Hoa Sen Group (HSG) Charter Capital Exceeds VND 8,000B After Stock Dividend; Q2 Profit Plunges 42%

Overview

Hoa Sen Group (HSG) has raised its charter capital to over VND 8,072.7 billion after completing a 30% stock dividend issuance. However, the company’s Q2 net profit fell 42% year-on-year to just VND 119 billion, missing market expectations as financial costs surged and foreign exchange gains disappeared.

Key Facts

• HSG completed distribution of nearly 186.3 million shares as stock dividend for fiscal year 2024-2025, with 14,297 fractional shares canceled.
• The stock dividend ratio was 100:30, meaning shareholders received 30 new shares for every 100 shares held.
• Charter capital increased from VND 6,209.8 billion to VND 8,072.7 billion.
• Q2 net revenue rose 6% YoY to VND 8,967 billion, but gross profit fell 2.2% to VND 1,052 billion due to higher cost of goods sold.
• Q2 net profit dropped 42% YoY to VND 119 billion.
• Financial costs surged 139% to VND 108 billion, while financial income plunged 78% to VND 26 billion due to the absence of forex gains.
• In the first six months of fiscal 2025-2026, HSG achieved nearly VND 17,400 billion in revenue (50% of target) and VND 181 billion in net profit (36% of full-year plan).

What Happened

Hoa Sen Group announced the completion of a stock dividend issuance, raising its charter capital from VND 6,209.8 billion to over VND 8,072.7 billion. The company distributed nearly 186.3 million shares to 68,162 shareholders at a ratio of 100:30, using retained earnings as of September 30, 2025. The remaining 14,297 fractional shares were canceled.

Separately, HSG reported Q2 results for the period January 1 to March 31, 2026. While revenue grew 6% to VND 8,967 billion, net profit plunged 42% to VND 119 billion. The sharp decline was driven by a 139% increase in financial costs to VND 108 billion and a 78% drop in financial income to VND 26 billion, as the company no longer recorded significant foreign exchange gains. Cost of goods sold rose faster than revenue, compressing gross profit.

Market Context

HSG shares closed at VND 15,000 on April 10, 2026, down 0.97% on volume of 2.28 million shares. The stock has been under pressure amid weak steel demand and rising input costs. The Q2 profit miss adds to concerns about the company’s near-term earnings trajectory, especially as the steel sector faces headwinds from global oversupply and volatile raw material prices. HSG is listed on HOSE and is one of Vietnam’s largest steel producers.

Strategic Significance

The capital increase via stock dividend strengthens HSG’s equity base but does not provide fresh cash for operations or investment. The sharp decline in Q2 profit highlights the company’s vulnerability to financial costs and forex volatility, which are likely to persist given the current interest rate environment and dong depreciation pressures. The weak first-half performance (36% of full-year net profit target) suggests that achieving the annual plan will require a significant improvement in the second half, which may be challenging if steel margins remain compressed.

What to Watch

• Q3 earnings release (July 2026) for signs of margin recovery or further deterioration.
• Steel price trends in Vietnam and globally, particularly hot-rolled coil and galvanized steel.
• Interest rate movements and HSG’s debt levels; financial costs may continue to rise.
• Foreign exchange rate developments, as HSG’s forex gains have been a volatile income component.
• Any updates on capacity expansion or export orders that could support revenue growth.