Looking at the numbers, Hoa Phat (HPG) is rewriting its growth story. While many Vietnamese steel companies are still competing fiercely in the low-margin construction steel segment, the group has chosen to invest over VND 10 trillion in a high-speed railway rail manufacturing plant in Dung Quat, Quang Ngai. This leap makes Hoa Phat the first and only company in Southeast Asia capable of producing high-speed railway rails.Nguoi Quan Sat
What makes this particularly notable is the timing: Hoa Phat launched the project just as Vietnam’s $67 billion North-South high-speed rail mega-project is entering its pre-construction phase. This article breaks down the numbers from factory progress and business plans to HPG stock price movements.
Dung Quat Rail Factory: 35% Progress in 3 Months
The Hoa Phat Dung Quat Rail and Special Steel factory broke ground on December 19, 2025, with a designed capacity of 700,000 tons per year across nearly 15 hectares.Tap chi Cong Thuong The production line uses four-stand flexible rolling technology from SMS Group (Germany), combined with high-quality casting-rolling systems from Primetals Technologies (UK).
After just over 3 months, construction progress has reached 35%.Bao Xay dung Equipment installation is scheduled to begin in June 2026, SMS Group experts will arrive in Vietnam in Q3/2026 for supervision and commissioning, and the target is to produce the first railway rails by Q1/2027, one year ahead of the original schedule.CafeF
In parallel with construction, Hoa Phat is collaborating with SMS Group and the School of Materials at Hanoi University of Science and Technology to train engineers for technology transfer.Hoa Phat Internal The group also plans to recruit 2,000 additional personnel for this technological milestone.CafeF
TÜV SÜD Certification: A Passport to International Markets
A key milestone occurred on April 2, 2026: Hoa Phat signed a contract with TÜV SÜD Rail GmbH (Germany), one of the world’s leading railway rail certification organizations.VnEconomy The certified steel grades range from R260 for standard applications to R350HT and R400HT for heavy-load and high-speed rail, meeting European (EN), Chinese (GB/TB), and Japanese (JIS) standards.
This is not just about domestic quality assurance. With multi-standard certification, Hoa Phat’s rails can be exported to demanding markets across Asia and Europe. Southeast Asia and South Asia are in a strong railway infrastructure investment cycle, particularly India, Indonesia, Thailand, and the Philippines.
North-South High-Speed Rail: A $67 Billion Customer
The big picture behind this investment is Vietnam’s North-South high-speed rail mega-project. The National Assembly approved the project under Resolution 172/2024 with a total estimated investment of approximately VND 1.71 quadrillion (equivalent to $67 billion).Government Newspaper The 1,541 km route passes through 20 provinces and cities, designed for speeds of 350 km/h with 23 passenger stations and 5 freight stations.
The project is divided into 17 independent sub-projects, targeting groundbreaking before December 31, 2026.Bao Xay dung With 1,541 km of double-track railway, the demand for high-quality rail steel runs into millions of tons. If Hoa Phat can localize production, this will provide stable demand for decades, not only from the North-South line but also from urban metro projects in Hanoi and Ho Chi Minh City.
CEO Nguyen Viet Thang once stated: “If we don’t produce railway rails today, Vietnamese enterprises will lose the opportunity, and the nation will lose its manufacturing capability.”Dan Viet
2026 Business Plan: VND 210 Trillion Revenue, 42% Profit Growth
Looking at the plan, Hoa Phat has set ambitious 2026 targets: revenue of VND 210 trillion and net profit of VND 22 trillion, representing increases of 35% and 42% respectively over 2025.Vietstock The dividend policy targets 15%, comprising 10% in stock and 5% in cash.Tin nhanh Chung khoan The annual general meeting is scheduled for April 21, 2026.
Growth drivers come from multiple sources. The Dung Quat 2 complex, with total investment of approximately VND 85 trillion, has been fully operational for the year, with Blast Furnace No. 2 running since September 2025, significantly boosting HRC (hot-rolled coil) output.Financial Times Vietnam Anti-dumping duties on imported HRC also provide a competitive advantage for Hoa Phat steel in the domestic market.
For Q1/2026, net profit is estimated at approximately VND 5.1 trillion, up 52% year-over-year, with the actual figure potentially higher due to proceeds from the transfer of the Pho Noi Urban Area project in Hung Yen province.Elibook
HPG Stock: Up 38% in 12 Months
On the stock market, HPG closed at VND 28,000 per share on April 11, 2026, with a market capitalization of approximately VND 215 trillion. Compared to the same period last year (VND 20,250 on April 11, 2025), the stock has gained approximately 38%. From the beginning of 2026 (VND 26,400 on December 31, 2025), HPG is up about 6%.
Over the last 30 sessions, HPG has traded in a range of VND 25,350 – 28,250. The April 8, 2026 session was notable as HPG surged 4.48% (from VND 26,800 to 28,000) with trading volume near 88 million shares, indicating significant capital flows returning to the stock. The 20, 50, 100, and 200-day moving averages are converging around the VND 26,800 – 27,000 zone, forming solid support. Key resistance levels are at VND 28,600 and 30,350.
Risks to Monitor
Chairman Tran Dinh Long has emphasized that producing railway rails is to “demonstrate the strength and power of Hoa Phat” and the group will “participate in every key railway project.”VnExpress However, investors need to remain clear-eyed about the risks:
Factory timeline: While progress is ahead of schedule, delays in equipment installation or commissioning remain possible, especially with technology entirely new to Vietnam.
High-speed rail timeline: The national project could be delayed beyond the late 2026 groundbreaking target. If delayed, short-term rail demand would be affected, forcing Hoa Phat to find export outlets or pivot to urban metro projects.
Steel cycle: Global steel prices and raw material costs (iron ore, coking coal) remain major variables affecting Hoa Phat’s overall profit margins, regardless of whether the rail segment succeeds.
International competition: Established rail manufacturers from China, Japan, and Germany have advantages in experience and reputation. Hoa Phat needs time to prove quality through actual operations.
Conclusion: A Calculated Bet
The 700,000-ton annual rail capacity represents approximately 14% of Hoa Phat’s current long steel segment and over 8% of total crude steel capacity of 8.5 million tons per year. More importantly, railway rails are a product with significantly higher margins than standard construction steel, thanks to stringent technical standards and specialization.
With rapid construction progress, world-class technology partners, international certification from TÜV SÜD, and a potential customer in the form of a $67 billion mega-project, Hoa Phat is making a large but well-founded bet. The 38% stock price increase over the past 12 months partly reflects market expectations. However, the gap from expectations to revenue realization is at least 12-18 months. For investors, HPG is gradually transforming from a “steel stock” into a national strategic infrastructure stock.
