Meeting of General Meeting of Shareholders of Rong Viet Securities: Q1 profit before tax is estimated at 123 billion dong

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Rong Viet Securities held the AGM meeting on the afternoon of April 7. Photo: M.H

Dividend pay 2020 at the rate of 8%, profit plan of 2021 will decrease

In the afternoon of April 7, at the 2021 AGM, the Board of Directors of Viet Dragon Securities (VDSC, HoSE: VDS) presented the 2020 dividend plan at the rate of 8%, of which 3% of cash was advance in January and the remaining 5% was divided by shares.

Accordingly, the business will issue more than 5 million shares to pay dividends, charter capital is expected to increase from VND 1,001 billion to VND 1,051 billion. Time to implement in 2021.

Similar to many other securities companies, Rong Viet recorded positive results in 2020, revenue increased 36% to VND 466 billion, profit 3.3 times to reach VND 150 billion. This result mainly came from investment activities when revenue increased sharply from 17 billion to 128 billion.

At the meeting, Mr. Nguyen Mien Tuan, Chairman of the Board of Directors, said that the enterprise has worked with consulting units to develop a development plan for the period of 2021-2025 and a vision to 2030. This development plan will combine with too digital converter, creating the foundation for future business transformation.

As for the year 2021, the company leaders stated that favorable factors for the stock market movement include the macroeconomic recovery and stability, the prospect of positive investment attraction, low interest rates, Positive growth in listed businesses, vaccine outlook and market upgrade story. On the contrary, factors that adversely affect the market include complicated Covid-19 epidemic, political instability and global trade picture.

Accordingly, the board of directors set out a plan for total revenue of the parent company in 2021 reached VND 528 billion, up 13% compared to the previous year. In particular, the revenue of brokerage business increased by 22% to VND 130 billion, securities services increased by 20% to VND 238 billion, investment banks increased by 170% to VND 50 billion, investment activities alone decreased by 30% to VND 90 billion.

However, operating expenses are expected to increase by 27% to 348 billion dong, higher than the increase in revenue. Therefore, profit after tax in 2021 is planned at 144 billion dong, down by 4%. Dividend rate is maintained at 8%.

Rong Viet’s business plan is set out based on the judgment that VN-Index will fluctuate in the range of 1,000-1,300 points, average liquidity is about 9,000 – 10,000 billion VND / session.

Q&A: Mr. Nguyen Mien Tuan – Chairman of the Board of Directors represents to answer shareholders

First quarter profit is estimated at 123 billion dong, there is no plan to increase capital until 2022

Why does the business plan go backwards?

The market in the first quarter had periods of strong volatility, in the first half of January, the market rose well thanks to new investors (F0), then the market fell. In the face of these fluctuations, the Board of Directors on a prudent basis has set out the business plan as above. The Board of Directors wants to set up a business plan that can definitely be implemented.

Although the plan is low, the Board of Directors tries to perform the highest and expects shareholders to authorize the adjustment of the business plan to suit the reality.

Do you have a plan to raise capital, looking for large institutional investors to make a breakthrough?

Currently, many organizations want to become shareholders of Rong Viet. However, management wants to be highly efficient at the current facility and will raise capital at an appropriate time, possibly 2022. Management’s goal is to create an ROE of over 20%.

In 2021, the company increases its capital by 5% by paying stock dividends. At the same time, in the future orientation, RongViet will not pay much cash dividends.

What are the company’s first quarter business results?

The strong increase in market liquidity in the first quarter helped the business results of securities companies in general and Rong Viet in particular to be positive. Specifically, the first quarter’s provisional profit before tax is estimated at VND 123 billion, fulfilling 68% of the plan to submit to shareholders (the same period last year, the enterprise suffered a loss – PV)

In terms of revenue contribution from activities, brokerage is about 52 billion dong, loans about 60 billion dong, investment banks are about 33.5 billion dong, investment activities bring about 30 percent profitability.

In 2020, Rong Viet acquired 51% of the capital of Viet Long Fund Management Company. The company is expected to achieve a pre-tax profit of 5 billion in the first quarter.

How does Vietnamese Dragon compete in the current context?

Dragon Viet cannot compete with companies with strong capital or cheap capital when offering low interest rate incentives, low fees … Therefore, enterprises focus on strengthening the brokerage and customer service segments attacking the niche market, improving the quality of services, the goal is to give high profit rates to investors. Dragon Viet accepts short-term market share reduction but high efficiency in brokerage activities and securities services. The net asset value of customers in Viet Dragon at the end of the first quarter reached about VND 46,000 billion, an increase of about 20% compared to the end of 2020.

Rong Viet’s point of view is that investment (self-employment) is the strength because if the investment is good, customers can trust it. Businesses invest with the mind “not afraid of losing opportunities, only afraid of losing money”.

Banking investment is developed through 2 segments: capital arrangement (bond issuance consultancy) and M&A consultancy.

Specific time to issue additional shares to pay dividends?

Expected to be deployed in the second quarter.

The meeting ended with all submissions approved.

Source: – Translated by