MAIN CONTENT

According to the latest update, Blast Furnace No. 2 of the Dung Quat 2 Project produced its first batch of hot metal on September 4, marking an important milestone for the Group’s entire project. Once fully operational, Dung Quat 2 is expected to add 5.6 million tons of HRC to HPG’s capacity. Specifically, Blast Furnace No. 1 of the project has been in commercial operation since the end of March 2025, raising HPG’s cumulative output in the first six months to 5.1 million tons. Blast Furnace No. 1 of DQ2 is expected to operate at 50% capacity in 2025 and increase to 70%–80% capacity in 2026. Meanwhile, Blast Furnace No. 2 of DQ2 is scheduled to commence commercial operation by late 2025 to early 2026.

With this update, HPG’s total crude steel output is expected to reach about 10.4 million tons in 2025, up 20% YoY.

On July 29, HPG received approval for the revised investment plan of the Dung Quat 2 project. Under the latest adjustment, Dung Quat 2 will raise its annual capacity to 6.1 million tons of products, including 5.6 million tons of hot-rolled coil (HRC) steel (unchanged, with two blast furnaces expected to be operational in 2026) and 500,000 tons of high-quality wire rod (scheduled to commence operation in 2028).

On August 1, Blast Furnace No. 1 of DQ1 resumed operation after more than a month of scheduled maintenance, helping ensure HPG’s smooth production activities.

VALUATION AND RECOMMENDATION

HPG is receiving positive momentum from: (i) growth drivers from the Dung Quat 2 project, with production output expected to grow by 20% per year; (ii) steel prices expected to bottom out amid China’s supply cuts (government regulation) and strong domestic steel demand supported by the public investment disbursement cycle.