Amidst a challenging business target for 2024, the Board of Directors of DNSE Securities has received numerous inquiries from shareholders regarding the business situation in Q1 and the orientations to achieve the business target.
Could the company share more about its Q1/2024 business results and the roadmap for listing DSE shares?
Ms. Nguyen Thi Ha Ninh, Member of DNSE’s Board of Directors: DNSE expects to achieve approximately 70 billion VND in after-tax profit, equivalent to 85% of the business plan under the baseline scenario. In Q1, DNSE remained in the top position in market share for newly opened accounts with over 120,000 accounts, representing 30% of the market share for new account openings, indicating that one out of every three investors opening a securities account chose DNSE. As a result, the company’s AUM has grown strongly.
Over the past 90 days, the number of clients with assets worth over 1 billion VND at DNSE has increased by 30%, and the group of clients with an average NAV of 100 million VND or more has also increased by over 30%. We believe that profits will follow these figures, and DNSE can achieve its business profit target by leveraging its three competitive advantages: product diversification, sales channels, and optimal cost management.
Regarding the progress of the DSE share listing, DNSE has submitted its application to the Ho Chi Minh City Stock Exchange and expects to be listed on the HOSE by June at the latest.
Does DNSE have a capital increase need this year?
Mr. Nguyen Hoang Giang, Chairman of DNSE’s Board of Directors: After the recent initial public offering (IPO), DNSE will focus on optimizing the use of its current equity capital of 4,200 billion VND and has no plans for a further capital increase. In addition, DNSE is also developing a model for partners to provide capital to investors on DNSE’s platform. This will enable DNSE to use and leverage capital more efficiently than traditional securities companies.
Share about the plan to invest 10% of IPO proceeds in infrastructure?
Mr. Nguyen Hoang Giang, Chairman of DNSE’s Board of Directors: DNSE will divide this into two parts. The first part is to invest in infrastructure to compete in order processing speed. Currently, DNSE’s order processing speed for derivatives and underlying assets is around 10 milliseconds per order, and DNSE aims to build a faster platform in the future, around 5 to 8 milliseconds per order. The second part is to build a backup data center to prevent unexpected events such as fires, natural disasters, etc. In addition, DNSE will promote strategies related to AI (artificial intelligence) to create a competitive advantage.
DNSE shared that the focus plan for 2024 is on derivatives, and in Q1, it entered the top 5 in market share. What are the company’s plans to maintain its current market share?
Mr. Nguyen Hoang Giang, Chairman of DNSE’s Board of Directors: DNSE competes based on its good trading platform and commission-free trading policy. We are confident that DNSE’s derivatives trading platform is a differentiated one that is easy to use. In our new product roadmap, DNSE will build a specialized derivatives platform for retail clients by the end of this quarter.
DNSE is a new entrant, having only been in the derivatives market for a year, so clients need time to get familiar with the platform and experience its optimized features.
With the listing on the HoSE and the commission-free trading policy, the expansion of the derivatives market share will be faster. What we are most excited about is that investors who have traded derivatives on DNSE do not leave. The churn rate is almost zero. This is a positive sign, proving the potential of the product. In just a short period of time, DNSE has achieved a top 5 position in derivatives market share, despite the increasingly competitive market.
Question from major shareholder (PYN ELITE FUND): DNSE’s assessment of the attractiveness of high-yield bonds and share the results of the implementation of the company’s pioneering technology products, SENSES, ENSA?
Mr. Nguyen Hoang Giang, Chairman of DNSE’s Board of Directors: Bond products are still very attractive to investors in a low-interest-rate environment. However, high returns will depend on the repayment capacity of the issuing organization. In the recent past, issuers have focused more on issuing listed bonds or private bonds.
Investor demand is always present, and in the fourth quarter of 2023, the SSC required securities companies to adjust capital mobilization, which is a positive move that will create better bond investment opportunities for investors. Therefore, DNSE plans to develop tools to expand bond investment channels in the fourth quarter of 2024 or the first quarter of 2025.
Regarding technology-based products, the Ensa virtual assistant and the Senses stock analysis and scoring information platform are features that provide investors with continuous high-quality advice, offering a broader and deeper perspective on the market and stocks.
Despite being recently launched, the percentage of investors regularly asking the Ensa virtual assistant questions is currently around 13% to 15%. Most of DNSE’s investors use Senses as a tool to evaluate investment codes.
Following the incident with VnDirect Securities, what has DNSE done to enhance the security of its technology system?
Mr. Nguyen Hoang Giang, Chairman of DNSE’s Board of Directors: This is an issue that DNSE prioritizes. DNSE is currently working with a Canadian partner to manage and enhance security. DNSE implements two-factor authentication for investors, secures DNSE’s data center located in FPT’s data center, and builds a data backup platform.
The company is also recording data in a unique version so that no one can edit it. This data backup and security are to protect our commitment to 24/7 trading service. We also need to protect data to maintain our artificial intelligence product.
DNSE’s infrastructure deployment platform is different from other securities companies because it is automated by 98%. No one can say that they will never be hacked, but we expect that in the event of a system risk, DNSE’s platform will be able to recover and restore service within a short period of 4 to 8 hours.
Our goal is to minimize the impact on the customer experience, so that customers hardly notice that any problem has occurred or is occurring.
Please share the company’s progress in preparing for the KRX implementation.
Ms. Pham Thi Thanh Hoa, Member of DNSE’s Board of Directors and DNSE’s General Director: DNSE has completed and passed all of the Exchange’s tests and is ready to operate the new trading system, which supports high-frequency trading. At the same time, DNSE has begun rolling out enhanced products to be applied immediately after the KRX system is operational across the market.
