VNDirect’s 2024 Annual General Meeting: A Resilient Performance Amid Challenges
On June 28th, VNDirect Securities Corporation (ticker: VND-HOSE) held its 2024 Annual General Meeting, the second attempt after the first one was unsuccessful on June 17th. The meeting was well-attended by 419 shareholders, making it the company’s largest gathering to date.
VNDirect Resilient in the Face of Potential Trung Nam Bankruptcy
Ms. Pham Minh Huong, Chairwoman of VNDirect, shared her insights on the domestic and global macroeconomic landscape. She noted that the global economy has undergone significant changes, rendering past predictions obsolete. Vietnam’s economy, previously driven by FDI and private enterprises, is now facing growth challenges. Public investment is hampered by obstacles, and the country’s macroeconomic puzzle presents daunting questions. VNDirect also faced challenges due to the recent hacker incident, which brought a new perspective on the risks of the digital economy.
Ms. Huong emphasized the company’s renewed focus on safety and people, alongside maintaining financial objectives. She assured shareholders that VNDirect will not go bankrupt even if Trung Nam does, as they always calculate risks meticulously. The risks associated with Trung Nam are mostly legal rumors, project difficulties, and policy changes, which VNDirect continuously monitors and creates contingency plans for.
VNDirect chose to invest in the electricity sector due to its capital-intensive nature and stable cash flow. They believed in Trung Nam’s capabilities and the potential of the renewable energy sector, which also attracted foreign investors. However, legal risks and bond market issues have made it challenging for Trung Nam to restructure its debt.
Solid Financial Performance in the First Half of 2024
Despite challenges, VNDirect reported impressive financial results for the first half of 2024, with a pre-tax profit estimate of over VND 1,300 billion, surpassing 50% of the target presented to shareholders.
Ms. Huong attributed the decline in VND’s stock price to various factors, including the hacker incident and Trung Nam’s difficulties, which had a short-term impact. She acknowledged that VND is undervalued compared to its peers in the securities industry. The company aims to improve its IR efforts to address this issue.
VND’s performance was also affected by Trung Nam’s legal risks, as the stock market thrives on rumors. However, Ms. Huong assured that any potential damage would not be significant, as they always maintain adequate limits to prepare for adverse scenarios. VND boasts a sustainable profitability profile, and the company remains disciplined in its financial reporting, making prudent provisions.
Looking back at 2023, VNDirect successfully achieved its key objectives, with a pre-tax profit of VND 2,482 billion, surpassing the target by 124%. Net revenue grew by 15.5% to VND 5,106 billion, and net profit increased by 48.1% to VND 2,022 billion, positioning VNDirect as one of the top-performing securities firms in the market. As a result, the company approved a 5% cash dividend for 2023.
For 2024, VNDirect has set conservative targets, with a 39% decrease in capital market revenue and a 17% drop in securities brokerage revenue. However, they expect an 18% increase in margin lending income and significant reductions in operating and financial expenses, resulting in a slight 2% growth in pre-tax profit to VND 2,525 billion. The post-tax profit remains unchanged from the previous year at VND 2,020 billion.
To boost capital, VNDirect plans to offer 268.6 million shares to professional investors through private placement and direct sales, with a minimum price equal to the book value per share. These shares will be restricted from transfer for one year, and the offering will take place in 2024 and 2025, subject to the approval of the State Securities Commission.
Additionally, VNDirect intends to implement an employee stock ownership plan (ESOP), issuing 30 million shares worth VND 300 billion. The plan is expected to be executed between 2024 and 2026, with the Board of Directors approving the list of beneficiaries. The proceeds will be used to support the company’s development plans.
