount rate and the exit multiple
| WACC ↓ · Exit EV/EBITDA → | 8.0x | 8.5x | 9.0x | 9.5x | 10.0x |
|---|---|---|---|---|---|
| 9.5% | 20.7 | 22.2 | 23.6 | 25.0 | 26.5 |
| 10.0% | 20.1 | 21.5 | 22.9 | 24.3 | 25.7 |
| 10.5% | 19.5 | 20.9 | 22.3 | 23.6 | 25.0 |
| 11.0% | 18.9 | 20.3 | 21.6 | 23.0 | 24.3 |
| 11.5% | 18.4 | 19.7 | 21.0 | 22.3 | 23.6 |
Outlined cell: model base case. Green cells sit above, red cells below, the 23.6k price used on 11 Jun 2026 (unshaded within ±2%; darker beyond ±10%).
Recomputed from the DCF workbook: the same unlevered free cash flows, mid-year discounting, net debt and share count, with only WACC and the exit multiple flexed. The centre cell is the model output.
Conclusion
HPG should be read as a valuation range, not a single target price. DCF is the conservative intrinsic anchor; comparable analysis is the market-implied normalized earnings case.
HPG should not be presented as a single precise target price. The better read is a range bounded by DCF discipline on the low end and public peer multiples on the high end.
If the investor believes spreads, utilization, and working capital will normalize quickly, the comparable range deserves more weight.
If the investor wants cash-flow proof before paying for normalized earnings, the DCF value is the more conservative anchor.
The report therefore says HPG is not obviously mispriced; it is a cyclicality debate. The market price sits between intrinsic caution and peer-based optimism.
Risks and checks
- 1 Steel spread compression or slower utilization would pressure the DCF fastest.
- 2 Lower capex or stronger working-capital release would lift free cash flow and narrow the gap between DCF and comparable value.
- 3 Comparable value can move quickly if the peer multiple set derates with China steel demand or Vietnam property sentiment.
- 4 A higher terminal multiple would lift DCF value disproportionately because terminal value is a large share of enterprise value.
- 5 A prolonged property or construction slowdown would make the comparable case less defensible even if peer multiples remain elevated.
Model files
-
One-page tear sheet
PDF · 211 KB · A4
Outputs against the price used, key assumptions, conclusion and risks on one page. Printable web version.
-
FCFF DCF
XLSX · 393 KB · 11 Jun 2026
Workbook with the HPG FCFF DCF, operating assumptions, working capital schedule, WACC inputs, and terminal value framework.
-
Comparable Company Analysis
XLSX · 1.5 MB · 11 Jun 2026
Peer valuation workbook using selected steel/materials P/E medians to cross-check the DCF output.
Method pages
Next model upgrades
- Full 3-statement integration
- Working capital schedule
- WACC bridge
- Revenue growth × EBITDA margin sensitivity
- EV/EBITDA peer cross-check