Broker HSC borrows extra $319 mln to enlarge stock brokerage share

Ho Chi Minh City Securities Corporation (HSC) has decided to borrow an additional VND8 trillion (318.6 million) from Vietnamese state-controlled bank BIDV as part of its strategy to capture a larger share of the stock brokerage market.

The collateral for this loan includes partial or full deposits at BIDV, deposits at other financial institutions, and valuable papers issued by BIDV.

HSC, listed on the Ho Chi Minh Stock Exchange as HCM, plans to use the loan to raise working capital and invest in valuable papers, government bonds, and bonds issued by credit institutions listed and traded on the Hanoi Stock Exchange, as well as stocks, fund certificates, and other types of securities. Additionally, the loan will supplement its working capital.

Recently, HSC decided to borrow a maximum of VND3 trillion ($119.47 million) from state-controlled Vietcombank, the country's largest lender by market capitalization. This loan will be used to finance government bonds, stocks, and working capital.

HSC is making efforts to expand its stock brokerage market share, which rose from 5.32% in 2023 to 5.92% in Q1/2024 and 6.41% in Q2. With a 6.17% market share as of end-June, the firm ranked fifth among major securities in Vietnam.

In the first half of this year, HSC posted VND1.96 trillion ($78 million) in operating revenue, up 61% year-on-year, while its net profit doubled to VND590 billion ($23.5 million).

The firm booked VND468 billion ($18.6 million) in revenue from stock brokerage services, up 72% year-on-year, and VND725 billion ($28.87 million) in profit from loans and receivables, up 60%.

As of the end of Q2 of this year, HSC’s total assets rose by nearly VND10 trillion ($398.3 million) to VND27.76 trillion ($1.11 billion). Of the amount, the asset from fair value through profit and loss hiked 2.7 fold to VND5.9 trillion ($235.2 million).

HSC holds VND1 trillion ($39.8 million) worth of BIDV bonds, VND1 trillion worth of MBBank bonds, VND800 billion ($31.8 million) worth of listed stocks and stocks traded on the Unlisted Public Companies Market (UPCoM).

Its short-term liabilities jumped 78% from the beginning of 2024 to VND16.27 trillion ($648.4 million). HSC borrowed nearly VND11 trillion ($438.16 million) from local banks and VND4.2 trillion ($167.5 million) from overseas lenders.

This year, the company aims for a net profit of VND1.16 trillion ($46.2 million) on revenue of VND3.18 trillion ($126.7 million), up 72% and 42% year-on-year, respectively.

As of February, HSC was 5.03% held by a group of foreign shareholders: KITMC Worldwide Vietnam RSP Balanced Fund; KIM PMAA Vietnam Securities Investment Trust 1 (Equity); KITMC Worldwide China Vietnam Fund; KIM Vietnam Growth Equity Fund; Kim Vietnam Fund Management Co., Ltd; and KITMC Worldwide Vietnam Fund 2.