Hoa Phat (HPG) Debt Tops VND 100 Trillion as Q3 Profit Doubles

Overview

Hòa Phát (HPG), Vietnam’s largest steelmaker, reported total financial debt of VND 105,736B at the end of Q3, the first time the figure has exceeded VND 100 trillion and an increase of more than VND 13,000B since the start of the year. The leverage came alongside quarterly interest expense of VND 1,774B, more than double the prior-year period, but revenue of VND 62,669B and after-tax profit of VND 8,265B still grew sharply. The results matter for HPG shareholders because they test whether the group’s volume-led steel recovery can outrun a higher cost of capital.

Key Facts

• Total financial debt reached VND 105,736B, up more than VND 13,000B from end-2025 and the highest on record for the group.
• Q3 interest expense was VND 1,774B, more than twice the same period last year, which management attributed to elevated lending rates.
• Q3 revenue came in at VND 62,669B, 2.3 times the year-earlier figure.
• After-tax profit reached VND 8,265B, up 106% year on year, with pre-tax profit above VND 9,100B.
• Steel sales volume rose 54% year on year to 3.7 million tonnes, with steel sales contributing roughly 96% of revenue.
• Equity stood at more than VND 149,568B, up 14% since the start of the year, alongside VND 46,273B in cash and deposits.
• The rail steel plant is about 80% complete as of the end of Q3, with first output expected in Q1 next year.

What Happened

According to the company’s Q3 results, Hòa Phát increased borrowings mainly through short-term debt to fund working capital, a point explained by group leadership. The average lending rate across the banking system was 10.7% in August, roughly 3 percentage points higher than on loans disbursed a year earlier, which the company cited as the driver of its higher interest bill. Despite the added leverage, the balance sheet remains substantial: total capital reached VND 283,449B, with fixed assets accounting for nearly half, and cash and deposits of VND 46,273B generated more than VND 700B of interest income in the quarter, partly offsetting borrowing costs.

The profit engine was volume rather than margin. Sales of 3.7 million tonnes represented 54% year-on-year growth, and steel remained the dominant revenue line at about 96% of the total. Chairman Trần Đình Long’s group also flagged progress on its rail steel project, which is around 80% complete and could produce its first output in Q1 next year. The filing does not disclose a breakdown of short-term versus long-term debt or the precise average cost of HPG’s own borrowings.

Market Context

HPG trades on HOSE and closed at VND 21,200 on 29 October 2026. The stock sits in the Basic Resources sector, where earnings are highly sensitive to construction steel demand, Chinese export pricing and input costs for iron ore and coking coal. The Q3 print confirms a volume-led recovery in Vietnamese steel consumption, but the doubling of interest expense shows the sector is now operating with a materially higher funding cost than during the 2024-2025 easing cycle. HPG remains one of the most heavily indebted listed companies on the exchange, which makes it a bellwether for how Vietnamese corporates are absorbing the higher rate environment.

Strategic Significance

The investment case hinges on operating leverage: HPG is adding debt to fund working capital and capacity while steel volumes recover, so profit growth depends on the spread between steel realisations and financing costs. With equity up 14% and a cash pile above VND 46,000B, the leverage is not a solvency concern, but it does compress the buffer if steel prices soften. The rail steel project, due to produce first output in Q1 next year, is the clearest structural differentiator, moving HPG into a higher-value product segment tied to national railway investment rather than commodity construction steel alone.

What to Watch

• Q4 results and whether interest expense keeps climbing as short-term debt rolls over at higher rates.
• Monthly steel sales volume and construction steel price trends in Vietnam.
• First output from the rail steel plant, guided for Q1 next year, and any offtake agreements.
• Any refinancing or bond issuance that shifts the short-term debt mix into longer tenors.
• Foreign-ownership and block-trade filings on HOSE for signs of institutional repositioning.