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HPG [BUY +28.6%] - “King of Steel” deserves re-rating - Update

We reiterate a BUY rating for HPG with our target price raised by 17% to VND38,200 (prices are adjusted for the upcoming 5:1 rights issue assumed at VND20,000 per share). HPG’s top position in construction steel continues to bolster 22% FY17 top-line growth. Margins compress as input costs rising above FY16 low-base guides for 10% FY17 NPAT growth. Operation of Dung Quat Steel Complex in 2019 will elevate HPG’s long-term outlook. EPS growth in FY17 and FY18 will be distorted