Macroeconomic outlook in 2023

 GDP growth: While still positive, Vietnam's GDP growth in 2023 was estimated
to be around 5.05%, significantly lower compared to the initial projections of 6-
7% and the previous year's growth rate exceeding 6.5%. This represents a slight
slowdown compared to the impressive 8.0% growth recorded in 2022 but still
remains among the highest in the region.
 Many steel enterprises have difficulty raising capital: Some steel enterprises have
had to delay or cancel corporate bonds because they could not find investors.
GDP growth rate per years

- The State Bank of Vietnam (SBV) cut interest rates four times in March, May, and June,
leading to a corresponding decrease in deposit and loan rates offered by credit
institutions.
- Despite these measures, credit growth in Vietnam remained sluggish, reaching only
9.15% year-to-date as of November 2023, the lowest level in 13 years.

1
 - Shifting economic structure: The economy has successfully transitioned from an
agricultural base to a service-oriented one. In 2023, services contribute 51% to the
GDP, followed by manufacturing (17%) and agriculture (15%).
- Government initiatives: The government has taken steps to address economic
challenges and support future growth. Examples include easing regulatory burdens
for businesses, investing in infrastructure development, and promoting education
and skills development.
https://hanoitimes.vn/oecd-forecasts-vietnams-gdp-growth-at-65-in-2023-
323568.html
https://vietnamlawmagazine.vn/vietnamese-economy-expands-505-percent-in-2023-
gso-71037.html#:~:text=Vietnam's%20gross%20domestic%20product
%20(GDP,GSO)%20announced%20on%20December%2029.

MARKET OUTLOOK

2
 Vietnam's steel industry witnessed a mixed year in 2023,
- Price fluctuations: Steel prices, both globally and domestically, experienced
significant fluctuations throughout 2023 due to rising raw material costs (iron ore,
coking coal) and fluctuating global demand.
- Competition from cheap imports: Vietnamese steel producers faced increased
competition from cheaper imports, particularly from China, putting pressure on
profit margins.
- Rising interest rates: The increase in interest rates by the State Bank of Vietnam
(SBV) made it more expensive for businesses to borrow capital, impacting
investment and expansion plans.
Positive Developments about Production and Exports:
- Production: Overall steel production in 2023 reached around 19.5 million tons, a
slight increase compared to 2022.
- Exports: Steel exports saw positive growth, increasing by 12.2% compared to the
first half of 2022, reaching 7.1 million tons by June.
- Key Export Markets: Southeast Asia (36.38%), EU (24.15%), US (7.55%), India
(5.72%), and Turkey (3.21%).
Domestic Consumption:
- Domestic consumption: Domestic steel consumption remained sluggish
throughout 2023, decreasing by 24.6% compared to the first half of 2022. This
decline was attributed to a slowdown in the real estate sector, a major consumer of
steel.
- Positive signs towards the end of 2023: Domestic consumption showed some
positive signs in the last quarter of 2023 due to increased government
infrastructure investment and the restarting of some real estate projects.

3
 https://vietnamnews.vn/economy/1639204/domestic-steel-sector-sees-high-hope-
for-recovery-in-2024-experts.html#:~:text=VSA%20General%20Secretary
%20%C4%90inh%20Qu%E1%BB%91c,expected%20increase%20of
%20construction%20projects.
https://www.vietdata.vn/post/vietnam-steel-market-which-enterprise-holds-the-
largest-market-share

Hoa Phat is a construction steel and steel pipe manufacturer with the largest
market share in Vietnam.
Hoa Phat Group Overview and Analysis in 2023: A Data-Driven Look
Hoa Phat Group, a leading Vietnamese industrial conglomerate, navigated a
year of mixed fortunes in 2023. While the group achieved some positive results,
external factors presented significant challenges. Here's a comprehensive overview
and analysis based on available data:
Financial Performance:
 Revenue: Hoa Phat Group's revenue in 2023 reached VND 93.7 trillion
(approximately USD 4.1 billion), representing a 33% year-on-year
increase compared to 2022. (Source: Hoa Phat Group Investor Relations)

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  Profit: Despite exceeding the 2023 target, the group's after-tax profit
reached VND 6.8 trillion (approximately USD 300 million), 21.6%
lower compared to 2022's profit. This decline can be attributed to several factors,
including:
o Lower steel prices: Global steel price fluctuations throughout the year
impacted profitability.
o Increased input costs: Rising costs of raw materials like iron ore and
coking coal squeezed margins.
o Slowdown in the real estate sector: A key steel consumer, the real estate
sector's slowdown in 2023 dampened domestic steel demand.
Market Position:
 Steel: Hoa Phat remains the dominant player in the Vietnamese steel market,
holding a 25% share in the domestic construction steel segment.
 Other segments: The group maintains a strong presence in other sectors,
including:
o Steel pipes: 20% market share
o Galvanized steel sheets: 30% market share
o Refrigeration: Leading market player