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GTJASVN Research_Vietnam Securities Sector Report _Jul2024 Eng vers_

02/08/2024

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Vietnam’s stock market is in the stage of development in both breadth and depth. Along with market development, securities services companies are implementing business strategies with the following main trends:

  • Zero fee
  • The emergence of AI broker
  • Asset management consulting products go hand in hand with the economy development, the rising income and middle class and the increased demand for accumulation, savings and asset management consulting.
  • Capital raising and M&A is an inevitable trend that helps securities companies improve their competitiveness and maintain resources for investment and expansion.
  • Other business trends and efforts to improve the market: cross-selling cooperation.
  • Network security issues in the context of increasing investment in technology and digitalization.

Business prospects of the securities services industry

  • Vietnam’s securities industry’s profits are expected to grow by 35% in 2024 thanks to improvements in liquidity, good market performance help securities companies record increasing profits from brokerage and proprietary trading activities.
  • With the current industry structure, margin and proprietary trading activities are the main profit growth drivers of securities companies. Meanwhile, brokerage plays an important role in the strategy of expanding market share and is a premise for profits from margin activities.
  • The revenue and profit of the margin lending segment are expected to increase slightly given that the total market margin lending reached a new peak in Q2/2024.

Investment recommendations

After a period of overheating (2020-2023), the valuation of securities stocks has returned to a more appropriate level. The industry average P/E is 16.31. For listed securities businesses, we favor a company owning industry advantages such as SSI, VCI, HCM, MBS, FTS.

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