Although 2023 is forecast to be a difficult year, many securities companies still set a target of positive profit growth in 2023, besides some others adopting more prudent plans.

Viet Capital Securities Joint Stock Company (VCI) plans to earn revenue of VND3.24 trillion in 2023, and pre-tax profit of VND1 trillion. Compared to the performance of the previous year, the revenue target decreased by 12 per cent while the profit target decreased by 6 per cent.

VCI said that the plan was built on the forecast that the VN-Index will fluctuate around 1,100 points by the end of 2023.

This company also pointed out certain risks that may affect the Vietnamese stock market such as slower global growth leading to greater disruptions to production, trade and FDI; higher-than-expected inflation causing interest rates to stay higher for a longer period of time; financial problems of real estate developers affecting banks and the economy; fiscal policy tighter than expected and other risks such as the further escalation of the Russia-Ukraine conflict.

VCI forecasts that the securities brokerage sector will see difficulties in 2023 with fierce competition among companies. The strategy of the companies will be to lend high margins, apply the policy of exempting or reducing transaction fees, and improve the brokerage team.

Viet Nam Construction Securities Joint Stock Company (CSI) forecasts that the COVID-19 pandemic being under control in neighbouring countries will stimulate foreign capital inflows - which is a niche market of CSI. The company will still mainly focus on promoting main business lines such as brokerage and margin lending. At the same time, it will maintain and develop the investment consulting segment; as well as exploit and develop the asset management segment.

It plans revenue down by 39 per cent to VND23.5 billion and pre-tax profit down by 5 per cent to reach VND12 billion.

FPT Securities Joint Stock Company (FTS) has set a target of total revenue of VND770 billion in 2023, down 27 per cent compared to 2022. Pre-tax profit decreased by 34 per cent to VND420 billion.

According to FPTS' board of directors, the stock market in 2023 is less attractive with reduced liquidity compared to 2022 plus businesses are facing many difficulties and challenges. There will be no new products and only a few new stocks listed and registered for trading. In addition, competition on transaction fees between securities companies is becoming more intense.

Looking back at the previous year, among the three securities companies mentioned above, only CSI maintained positive growth in revenue and profit after tax, reaching VND38 billion, up 17 per cent year-on-year and VND13 billion, up 34 per cent, respectively.

VCI recorded a pre-tax profit of nearly VND1.06 trillion, down 43 per cent compared to the previous year. With the results achieved, this company fulfilled nearly 56 per cent of the profit plan for the whole year.

Profit before tax of FPTS also decreased by 12 per cent to VND638 billion and only reached nearly 94 per cent of the profit before tax plan. The Board of Management said that the reason was due to unfavourable market movements in the second half of 2022, plummeting market liquidity, causing brokerage revenue to decrease accordingly.

Optimistic plans

Despite a difficult forecast for 2023, MB Securities Joint Stock Company (MBS) sets a revenue target of VND2.7 trillion, up 37 per cent compared to 2022, profit before tax at VND900 billion, up 36 per cent year-on-year. In addition, MBS aims to enter the top 5 brokerage market share list this year.

As for the previous year's business results, revenue reached VND1.98 trillion and pre-tax profit touched VND661 billion, down 12 per cent and 10 per cent, respectively, compared to results in 2021.

Vietnam Industrial and Commercial Securities Joint Stock Company (VIG) sets ambitious targets for 2023 with operating revenue of nearly VND119 billion and pre-tax profit of more than VND50 billion, up 65 per cent and up 19 times over 2022, respectively.

Phu Hung Securities Joint Stock Company (PHS) also announced a business plan with total revenue of VND788 billion and profit after tax of about VND116 billion, nearly twice the estimated result in 2022.

In 2022, the Vietnamese stock market witnessed a decrease of nearly 33 per cent of the VN-Index, accompanied by a deep drop in market liquidity. In the first two months of 2023, domestic investors opened less than 100,000 new accounts in total.

The high interest rate level plus the global economic recession is forecast to continue to have a negative impact on the activities of businesses in the future. After the fourth quarter reporting season, the profits of listed companies dropped sharply, making the market valuation (P/E) no longer really attractive and becoming a barrier to attracting capital in the short term.

However, according to Lumen Vietnam Fund, by the second half of 2023, interest rates are expected to be properly managed, business activities begin to prosper, helping the profit after tax of companies to grow by 10-15 per cent over the same period last year. Besides, the more stable corporate bond market will create a good basis for a new up cycle of the stock market. — VNS