Profits soar for Vietnamese securities traders

July 20, 2021 | 17:38
A prosperous first six months of this year for securities traders has led to many reaching their profit targets for the whole year already.
Profits soar for Vietnamese securities traders
SSI employees consult clients. SSI estimates that the six-month pre-tax profit of four largest listed securities companies grew by 155.3 per cent from last year. - Photo ssi.com.vn

Everest Securities Joint Stock Company (EVS) has just announced second-quarter revenue of more than VND252 billion (US$11 million), up three-fold over the same period last year. Pre-tax profit was VND128.6 billion, up 6.7 times.

EVS leaders attributed the strong increase in business results in the second quarter to the outstanding growth of the stock market in both prices and liquidity.

In the first 6 months of 2021, EVS’s revenue reached nearly VND378 billion, up more than double compared to the first half of last year. Profit before tax increased nearly 24 times over the same period last year, reaching more than VND221 billion.

In 2021, EVS had targeted revenue of VND238.4 billion and pre-tax profit of VND81.2 billion. Thus, with the above business results, EVS has achieved 158 per cent and 272 per cent, respectively, of the revenue and profit targets for the whole year.

Viet Dragon Securities Joint Stock Company also announced that it exceeded 70 per cent of its profit target for the whole year of 2021 after only six months.

The company’s total revenue of the first 6 months of 2021 reached more than VND530 billion, meeting their yearly target, and up by 311 per cent compared to the first 6 months of 2020.

Revenue from its major businesses, brokerage and investment banking, almost all completed and exceeded their targets for the year.

Its profit before tax was estimated at more than VND306 billion. Profit after tax was more than VND245 billion, equaling 170 per cent of the 2021 plan, 18.6 times higher than the same period in 2020. This is also the highest profit the company has achieved to date.

Viet Dragon attributed the impressive results to the company’s prioritising the interests of its customers and extensive efforts to perfect its services.

The positive business results were also attributed to Rong Viet’s ability to quickly make good use of new opportunities on the Vietnamese stock market in the first half of 2021.

In the second quarter of 2021 alone, Techcombank Securities JSC (TCBS) reported revenue of VND1.3 trillion, up 52 per cent year-on-year and pre-tax profit reached VND1 trillion, up 32 per cent over last year.

In the first six months of this year, its revenue and pre-tax profit were VND2.32 trillion and VND1.84 trillion, respectively, up 56 per cent and 45 per cent over the same period last year.

After six months, TCBS has been in the list of the top securities companies with the highest margin balance, reaching VND8.6 trillion, up 238 per cent over the same period last year.

At the end of last month, Agribank Securities Company also announced six-month pre-tax profit of about VND160 billion, up by three times over the same period in 2020.

In a recent report on the securities industry outlook for the second half of 2021, SSI estimated that the six-month profit before tax of the four largest listed securities companies would grow by 155.3 per cent from last year. These four companies were SSI Securities Joint Stock Company, Ho Chi Minh City Securities Corporation, Viet Capital Securities Joint Stock Company and VNDirect Securities Joint Stock Company.

On the stock market, the benchmark VN-Index surpassed 1,400 in June. Since the beginning of this year, the VN-Index has recorded an increase of 27.6 per cent, making Viet Nam's stock market one of the strongest gainers in the world.

In the second half of 2021 and 2022, the main revenue growth driver of securities companies will be loosening monetary policy, new cash flow from individual investors, capital flow from foreign investors, investment banking services and capital raising of securities companies.

Although their revenue is expected to continue to grow until 2022, SSI experts believe that the current market dynamics may decelerate in the second half of 2021 after a strong increase in the first half of the year.

SSI estimates that profit growth for these four companies will return to normal at 7.7 per cent in the second half of 2021. Estimated profit growth is 66.8 per cent for the whole year of 2021 and will stay at a 21.4 per cent increase in 2022.

The main risk of the securities industry is falling profit margins for core businesses, including lending and securities brokerage, due to intense competitive pressure. Rising inflation, rising interest rates, and falling stock prices can lead to lower market liquidity and lower profits, SSI said.

VNS

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