Securities firms falling short of business plans

KS Securities has just been approved by its shareholders to downwardly revise its business plan in which the revenue and pre-tax profit targets saw 56.3 per cent and 37 per cent reductions compared to initial targets – falling to $38.6 million and $19.5 million respectively.

In the first three quarters, the company counted $31.2 million in revenue and $18.6 million in post-tax profit, up 3.4-fold and 3.8-fold on-year. Such a strong performance was based on the low comparative level in the same period last year when the company was in a reshuffle after changing key shareholders.

Many securities firms are falling short of their business plans in 2022 due to the sliding market

These results are, however, much below the initially ambitious targets set early this year.

Explaining to the shareholders, KS Securities’ leaders attributed this to the market volatilities that started in April and a change in its business strategy which is now focused on traditional tech-empowered stock business.

Along with KS Securities, the market movement scenarios of other securities firms have also fallen short of expectations.

In the first nine months of the year, VNDirect Securities reaped $68.1 million in pre-tax profit, down 19 per cent on-year and equal to 52 per cent of its full-year target based on its worst-case scenario.

Leading player SSI Securities could also only finalise 52 per cent of its full-year profit target over the same period.

At the company’s annual shareholders meeting in May, the shareholders trusted the Board of Management to revise the business plan to fit the actual market situation.

While SSI and VNDirect have fulfilled half of their profit targets, many other firms on an equal footing have been even further away from their set targets, even counting losses during the period.

APG Securities reported losses amounting to $2.13 million in Q3 due to loss-cutting stock sales and provisioning for financial assets.

The company’s Q3 loss wrote off the meagre gains from the first three quarters, dropping its profit figure to a negative $2.1 million compared to its set full-year profit target of $17.3 million.

APEC Securities also posted $16 million in losses in the first three quarters of this year, making it extremely hard for the company to reach its full-year profit target of 20.8 million based on the current market situation.

Faring slightly better, VietinBank Securities raked in $3.7 million in pre-tax profit in the first three quarters, equal to 21 per cent of the full-year profit target. Meanwhile, BIDV Securities reached nearly 35 per cent of its full-year profit target during the period.

The negative market movements have pulled back the business outcomes of many securities firms in their role as service providers.

The retreating business results as most securities firms joined the charter capital hike wave in the past two years have posed the threat of securities tickers’ value dilution.

In addition, the companies’ capital hike plans face numerous hardships in the current context.

For instance, APG Securities is set to be named among the top 10 securities firms in charter capital via private placements and offer existing shareholders a 1:1 ratio. However, as its ticker’s face value shed below VND3,000 (13 US cents) apiece, such a plan seems far away.

Firms change capital-raising plans amid bearish sentiment Many firms have begun to change their capital-raising plans amid the recent decline in the stock market, according to experts.

Business results suffer from securities investments in Q2 As the financial report season begins, besides companies announcing large profits with strong growth, many saw great losses in the second quarter of 2022.