SSI Securities AGM: Estimated profit before tax of VND 660 billion, most of which comes from proprietary trading
(ĐTCK) Responding to shareholders why proprietary trading of some shares of the Company, SSI leaders said that SSI is also an investor in the market, there is no advantage to ensure that the investment is not loss.
Opening the annual general meeting of shareholders took place this afternoon (June 27), Mr. Nguyen Duy Hung, Chairman and CEO of SSI Securities Joint Stock Company (SSI), said this year, as well as many other companies, due to the impact of Covid disease, the organizers of SSI AGM decided to hold the meeting including both forms, SSI shareholders can participate directly or online.
After this organization, the Organizing Committee will evaluate, if the feedback of the shareholders is good, it will be organized this way for the next year, so that more shareholders can participate. Currently, over 50% of SSI shareholders are foreign shareholders, they can participate, question and vote on congress issues without having to move as before.
Talking about 2020, Mr. Nguyen Hong Nam, Deputy General Director of SSI acknowledged, the stock market in 2020 has many challenges. At the beginning of the year, the market saw negative movements, VN-Index dropped by 31% in March – just after the drop at the time of the 2008 economic crisis, foreign investors also saw a net selling record of Q1.
At present, the market recovers about 30% from the bottom, the recovery momentum is led by the new cash flow of domestic block, but the stock market movement has not fully reflected the reality and there are still many unpredictable factors on the background. Because of its economic impact on Covid-19, SSI maintained a prudent view in the second half of the year.
However, there are also some factors that can positively impact the market: many newly established ETFs, such as VNFIN LEAD ETF, VN-Diamond ETF, and some other funds are IPO. At the same time, the amended and supplemented laws, such as the Enterprise Law and the Investment Law, are expected to have new guidelines on foreign investor ownership, Decree 32 on divesting from state-owned enterprises expectation to promote divestment of state-owned enterprises, especially small and medium-sized state-owned enterprises.
With that context, SSI, prudent plan with consolidated revenue reached 2,750 billion VND, consolidated profit before tax reached 868 billion VND.
At the meeting, Mr. Nam said, in the first 6 months, total revenue and other income in 6 months of 2020 is about 2370 billion dong, EBT is 660 billion dong, up by 58% and 29.4% respectively. Compared to the same period in 2019, completing 76% of the 2020 profit plan submitted to the General Meeting of Shareholders.
Regarding profit distribution plan, in 2019, SSI Securities expects to spend nearly 603 billion dong to pay 10% cash dividend to shareholders. In 2019, SSI does not set aside Charities, Welfare and Bonus Funds.
SSI also plans to issue a maximum of 7.5 million ESOP shares in 2020, in the form of bookkeeping, the issue price is equal to the par value. ESOP shares are not transferable.
Some questions of shareholders and answers of SSI leaders in the discussion
SSI margin of margin is low, while the market share is number 1, company leaders share more and ways to increase profit margin of this segment?
SSI is a financial services and brokerage company, located in 100 securities companies in the market, so maintaining the service quality, as well as the brokerage team, trading system and competitive way. As at present, it is difficult for any securities company to have a higher profit margin. The only way to get more new products is for brokers not only to sell stock brokerage services, but to sell other financial products like warrants
SSI’s criteria are to consolidate and standardize the best brokerage team, to support brokers who have enough tools to support investors to invest effectively in the market, and successful investors, then they have the opportunity to improve operational efficiency.
SSI’s proprietary trading why losses in some stocks?
SSI is also an investor in the market, there is no advantage to ensure a lossless investment. Not every SSI investment in stocks is profitable.
What is the level of competitive margin lending in 2020, what is SSI’s strategy?
The capital is the great advantage of SSI, the largest capital scale in the market, the credit rating in the financial market is the number one and the brokerage market share is number 1, so the transaction network through SSI is large.
This is the basic element in margin lending competition. By the end of 2019-2020, SSI has a preferential margin package to help investors have more conditions to participate in the market.
How does reducing deposit interest rates affect the margin capital?
SSI is a financial institution. Any changes in interest rates must be adjusted accordingly
First half of the year has reached 76% of the plan, so the 2020 plan is too cautious or not?
SSI Board of Directors are all professional financial people, including Daiwwa, so planning should be based on market forecasts. So far, everyone knows that stock market is a test of the economy.
Since March when the Covid epidemic broke out and spread, many cities around the world closed, so the economy could not rely on any basis for growth. Stock market is favored by cash flow but from the perspective of professional financial investors, it is not only looking at today’s developments to make long-term decisions. Vietnam is a good market, but the economy will have many challenges to the current world situation.
Therefore, SSI sets the plan as the report. With today’s results, if the stock market does not fluctuate too badly, it will certainly exceed the plan.
What will the scenario of cash flow from now to the end of the year?
In the first half of the year, mostly from individual investors, organizations and foreign investors were net sellers in the first half of the year, although net selling has slowed down and there is a sign of buying again. Cash flow to help the market maintain up to now is the cash flow from individual investors.
The scenario for the cash flow from now to the end of the year continues to be led by individual investment cash flow. Because foreign investment funds are also facing difficulties because of Covid, representatives of institutional investors have not been to Vietnam because the international flight routes have not been opened. In addition, from business strategy to action, they need a lot of time.
The convertible bonds of SSI issued at the end of 2017 and the beginning of 2018, after 3 years of expiry, are expected to convert 37 million shares to convert?
This is the investor’s decision, either taking money at the original committed interest rate, or converting it at an agreed price with them. Up to now, investors have not got any signals, maybe they will talk to the company and when the final information is available, SSI will inform and consult shareholders.
Structure of each segment of operations in the business plan 2020?
The investment segment expects 11% of total revenue and 27% of profit. Securities service segment accounts for 42% of revenue and 49% of profit. Capital source 41% revenue, 20% profit.
Why does SSI close some branches?
SSI has launched a new system, an online trading system, to support customers more conveniently in some branches without much brokerage advice.
The main objective of SSI is to consolidate and develop the most professional brokerage system to serve customers, while the trading system is a basic tool to support investors and increase interaction.
For some branches, existing for many years and with that model ineffective, SSI closed, but that does not mean changing the model completely online but always considering the brokerage team, human resources are asset and let SSI compete in the market.
What is SSI’s upcoming proprietary trading strategy?
The general policy of the Board of Directors is to minimize the investment of securities companies to buy and sell stocks on the floor, only participating in block and deal to buy and sell large quantities. And the trading of proprietary trading to serve the issuance of warrants and derivatives is still carried out.
Judging the upcoming Vietnam stock market will be like?
The most successful of 30 years of innovation is the creation of the stock market. If in the past 20 years there has been no stock market, what is the economy? There was not a series of new corporations, not even VNM, Vingroup, SSI Looking back like that, we saw that the stock market contributed to the economy and the country development a lot.
The importance level of the stock market is increasing because the function of the stock market is to mobilize capital for the economy, and investors can have liquidity with their assets and investments.
Specific revenue structure in the second quarter like?
22% for securities services, 52% for self-trading, 21% for capital, and for other parts. In the first quarter, the market was affected by the Covid epidemic, so the proprietary trading list was made a provision, now when the market recovers, it is reversed, many investments are also good.
When is T + 0, when will the market be upgraded?
These are the questions I ask every day. I have said and recommended regulators to consider this as an important criterion for market development. Upgrading helps the national credit rating go up, investors will be more interested in Vietnam and new funds can join. And when the recommendations and presentations are received, the consent of the management agencies and they are committed to early implementation.
And because I’m also a petitioner, I’m not sure when.
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