At its peak, Hoa Phat Group (HoSE: HPG) was the country’s fourth-largest company by market capitalisation on the stock market. However, after losing nearly VND128 trillion (US$5.48 billion) in the last nine months, the steel maker lagged behind.

The company’s shares dropped below VND22,000 on Monday, equivalent to a market value of more than VND127.3 trillion. This cost Hoa Phat its position in the top 10 companies by market capitalisation on the stock market.

HPG shares halted their bearish trend on Wednesday and rebounded in the last two sessions of the week, but still hovered at a one-year low of around VND21,500 per share.

Accordingly, it ended the week at VND21,500, equivalent to the market value of VND143.7 trillion.

Just nine months ago, Hoa Phat was still at its peak and was among the top 5 biggest companies on the market after Vietcombank (VCB), Vingroup (VIC) and Vinhomes (VHM).

Previously, the unprecedented bottom-fishing demand that started at the end of March and lasted until the end of last year’s third quarter helped the steel producer make a breakthrough in the market capitalisation race.

The leading steel company quickly surpassed a number of well-known banks before quickly retreating from the peak. The tumble was much greater than the general market, causing Hoa Phat to lose its position despite the fact that most blue-chip stocks could not maintain their performance.

With the downgrade of Hoa Phat, the top 10 biggest companies on the Ho Chi Minh Stock Exchange (HoSE) no longer have a representative of heavy industry.

The group currently has banks and real estate stocks, with a few leading enterprises in retailing consumer goods, food and beverage, and oil and gas sectors, such as Vinamilk (VNM), Masan Group (MSN) and PV Gas (GAS).

Despite that, Hoa Phat is still the listed enterprise with the largest charter capital on three stock exchanges at VND58 trillion, surpassing the biggest banks on the market.

Hoa Phat also records the biggest number of free-floating stocks on exchanges, with nearly 3.2 billion units.

Therefore, HPG shares are one of the most active ticker symbols on the market. At its peak, its trading value even reached a trillion dong in some sessions.

The shares’ downtrend was due to many unfavourable conditions affecting business results, especially steel prices. In the last ten weeks, domestic steel prices have declined ten times with a total loss of over VND3.6 million a tonne, depending on brands, types of steel, and regions.

In the international market, the price of hot rolled coil (HRC) has also decreased by nearly 40 per cent in the past four months due to fewer construction and manufacturing activities.

In China, the price of rebar futures is currently hovering around 3,800 yuan a tonne, down 35 per cent from the peak and losing all the momentum of the previous year.

Hoa Phat exported 4.3 million tonnes of crude steel in the first half of the year, an increase of 8 per cent year on year. Construction steel, billet, and HRC consumption reached nearly 4 million tonnes, an increase of 6 per cent.

Of which, construction steel consumption rose 29 per cent on-year to 2.38 million tonnes, representing 36 per cent of the total market.

The company’s revenues and profits were hit despite higher consumption volume as steel prices were in the bear market.

At the Hoa Phat’s 2022 General Meeting of Shareholders, President Tran Dinh Long warned that the steel industry would suffer negative business results in the next few months.

In fact, the financial reporting season has just begun, but some steel producers, including Hoa Phat, reported steep falls in profits.

Accordingly, in the second quarter of 2022, Hoa Phat’s profit after tax plunged 58 per cent to VND4.02 trillion, while profits of Tisco (TIS), SMC Trading Investment JSC (SMC), Cisco (CBI), and Me Linh Steel JSC (MEL) were down up to 75-90 per cent on-year.

Thu Duc Steel even reported a loss. VNS