Broker VNDirect confident to reach 2024 earnings goals amid a share price downtrend

Leading Vietnamese broker VNDirect Securities, which was hard hit by a ransomware attack in March, is confident about achieving its earnings targets despite a downtrend of its share price, said its CEO Nguyen Vu Long.

The executive made his statement at the firm’s 2024 AGM, held on Friday after the first meeting on June 17 failed to take place due to not meeting its quorum.

This year, VNDirect, listed on the Ho Chi Minh Stock Exchange as VND, is aiming for VND2.02 trillion ($79.36 million) in net profit. The brokerage targets revenue from the capital market at VND1.89 trillion ($74.54 million), down 39% year-on-year, and revenue from brokerage services at VND720 billion ($28.29 million), down 17%.

Notably, in the first half of this year, the firm posted VND1.3 trillion ($51.07 million) in pre-tax profit, fulfilling 50% of its 2024 plan. This result strengthens the company’s confidence in meeting its earnings goals this year.

In 2024, VND plans to issue 286.6 million shares to a maximum of 10 investors via a rights offering, aiming to mobilize capital for service expansion.

VNDirect is due to issue 30 million shares under the employee stock ownership plan at a price of VND10,000 ($0.39) apiece, along with 15 million bonus shares to its employees, in 2024-2026. The firm also plans a 2023 cash dividend payout of VND500 a share, in 2024.

Currently, VNDirect is issuing 304.5 million shares, including 60.8 million shares under a 2022 stock dividend of 5% and 243.5 million shares via a private placement. After the issuance, VNDirect’s charter capital will hike to VND15.22 trillion ($598.15 million) from VND12.17 trillion ($478.51 million).

So far this year, VND shares have declined by 17.6%, dropping from VND19,500 ($0.77) apiece to VND16,050 ($0.63) as of the close of the Friday trading session.

The movements of VND shares have been affected by the March cyberattack and negative rumors/information about Trung Nam Group. Trung Nam EDI, the renewable energy arm of Trung Nam Group, saw a 9.36% acquisition by I.P.A Investments Group JSC (IPA), the largest shareholder of VNDirect. The chairwoman of VNDirect, Pham Minh Huong, is also a board member of IPA.

In reply to shareholders’ questions about the investment in Trung Nam, Huong stated that if Trung Nam Group were to go bankrupt, VNDirect would not be affected. She explained that the company has been closely monitoring the situation and devising backup plans for potential risks. Huong also mentioned that IPA’s decision to invest in Trung Nam was based on its confidence in the latter’s capability in renewable energy development.

Addressing the slump in VND share price, CEO Long assured that the firm will do its best to maintain financial efficiency. Huong expressed surprise at VND shares underperforming compared to its securities peers, attributing it to negative rumors related to Trung Nam Group.