SSI – Strong gains from FVTPL supports earnings growth – Earnings Flash
  • 2024-01-31T00:00:00
  • Company Research

SSI released consolidated results for 2023 with a net profit of VND2.3tn (USD95mn; +35.2% YoY), fulfilling 101% of our FY2023 forecast. 2023 operating income (defined to include gains but not losses on the principal book) increased 13.0% YoY to VND7.2tn (USD296mn), completing 108% of our full-year forecast, with gains from FVTPL as the key growth driver. We attribute the main reasons behind a 56.8% YoY increase in 2023 gains from FVTPL to corporate bonds trading and investment activities. Meanwhile, 2023 operating expenses decreased by 10.0% YoY and completed 111% of our full-year forecast, primarily due to a lower-than-expected loss from FVTPL. Q4 2023 NPAT was VND514bn (-27.6% QoQ; +120% YoY). Overall, SSI’s results were broadly in line with our expectations. We see no material changes to our earnings forecasts for SSI, pending a more extensive review.

  • 2023 consolidated PBT from principal investment increased 186% YoY, accounting for 55.3% of SSI’s PBT. Q4 2023 consolidated PBT from principal investment decreased 6.7% QoQ, accounting for 59.5% of SSI’s PBT.
  • 2023 gains from HTM investments (which include deposits and certificates of deposit with terms of less than one year) increased 13.5% YoY amid a relatively flat average HTM balance, which could have been partly thanks to the impact of high interest rates in H1 2023, in our view.
  • 2023 brokerage revenue decreased 12.0% YoY following a 13.0% YoY drop in 2023 average daily trading value (ADTV) to USD738mn from USD849mn in 2022. We estimate that SSI’s market share on three trading venues combined increased 67 bps YoY to 10.0% in 2023. For Q4 2023 alone, brokerage revenue decreased 30.0% QoQ as SSI lost market share on a 28% QoQ drop in Q4 2023 ADTV.
  • In Q4 2023, SSI’s margin lending book increased 36.9% YoY but was relatively flat QoQ despite a low interest rate environment, which we believe could have been due to investors’ concerns amid an uncertain economic backdrop and/or stiff competition.

SSI’s consolidated 2023 results

VND bn

2022

2023

YoY

Q4 2022

Q4 2023

YoY

Operating income 

6,336

7,158

13.0%

1,351

2,047

51.5%

Gains from FVTPL

2,020

3,167

56.8%

526

1,007

91.3%

Gains from HTM 

417

474

13.5%

82

114

39.7%

Gains from AFS

3

6.0

110.4%

0

1.1

547.5%

Margin lending revenue 

1,801

1,568

-12.9%

345

439

27.2%

Brokerage revenue 

1,707

1,502

-12.0%

319

374

17.5%

Commission rate

0.19%

0.18%

-1.0 bps

0.19%

0.18%

-1.0 bps

IB revenue 

105

92

-11.6%

19

26

40.4%

Others 

283

348

22.8%

60

85

41.1%

Operating expenses 

2,705

2,435

-10.0%

641

926

44.5%

Loss from FVTPL

962

656

-31.8%

197

386

95.9%

Expenses for brokerage 

1,337

1,316

-1.5%

319

357

12.0%

Others 

407

462

13.6%

125

183

46.6%

Gross operating profit 

3,631

4,723

30.1%

710

1,121

57.8%

Financial income 

181

123

-31.8%

106

48

-54.9%

Gains from affiliates/ divestments 

117

88

-24.7%

83

38

-54.5%

Financial expenses 

1,416

1,638

15.7%

449

411

-8.6%

Borrowing costs 

1,031

1,570

52.4%

251

393

57.0%

G&A expenses 

296

362

22.0%

86

114

33.7%

Net other income 

10.0

1.5

-85.2%

7.3

0.5

-92.8%

PBT

2,110

2,849

35.0%

289

644

123.2%

NPAT 

1,698

2,294

35.2%

234

514

119.9%

Margin lending book 

11,057

15,134

36.9%

11,057

15,134

36.9%

GPM %

57.3%

66.0%

8.7 ppts

52.6%

54.8%

2.2 ppts

NPM %

26.8%

32.1%

5.3 ppts

17.3%

25.1%

7.8 ppts

Source: SSI, Vietcap (units are in VND bn unless otherwise stated)

Powered by Froala Editor