This afternoon (June 30), VNDIRECT Securities Company held the Annual General Meeting of Shareholders in 2020.
In 2019, VNDIRECT reached VND 1,502 billion in revenue and VND 383 billion in consolidated profit after tax, equity increased to VND 3,249 billion, total assets reached VND 11,577 billion. Business results only reached 80% of the profit according to the plan approved by the General Meeting of Shareholders, VND remained one of the securities companies with high completion rate due to the fierce competition of the market.
Due to the difficult situation of the stock market in general and changes in business orientation, revenue from securities services only reached VND 349 billion, down 34.46% compared to 2018, equivalent to a drop in liquidity across the stock market.
VNDIRECT’s margin lending activities still maintained their size despite the strong competition from reducing interest rates of competitors. By the end of 2019, the scale of margin lending portfolio reached more than 2,777 billion VND, up 13% compared to 2018. The number of customers registered to use margin accounts to trade securities reached 44,656 accounts.
In 2019, the total profit of the Capital Market Division reached VND 587 billion, with a growth rate of 21.4% compared to 2018. The largest proportion of revenue structure is still the investment activities currency market. Besides deposits, revenues from activities related to investment in valuable papers and bonds continued to rise sharply. In addition, investment banking activities revenue in 2019 also grew positively by increasing 113.64% from VND 22 billion to VND 48 billion in 2019.
The average number of securities trading accounts reached over 400,000 accounts and the value of managed assets (AUM) reached 55.2 billion VND, up 24% and 27% compared to 2018.
The company currently ranks Top 4 on the HOSE and Top 2 on the HNX, respectively 6.81% and 8.58% in market share on each exchange. In particular, VND has achieved the largest market share on UPCoM with a market share of 9.66% and Top 2 market share in the derivatives market with a market share of 12.69%.
In 2020, the Company offers 3 business scenarios in which the base scenario is VND 405 billion profit, and the parent company’s profit is VND 403 billion.
In the past 20 years, compared to businesses like Vingoup, TCB, HPG have grown very rapidly, leading securities companies such as VND, HCM, and SSI have come back to the old point. After 20 years, how is the VND expected to develop? Securities companies set low plan in the last 6 months, whether VND expects bad situation, right?
According to Ms. Pham Minh Huong, Chairman of VND, in the position of executive and founder, the achievement of the enterprise compared to names can be modest and pleasing. However, the 13-year journey is still short for financial institutions and does not represent all intangible values.
The company has 1,000 professionals who meet very high standards of practice and take the first steps to create Vietnam’s capital market. In the 21st century, Ms. Huong still highly appreciates the need for asset management, especially in the period of COVID-19, the number of new personal accounts is very large. In a period of 13 years, the market mainly accumulates customers looking for trading opportunities. However, in the new age will require management capacity and experience to produce more complex products to meet more complex needs. Owning an asset managed account to serve the needs of future assets is essential.
Meanwhile, Mr. Do Ngoc Quynh, General Director of VNDIRECT said that the challenge is to build other business plans for years. The company offers 3 business scenarios to keep abreast of the market: advantages, disadvantages and base scenario (easy to happen). The base scenario is higher than last year and the Company only gives the indicators to flexibly follow up.
In addition, on the question of assessing 20 years of market development, Mr. Quynh said that the securities industry has developed very strongly. Before 2000, Vietnam did not have a securities company and did not have a stock market but now there are more than 70 securities companies. Among 2.4 million accounts of the whole market, VND has more than 400,000 accounts and is the number one securities company in the market. The capital size of VND has increased nearly 60 times.
The size of the securities industry has increased sharply, particularly the stock is more than 70% of GDP, the bond is more than 40% of GDP. The stock market did not stay still.
However, stock prices of securities companies do not fluctuate like real estate companies and manufacturing companies. It is a taste of risk appetite, pricing, ways of providing information of Vietnam’s stock market alone. At present, investing in securities companies is like asset. VND remains to undistributed profit of VND 797 billion after dividend payment of VND 100 billion. This is the direction to continue focusing the budget for development investment to seize opportunities in the future.
Assessing market opportunities in the next 20 years, Mr. Quynh expects the management agencies to improve the quality of goods, to add goods, to enhance inspection, to enhance corporate governance standards.
In particular, the restructuring of a securities company will create competition on quality. There are too many securities companies competing at price.
With a strong investment in technology, dumping affects profits. The introduction of capital, technical and human standards will help reduce competition pressure. At this point, when implementing the CCP clearing system, participating members will be required capital of VND 500 billion or VND 250 billion. If making a request of VND 500 billion, there will be more than 40 dozen securities companies that do not meet the requirement. If requiring VND 250 billion, more than 20 securities companies will not meet the requirement. This will force small companies to increase capital or merge or dissolve.
Specific plan of each segment, estimated business results in 6 months?
Profit of VND will come from 4 axes: Traditional CK service, Investment and Business Bank managing cash flow and Asset management for VIP customers. Plan 2020 focuses primarily on traditional securities trading services. Meanwhile, there will be 60% profit from cash flow management
In the first 6 months, the whole VND has completed 40% of the plan for 2020. In particular, the traditional securities service business has completed up to 87% of the year plan.
Does the company plan to issue additional capital?
The capital scale of VND 3,000 billion is still guaranteed and currently the stock price is not good, so the VND has no plan to raise capital. Instead, the Company may issue debt bonds, mortgages