Hoa Phat Group (HoSE: HPG), a leading steelmaker in Vietnam, is conducting an IPO for Hoa Phat Agriculture Development JSC (HPA), its second-largest revenue and profit contributor after steel.

HPA plans to offer 30 million shares, or 11.7% of its charter capital, at VND41,900 ($1.59) each to raise more than VND1.25 trillion ($47.39 million).

Proceeds will be used to restructure debt, strengthen its balance sheet, add working capital, and expand three hog farms along with a third feed mill in northern Vietnam.

Investors can subscribe from November 24 until 4 p.m. on December 15 through distributor Vietcap Securities. Allocation will take place on December 16-17, while payment is due before December 24.

HPA expects to announce results between December 25-30 and issue share ownership certificates in January 2026 before listing on the Ho Chi Minh City Stock Exchange (HoSE).

Hoa Phat Group CEO cum HPA chairman Nguyen Viet Thang speaks at a roadshow for HPA. Photo courtesy of the group.

At a roadshow, Hoa Phat Group CEO cum HPA chairman Nguyen Viet Thang said this is the group’s first time bringing a specialized business to the public market, calling the IPO and HoSE listing a strategic step to improve transparency, reputation and access to secondary capital.

HAP will have more investors and strategic shareholders, but Hoa Phat Group will retain control after the listing.

Profit surges as hog prices stay elevated

Founded in 2016, HPA operates seven hog-farming complexes on 387.9 hectares, three Australian cattle farms covering 625 hectares, two poultry farms on 50 hectares, and two feed mills with annual capacity of 600,000 tons. Annual output totals 750,000 market hogs, 150,000 cattle, and 336 million eggs.

After bottoming in 2022, HPA’s earnings rebounded strongly. In 2024, revenue rose 12% year-on-year to VND6.91 trillion ($262 million), while net profit attributable to the parent shareholder jumped 4.7 times to VND1.04 trillion ($39.43 million).

For the first nine months of 2025, revenue climbed 30% to VND6.26 trillion and net profit rose 86% to VND1.3 trillion ($49.1 million). HPA forecasts 2025 revenue of VND8 trillion and net profit of VND1.5 trillion ($56.87 million).

HPA has four main business segments including animal feed, hog farming, cattle farming, and poultry farming. Its hog business contributes roughly 40% of revenue and 60% of profit, followed by feed, cattle, and poultry.

Persistently high hog prices since early 2024 have boosted margins. CEO Pham Thi Hong Van said production costs average VND42,000 per kg while selling prices range from VND59,000 to VND61,000, giving the hog segment a margin above 30%.

For 2026, HPA assumes a conservative average hog price of VND60,000 per kg, implying profit of VND1.2-1.26 trillion ($47.77 million). Van said the outlook may be stronger due to a decline of nearly one million breeding sows after flooding and African swine fever outbreaks, raising supply-shortage risks.

By 2030, HPA targets feed capacity of 1 million tons a year, 900,000 market hogs, 73,000 cattle, and stable annual egg output of 336 million. It expects more than VND12 trillion ($454.98 million) in revenue, post-tax profit of about VND1.75 trillion ($66.35 million), and ROE above 25%.

Dividend policy to continue

Between 2023 and 2025, HPA raised cash dividends from 0.5% of par value to 37.2% and 53.6%. The company plans to pay about 38.5%, or VND3,850 per share, over the next 12 months.

Thang said HPA would continue to maintain the policy of paying annual cash dividends. He noted HPA's investment plan is about VND1,500 billion ($56.87 million) until 2030. The company has almost no medium-term debt, mainly using working capital to serve production and business activities.

Therefore, the capital from depreciation combined with the capital mobilized from the IPO is enough to meet the development needs, there is no plan to mobilize capital through issuing additional shares. Accordingly, the generated profits can be completely distributed as cash dividends, which is different from the parent group which has large investment needs.