Nonetheless, as the industry upcycle picks up and earnings improve, HG Metal has seen its share price gain 74.7% over the past year, closing at 62 cents on April 22. Back in 2020, during the industry downturn, HG Metal shares fell as low as 16 cents. “We think that the ongoing construction boom is a positive development not just for the steel industry, but also for the construction industry as a whole. We are hopeful that investor interest will extend to HG Metal as we engage the market,” says Ong Hwee Li, the company’s non-executive chairman, in an interview with The Edge Singapore.
Space for steel
HG Metal’s Jalan Buroh facility, which covers 20,000 sqm, provides ample space to stock and sell what customers need. It has an annual production capacity of 180,000 metric tonnes (MT) and supports value-added activities for its clients.
For companies like HG Metal that deal with commodities, the key to running the business is to be careful and diversified in its procurement. “Apart from that, we are also tightening our inventory management to optimise our cost and margin. On the other hand, we also work closely with our downstream customers by providing them with value-added services,” says executive director and CEO Xiao Xia at the same interview.
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At times, the company will consolidate its operations to improve efficiency and reduce operating costs. To this end, HG Metal has sold off the assets it deems non-core in Myanmar and Indonesia. Instead, the company is focusing solely on growing the business it can generate in its home market, Singapore. In addition to finding new customers, Xiao is deepening relationships with existing customers by offering long-term contracts ranging from one to five years. By doing so, all parties have greater certainty about their respective costs and are less exposed to changes in market prices.
As HG Metal’s results have shown, such moves have had a positive impact. For the financial period 2025 (FP2025) ended Sept 30, 2025, while revenue was down to $130.3 million, mainly due to shorter reporting period of nine months following the change of financial year from Dec 31, 2025 to Sept 30, 2025 and lower average selling price, gross profit margin improved slightly to 14.7% in FP2025 compared to 14% in FY2024, thanks to lower average cost of material costs during the financial period.
Key differentiation
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According to Ong, HG Metal differentiates itself from the competition through its extensive warehousing and processing facilities and by sourcing raw materials from multiple countries, where price differences may add up. “The procurement strategy is the key to ensuring that we maintain our gross profit margins because of the fluctuating steel prices,” says Ong. “Just-in-time delivery as a key differentiating factor as well,” he adds.
The steel industry may evoke images of 19th-century industrial activity, but, as far as HG Metal is concerned, it is keeping up with trends. Specifically, to better align with the global push for businesses to be more ESG-friendly, HG Metal has recently invested RM18 million ($5.68 million) in Malaysia-based Eden Flame, whose 500,000MT plant in Pasir Gudang will commence production of low-carbon steel to meet growing demand from sustainability-focused customers across Southeast Asia.
Meanwhile, within Singapore, there is already plenty of demand. HG Metal has secured contracts to supply steel for projects including the Cross Island Line, the North-South Corridor, and the Jurong Regional Line. In addition to land transport infrastructure, HG Metal is seeing steady demand from both public and private housing. Commercial developments include the Yokogawa Electric Singapore Facility, the Resorts World Sentosa–Waterfront Lifestyle Development and Rainforest Wild Asia.
Having said so, HG Metal is clearly keen for more. The company is gunning for contracts from Changi Airport Terminal 5, the redevelopment of Alexandra Hospital, the Defence Science and Technology Agency, various public housing developments, and also ancillary infrastructure works at Changi East.
However, unlike many of the listed construction companies, it makes regular order-book update announcements. BRC Asia, for example, has impressed investors with a growing order book of $2.2 billion as at end-2025. Citing competitive reasons, HG Metal will not do so for now; otherwise, it is healthy and growing. “We will update the market as and when the contracts are in,” says Xiao, who became the company’s CEO in April 2023.
Green Esteel, BRC Asia
Besides riding on the regional construction boom together, HG Metal shares something else with BRC Asia. Both companies are controlled by a privately held entity called Green Esteel, which, in turn, is led by steel tycoon You Zhenhua, who also owns stakes in Malaysia’s Southern Steel. While based in China, You is active in Singapore and the region through other channels. His wife, Tong Yan, is managing director of building owner-developer New Vision, whose recent project, the Ascott Shenton Way Singapore at 15 Enggor Street, broke ground in January.
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Green Esteel first became an investor in HG Metal in February 2024, when it acquired a 5.3% stake from Rise Capital for $2,226,780, or 27.8 cents per share. Green Esteel invested another $13.3 million via two rounds of placements in June and August 2024, bringing its total stake to 29%, just below the 30% mandatory general offer level. In December 2024, HG Metal raised another $19.3 million following a 10-for-27 rights issue at 26.6 cents per share.
As Green Esteel mopped up excess rights shares that other shareholders did not want, this triggered the general offer, upon which Green Esteel’s stake in HG Metal increased to 52.6%. Most recently, in January this year, Xiao, via her vehicle Dhu Holdings, sold her shares to Green Esteel, which further raised its stake to 61.7%.
Xiao, who has a background in commodities trading, explains that HG Metal can leverage synergy with Green Esteel by tapping into Green Esteel’s capabilities and regional network, thereby strengthening the company’s regional supply chains. For example, HG Metal’s investment in Eden Flame, acquired from Green Esteel, can provide HG Metal with reliable, competitive sources of low-carbon steel, she says.
With both BRC Asia and HG Metal sharing the same controlling shareholder, this raises questions about competition and how the two companies could complement each other. BRC Asia, says Ong, has been a supplier to HG Metal since 2003. “We have an established working relationship with them and there are opportunities for collaboration while maintaining our respective distinct positions,” Ong adds.
However, Ong and Xiao add that HG Metal’s approach and goal are to build a diversified supplier base that includes BRC Asia, other local players, and overseas suppliers. “We want to ensure that we have competitive procurement and supply chain resilience. On top of that, we want to forge positive, collaborative relationships with all key suppliers. Our focus will be on reliability, service quality, pricing, just-in-time delivery and operational efficiency,” Ong adds.
According to Ong, HG Metal and BRC Asia do compete in some areas where their respective offerings overlap. Both companies bid for projects independently based on their own commercial strategies and capabilities. Xiao stresses that despite the ownership structure, HG Metal is run independently. “Our board and management team continue to chart the growth of HG Metal by enhancing its competitive position and capitalising on future growth opportunities.” Various safeguards are in place, such as the interested person transactions (IPT) mandate, which governs all transactions, and oversight by the audit and risk committee, she adds.
Disciplined growth
To tap the growing market, in addition to the investment in Eden Flame, HG Metal recently spent $20.8 million to acquire 47 Tuas View, to add not just storage space but also up to 180,000 MT of production capacity over the next three to five years. “The rollout of the new capacity will be dependent on demand visibility, utilisation level and the broader construction outlook,” Ong says.
For now, HG Metal will focus on realising returns from these two investments and will not consider any other acquisitions. “Nonetheless, we will still consider earnings-accretive acquisitions that will align with our current business strategy, both upstream and downstream, as opportunities arise,” says Ong, whose day job is the CEO of corporate finance firm SAC Capital.
In recent years, Ong’s firm has been the most active in helping local small- and mid-caps raise funds via IPOs or placements. Besides bringing in new capital, the participation of certain institutional investors also helps attract other parties. Ong says that HG Metal will consider fundraising if there are specific objectives as part of its long-term plans, but for now, the company is deploying funds last raised in 2024, which have brought its cash balance to around $29.5 million. In short, the company is clear that it needs to be disciplined in its capital management and not get too carried away amid industry tailwinds.
“We are seeing some market challenges such as China’s subdued property market, which has significantly dampened domestic steel demand, resulting in global oversupply of steel rebar and downward pressure on selling price,” says Ong. Also, ongoing geopolitical uncertainties, coupled with margin compression and competitive headwinds, contributed to their cautious outlook. Any potential delays in large-scale construction projects may also affect timelines and overall performance.
Nonetheless, the company’s management is upbeat that HG Metal’s competitive advantages will enable it to thrive in this environment. “Our strong market position, coupled with agile procurement strategies and long-term contracts, will allow us to navigate price volatility and build a resilient order book over the long run,” says Ong.
