NKG announced its Q2 2026 results as follows:
Q2 2026:
- Sales volume: ~203,000 tonnes (+54% QoQ, +1% YoY).
- Net revenue: VND4,150bn (USD156.6mn; +27% QoQ, +9% YoY).
- NPAT-MI and core NPAT-MI: VND104bn (USD3.9mn; +366% QoQ; vs a restated VND2.7bn (USD102k) net loss in Q2 2025 – see the note on restated Q2 2025 results below). Core earnings exclude all one-off inventory provision bookings/reversals.
H1 2026:
- Sales volume: ~335,000 tonnes (-18% YoY; 27% of our 2026F forecast).
- Net revenue: VND7,412bn (USD279.7mn; -6% YoY; 27% of our 2026F forecast).
- NPAT-MI: VND126bn (USD4.8mn; +102% YoY; 21% of our 2026F forecast).
- Core NPAT-MI: VND126bn (USD4.8mn; +264% YoY; 21% of our 2026F forecast).
Note on restated Q2 2025 results: NKG's Q2 2026 financial statements disclose a restated Q2 2025, with NPAT restated to a loss of VND2.7bn (USD102k) vs VND92bn (USD3.5mn) following SSC’s 2026 audit-quality inspection. The lower earnings restatement is due to the removal of the VND94bn (USD3.5mn) “other gain” – this only affects PBT and items below it, not the operating lines above (within the PnL).
Nature of the restatement: Per Official Letter No. 5384/UBCK-GSDC, the SSC's 2026 audit-quality inspection found that NKG's audited 2025 consolidated FS contained a material misstatement: a VND94bn (USD3.5mn) gain from transferring land-use rights at My Xuan B1 – Dai Duong Industrial Park (VND366bn/USD13.8mn transfer price vs VND272bn/USD10.3mn historical cost) was not eliminated on the consolidation of NKG and its subsidiary Ton Nam Kim Phu My. Transaction mechanics (per NKG's 2025 audited FS disclosure): NKG’s parent leased the IP land from Dai Duong at VND272bn (USD10.3mn), then transferred it back to Dai Duong at VND366bn (booking a VND94bn gain), after which Dai Duong leased the same land to NKG's subsidiary Ton Nam Kim Phu My at VND366bn — effectively an internal transfer from parent to subsidiary via an intermediary, so the gain should have been eliminated on consolidation.
Revenue rebounded sharply mainly on volume rebound:
Q2 2026 net revenue rose 27% QoQ and 9% YoY. The rebound was driven primarily by a 54% QoQ surge in total sales volume, with export volume +225% QoQ from a low base and domestic volume also recovering (+7% QoQ). YoY-wise, volume broadly remained flat, with weaker domestic sales offset by stronger exports performance from a low base. Implied ASP fell an estimated 17% QoQ, which we think could be attributed to easing Middle East tension in the quarter which caused steel prices to gradually reduce from April through June. On a YoY basis, implied ASP rose by an estimated 8%, attributed to the Middle East conflict-driven price rally – which did not exist last year.
For H1 2026, net revenue declined 6% YoY as an 18% YoY drop in total volume, driven by a 33% YoY plunge in export volume amid continued protectionism and Chinese competition, was partly offset by YoY higher ASPs.
Margins rebounded strongly, in line with the sector-wide inventory-timing benefit:
Q2 2026 reported GPM expanded sharply to 10.5% from 2.6% in Q1 2026 and a restated 7.1% in Q2 2025. We attribute this to the same price-cost timing dynamic flagged in our latest Earnings Flashes for HSG and HPG: Because NKG was able to sell its products at a higher prices vs the input inventory procured before commodity prices rose (as a result of the Middle East conflict), margins expanded. H1 2026 reported GPM was 7.0%, slightly higher vs 6.8% last year, masking a weak Q1 and a strong Q2.
SG&A rose on higher selling expenses, likely due to the Middle East conflict, which drove up logistics costs:
Q2 2026 SG&A expenses rose 90% QoQ and 15% YoY. The SG&A/sales ratio rose to 4.7%, from 3.1% in Q1 2026 (a low base) and 4.4% in Q2 2025. The increase was driven by both higher selling expenses (+98% QoQ, +5% YoY) and higher G&A expenses (+71% QoQ, +55% YoY) – mainly selling expenses, which were more than 2.5x the size of G&A. The company does not break out these accounts for Q2, but we suspect the rise partly reflects higher logistics costs tied to the Middle East conflict, as logistics account for the bulk of selling expenses (~85% in both H1 2025 and 2026). Nevertheless, due to strong cost-saving efforts in Q1, H1 total SG&A declined 12% YoY.
Falling financial income and surging financial expenses weighed on the bottom line:
Q2 financial income dropped to a net loss of VND1bn (vs VND97bn/USD3.6mn in Q1 and VND60bn/USD2.3mn in Q2 2025). No further breakdown was disclosed for Q2 financial income, only for H1 results. For H1, financial income was VND96bn (USD3.6mn), mostly consisting of deposit/bond/loan interest income and realized FX gains.
Q2 financial expenses increased 46% QoQ but dropped 45% YoY. The QoQ increase was mainly driven by higher interest expenses, reflecting a higher average debt balance and interest rates this quarter, while the YoY decline was likely driven by lower FX losses (no breakdown for Q2; H1 2026 breakdown shows FX loss of VND19bn, down 76% YoY from VND81bn in H1 2025). Notably, average interest expenses fell YoY (3.5% vs 3.8% last year), despite a 23% higher average debt balance and the currently high rate environment, implying that part of the interest is being capitalized into the VND5.1tn (USD194.3mn) construction-in-progress (mainly linked to the Nam Kim Phu My plant expansion).
Conclusion:
Q2 2026 marks a sharp rebound for NKG, with revenue, gross margin, and operating profit all improving materially both QoQ and YoY, consistent with the industry-wide steel price tailwind from the Middle East conflict that also lifted HSG's and HPG’s margins and earnings this quarter. We view this benefit as temporary rather than structural: margin sustainability into Q3 will hinge on whether the conflict-related disruptions persist.
That said, H1 2026 results still trail our full-year forecast — NPAT-MI was just 21% of our 2026F projection, and H2 results are unlikely to be able to close that gap. We therefore see downside risk to our current NKG forecasts, pending a fuller review.
NKG’s Q2 & H1 2026 results
VND bn | Q2 | Q1 | Q2 | QoQ | YoY | H1 | H1 | YoY | 2026F | H1/ 2026F |
Sales volume (‘000 tonnes) | ||||||||||
Total | 202 | 132 | 203 | 54% | 1% | 407 | 335 | -18% | 1,250 | 27% |
Exports | 83 | 28 | 92 | 225% | 12% | 179 | 121 | -33% | 485 | 25% |
Domestic | 119 | 104 | 111 | 7% | -7% | 228 | 215 | -6% | 765 | 28% |
Net revenue | 3,808 | 3,261 | 4,150 | 27% | 9% | 7,899 | 7,412 | -6% | 26,966 | 27% |
Gross profit | 270 | 85 | 437 | 413% | 62% | 533 | 522 | -2% | 2,343 | 22% |
SG&A expenses | -169 | -102 | -194 | 90% | 15% | -337 | -297 | -12% | -1,290 | 23% |
Operating profit | 101 | -17 | 243 | N.M | 139% | 196 | 226 | 15% | 1,053 | 21% |
Financial income | 60 | 97 | -1 | N.M | N.M | 107 | 96 | -10% | 110 | 88% |
Financial expenses | -144 | -54 | -79 | 46% | -45% | -208 | -134 | -36% | -436 | 31% |
- Interest expenses | -60 | -47 | -67 | 42% | 12% | -116 | -114 | -2% | -355 | 32% |
Net other income/loss | 0 | 0 | 0 | -58% | N.M | 4 | 0 | -98% | 0 | N.M |
PBT | 18 | 25 | 163 | 547% | 807% | 99 | 188 | 90% | 727 | 26% |
NPAT | -3 | 21 | 103 | 378% | N.M | 63 | 124 | 98% | 596 | 21% |
NPAT-MI | -3 | 22 | 104 | 366% | N.M | 63 | 126 | 102% | 596 | 21% |
Core NPAT-MI* | -3 | 22 | 104 | 366% | N.M | 35 | 126 | 264% | 596 | 21% |
GPM | 7.1% | 2.6% | 10.5% |
|
| 6.8% | 7.0% |
| 8.7% |
|
Core GPM* | 7.1% | 2.6% | 10.5% |
|
| 6.2% | 7.0% |
| 8.7% |
|
SG&A/sales | 4.4% | 3.1% | 4.7% |
|
| 4.3% | 4.0% |
| 4.8% |
|
EBIT margin | 2.7% | -0.5% | 5.9% |
|
| 2.5% | 3.0% |
| 3.9% |
|
Effective tax rate | 115.2% | 14.8% | 37.0% |
|
| 36.7% | 34.0% |
| 18.0% |
|
NPAT margin | -0.1% | 0.7% | 2.5% |
|
| 0.8% | 1.7% |
| 2.2% |
|
Core NPAT margin* | -0.1% | 0.7% | 2.5% |
|
| 0.4% | 1.7% |
| 2.2% |
|
Source: NKG, Vietcap. *Core earnings measures exclude inventory provision / (reversal) and other one-offs, using the effective tax rate in the quarter.
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