Vietcap Achieved Profit Before Tax Of VND131BN IN Q2 2023

EARNINGS RELEASE

VIETCAP ACHIEVED PROFIT BEFORE TAX OF VND131BN IN Q2 2023

Vietcap Securities (HOSE: VCI, “Vietcap” or “the company”) announces its business results of the second quarter of 2023 (Q2 2023) and first half of 2023 (H1 2023).

Q2 2023 and H1 2023 financial summary

Profit before tax (PBT): For Q2 2023, PBT was VND131bn (USD5.5mn), improving 62% from Q1 2023. For H1 2023, PBT was VND211bn (USD9.0mn), down 76% compared to H1 2022 and fulfilling 21% of Vietcap’s 2023 guidance of VND1,000bn (USD42.4mn).

Return on equity (ROE): Trailing-twelve-month (TTM) ROE was 4.9% for Q2 2023 (6.2% net of differences in equity due to asset revaluation).

Total equity: VND7,370bn (USD312.3mn) as of end-June 2023 — 13% higher than at end-December 2022.

Q2 2023 and H1 2023 business segment highlights

Brokerage

Brokerage recorded Q2 2023 revenue of VND93bn (USD4.0mn; 3% higher compared to Q1 2023) and PBT of VND12bn (USD0.5mn) compared to a loss of VND2bn (USD0.1mn) in Q1 2023. For H1 2023, brokerage recorded PBT of VND10bn (USD0.4mn). Vietcap ranked seventh on HOSE with a brokerage market share of 4.82% in H1 2023.

Investment Banking

Vietcap’s Investment Banking Department was in the process of conducting notable advisory deals. Revenue from this unfinished deal were not recognized in H1 2023.

Investment

Investment revenue was VND214bn in Q2 2023 (USD9.1mn; 4% higher than in Q1 2023) with PBT of VND103bn (USD4.4mn; 132% higher compared to Q1 2023). In Q2 2023, Vietcap made several trades in BSR, ACB, TCB, MBB, TCB, and POW, among other stocks. Investment was the key earnings driver of Vietcap in H1 2023, achieving PBT of VND147bn (USD6.2mn).

Margin lending

Margin lending achieved revenue of VND195bn in Q2 2023 (USD8.3mn; relatively flat compared to Q1 2023) and PBT of VND26bn (USD1.1mn; 29% lower than in Q1 2023).
Vietcap’s margin lending balance as of end-June 2023 was VND5,395bn (USD228.6mn; 2% higher compared to end-December 2022). Vietcap’s margin lending business remained resilient despite volatile market conditions in H1 2023 as the company continued to pursue a prudent and conservative approach in this business.

H1 2023 financial position highlights

Vietcap’s debts were VND6,334bn (USD268.4mn) as of end-June 2022, declining 8% compared to end-December 2022. All of these debts were short-term and mainly used to fund margin lending activities.
Vietcap’s total debt to equity ratio declined to 85.9% at end-June 2023 compared to 105.8% at
end-December 2022.
Vietcap’s total assets were VND14,520bn (USD615.2mn) at end-June 2023 — 2% higher compared to end-December 2022.

Notable corporate actions in H1 2023

Viet Capital Securities Joint Stock Company officially changed its name to Vietcap Securities Joint Stock Company (“Vietcap”), with a new brand identity across all platforms. The updated name and logo went into effect on April 12, 2023. Vietcap’s rebrand is designed to symbolize the company’s innovative spirit and aspiration to maintain its position as Vietnam’s leading and most reputable financial services institution. Although the name has changed, Vietcap’s commitment to serving its clients remains unchanged. The company will continue to strive for excellence, expand its existing ecosystem, invest in new technological solutions, and follow global standards. We are excited to welcome its next chapter of growth.

In June 2023, Vietcap issued 2,000,000 ESOP shares (equivalent to 0.5% of total outstanding shares prior to the ESOP issuance). Vietcap’s total outstanding shares as of end-June 2023 were 437.5 million shares.
In July 2023, Vietcap signed syndicated loan financing for USD45mn (equivalent to VND1,062bn). The loan was arranged by Shanghai Commercial and Savings Bank, Ltd., through its offshore banking branch, and carries short-term interest rates based on the international money market. The loan represents another successful fundraising endeavor for Vietcap following four previous fundraising rounds in October 2022, May 2022, November 2021 and May 2020. The positive response from the market is a testament to Vietcap’s credit standing among investors and is expected to pave the way for future offshore syndicated transactions.

Income Statement Highlights