Overall assessment of the operational status

 

2017 BUSINESS PERFORMANCE

 

The Vietnam Securities Market hit an impressive growth in 2017. VnIndex closed at 984.2 points - up 48% compared to the rate at the end of 2016. The market capitalization increased by 80.5% compared to 2016, equivalent to 70% GDP. By the end of 2017, the number of trading accounts also increased by 12%, reaching 1.92 million accounts, in which the number of accounts of both institutional clients and foreign clients increased by 14%. In August 2017, the derivatives market opened after 17-year operations of the underlying stock market, attracting investors’ interest with 16,300 accounts opened and the average trading volume of VND 1,600 billion per session in December 2017.


Given this context, SSI has had a successful year, setting many new records with the highest consolidated profit before tax in the company’s history. Specifically, the company recorded consolidated revenue of VND3,043.2 billion for 2017, up 19.8% YoY and surpassing 44.35% of the revenue target. Consolidated profit before tax reached VND1,405 billion, up 23% yoy and surpassing 32.8% of the profit target.

 


Strong performance was achieved in all business areas in 2017.

 

 

Revenue from the Securities Services reached VND 1,328.2 billion, up 53% compared to 2016, accounting for 43.5% of the total revenue of the Company. SSI continued to widen the gap from the runner-ups at the number one spot on both exchanges of HOSE and HNX, with the market share of 15.26% - a significant increase compared to the share of 13.04% for 2016. Accordingly, the revenue from Brokerage Services reached VND 779.7 billion for 2017, up 105% YoY. Margin loan and advances to customer balances reached more than VND 5,700 billion at the end of 2017. Revenue from lending activities and receivables (margin lending and advances to investors) made a major contribution to the total revenue of the Securities Services, with a share of 39%, reaching VND 519.65 billion, up 21% YoY. This result shows SSI’s serious investment effort in improving product and service quality and diversifying and offering investment analysis and recommendation reports, as well as the development of human resources with high quality, relevant qualifications and good professional ethics.

 

Principal Investment recorded a revenue of VND 1,060.8 billion, a contribution accounting for 34.7% of SSI’s total revenue. With total 2017 investment value up to VND 3,829 billion (subject to market value as at 31 December 2017), SSI continued its effective maintenance of value investment strategy, accompanying companies in their endeavors. At the year-end, SSI had 3 associates, namely The PAN Group JSC. (PAN-HOSE), Dong Nai Port JSC. (PDN-HOSE), and Vietnam Fumigation JSC. (VFG-HOSE), all of which achieved positive business performance for the last year.

 

Treasury successfully completed its assigned tasks, increasing the total assets to VND 18,764 billion by the end of 2017 - a record high of 34% YoY; ensuring the highest level of liquidity for the Company and Customers; effectively supporting the capital needs of other Business Units as well as achieving remarkable success in equity trading activities. Treasury recorded its revenue of VND 487.4 billion, accounting for 16% of the total revenue of SSI, up 33.2% YoY.

 

2017 also witnessed the success of Investment Banking with a variety of successful advisory large-scale deals such as: primary offerings of Vietnam Dairy Products Joint Stock Company (VNM - HOSE) worth USD396 million; secondary share offerings of Vincom Retail Joint Stock Company (VRE - HOSE) worth USD742 million; secondary share offerings of Ho Chi Minh City Development Joint Stock Commercial Bank (HDB - HOSE) worth USD300 million and capital mobilization of USD230 million for Hoa Phat Group JSC (HPG - HOSE), etc... Revenue from the Investment Banking has been at its highest level in recent years, reaching over VND 111 billion.

 

SSIAM continued to increase the total asset of external clients under management up to 60.3% compared to last year, reaching VND 6,112 billion. The 2017 revenue of SSIAM rose by 67.9% compared to 2016, reaching VND 54.6 billion.

 

In 2017, the total operating expense of the Company, including financial expense, was more than VND 1,650 billion, in which, the financial expense accounted for nearly 21%. The increase in financial expense occurred because SSI Treasury promoted its equity trading activities, actively entered into loan/deposit transactions with the commercial banks, and optimized both the liquidity management products and the division’s profit. The operating expense of the Securities Services occupied most of the Company’s operating expense due to expansion of brokerage network. Moreover, the robust growth in trading activities of customers resulted in the increase in trading fee (based on trading volume) paid to HOSE and HNX. Other operating expenses were within the target.

 


2017 FINANCIAL POSITION

 

In 2017, SSI’s total consolidated assets saw a 34% increase to closely VND 18,764.4 billion compared to 2016 and its owners’ equity reached VND 8,616.2 billion. The total asset grew at the record rate, mainly from the increase in banks accounts balances and margin loan balance. In 2017, in addition to SSI’s increasing affirmation as a prestigious financial institution operating professionally and effectively, the relationship between SSI and the commercial banks also appears increasingly positive with high credit rating. Many banks have raised their credit lines for SSI at a significantly higher rate compared to 2016, in which the huge increase was in unsecured credit line. Besides that, the policies on interest rates and products applied to SSI by the banks always offer some certain incentives. As a result, the Company’s treasury trading activities in 2017 achieved a robust growth, resulting in a considerable increase in loan balances and term deposit balances at banks.

Moreover, Securities Services, maintaining its No.1 position by brokerage market share, actively expanded its customer relationship, stimulate growth in transaction volume in parallel with growth in margin loan balances. Balances of margin loans and advances to investors as of December 31, 2017 reached more than VND 5,700 billion, up 50% compared to 2016. Despite significant growth, margin lending policy and credit risk management are always kept under safe and prudent threshold. In 2017, the Company did not incur non-performing loans. The increase in outstanding balances within prudent thresholds not only brings about effective use of funds for SSI but also is highly appreciated by customers thanks to appropriate risk management policies which help the customers reduce risks in using margin lending for investment.

 

 

2017 Financial Highlights

 

 

 

 

 


(*) Data was restated and amended in accordance with the new accounting guidance for securities companies.