HSG [MARKET PERFORM +8.4%] - Keeping an eye out for more than earnings in FY18 - Update

We reiterate our MARKET PERFORM rating for HSG while revising our target price down by 15% due to lower FY18 margin and stressed working capital forecast. Disappointing Q4 2017 earnings due to shrinking gross margin and a surge in interest expense caused the share price to plunge 15% since our last update in August. HSG finished FY17 with 46% revenue growth owning to robust sales volume for galvanized steel, but NPAT-MI dropped 12% as margins did not fully reflect favorable input prices a