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HSG [BUY +25.0%] - Hoa Sen Ca Na steel complex is icing on the cake - Initiation

We initiate our coverage on HSG with a BUY rating and +25.0% Total Return. We expect 21.2% FY17 sales growth on 19.8% volume growth from continuing domestic demand. The new up-to-38% anti-dumping tariff creates temporary shelter for prices. FY17 NPAT growth of 14.9% as GPM will normalize to 20.6% vs 23.4% in FY16 as low-cost HRC inventory depletes while contribution from high-profit products will support margins.