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Securities companies: Expiry of massive profits

Expected profit decline

Big-cap names, leading in market shares as SSI, and VND... all went backward. The securities companies themselves also suffered heavy losses due to investment in stocks. The proprietary portfolio, like SSI, suffers losses in the fourth quarter of 2022 due to investments in HPG, SGN, and VPB. In 2022, despite reporting a profit of more than VND 2,110 billion, SSI's earnings are still less than VND 3,365 billion in 2021. 

With VNDirect, proprietary trading no longer brings "terrible" profits as in previous years. After deducting proprietary trading expenses, VNDirect only brought in just 83 billion dongs, while last year's profit was up to 600 billion dongs. Furthermore, high-interest costs put a strain on VNDirect's sales and profit. VNDirect reported a loss after tax of 38 billion dongs in the fourth quarter of 2022, compared to a profit of 837 billion dongs in the same period last year. In 2022, VNDirect reported a sharp decrease in profit of more than 1,100 billion VND to only 1,220 billion VND. 

After two years of "hot" development, business results in 2022 show that securities companies may have passed the peak of profits. In the context of the gloomy market, the business plans for 2023 of securities companies are also strongly differentiated. After only completing nearly 70% of the profit target in 2022, the target of Viet Capital Securities (VCSC) in 2023 continues to "go backward". Specifically, the planned profit before tax is 1,000 billion VND, down 5.6%; revenue is expected to reach VND 3,246 billion, up only 2.8% compared to 2022. When it sets a target of 420 billion dongs in pre-tax profit in 2023, FPT Securities (FPTS) is likely to suffer its second straight year of negative profit growth, down more than 34% from 2022. 

Also read: Securities companies see huge profits » Breaking News, Latest World News Updates - VietReader Viet Nam

The ratio of pre-tax profit to charter capital in 2023 is expected to decrease to 19.6%, from 32.7% the previous year. Kien Thiet Securities (CSI) likewise set a business goal of "going backward" in 2023, with sales falling 39% to 23.5 billion dongs from the previous year. Profit before tax fell 5% to 12 billion dongs. 

Small securities companies with strong growth ambitions 

According to documents from the general meeting of shareholders of securities companies, many businesses confidently submit growth plans equal to this year. In which, securities companies in the banking ecosystem set relatively ambitious goals. That BIDV Securities (BSC) plans to achieve a pre-tax profit of 565 billion dongs, nearly four times higher than the performance in 2022 (149 billion dongs). The company also aims to reach the top 10 stock brokerage market share on HoSE in 2023. In addition, the financial safety ratio is expected to be at least 260%. 

According to BSC's leadership, Vietnam's macro-economy faces many challenges when an economic recession is likely to occur. However, Vietnam is still a country recognized by many reputable organizations as an ideal investment destination with good growth. 

Read more: Securities companies flock to gain market share » Breaking News, Latest World News Updates - VietReader Viet Nam

MB Securities (MBS) sets a revenue target of 2,700 billion VND, up 37% compared to the implementation in 2023. Target profit before tax is VND 900 billion, up 36% over the same period. Besides, MBS aims to be in the top 5 brokerage market share this year, before the company dropped in the HOSE brokerage market share in 2022. 

A company also in the ecosystem of another bank, VietinBank Securities (CTS), has confidently approved the 2023 plan with a target of EBIT of more than 230 billion VND, nearly three times higher than the previous year. 

CTS also believes that the market will be under pressure to adjust this year, but the company will have answers for gaining market share, increasing brokerage operations, improving margin loans, and focusing on building the M&A segment. In particular, CTS said it would make the most of the parent bank (VietinBank) to capture the M&A trend when foreign businesses step up acquisitions. The main orientations are transfer consulting, international capital arrangement consulting, and securities services for international customers. 

VIX Securities (VIX) plans to make VND 676 billion in pre-tax profit and VND 540 billion in after-tax profit, up 80% and 73% respectively compared to 2022. Mirae Asset Securities sets revenue targets for 2023 at VND 2,763 billion, up 5% compared to 2022. Profit before taxes is predicted to rise by 3% to VND 852 billion. Tien Phong Securities Joint Stock Company (TPS) set a revenue target of 2,831 billion VND, up 34%. However, a pre-tax profit of VND 230 billion, up 31% compared to last year.

Also read: 

Securities firms' Q4 profits plummet on market downturn ( 
Securities companies report good growth amid pandemic (

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