Vietnam fintech securities companies report shrinking profits, losses in Q2

Several fintech-backed securities companies in Vietnam reported declining year-on-year profits or losses in Q2/2024 due to cost surges.

DNSE Securities JSC, listed on the Ho Chi Minh Stock Exchange (HoSE) as DSE, saw its Q2 revenue up VND21.7 billion ($858,215) or 12% over the same period last year to more than VND198.2 billion, thanks to a 215% rise in securities brokerage revenue.

Interest from margin lending also roses 18.2% year-on-year to VND87.5 billion ($3.46 million), while profit from held-to-maturity investments surged 54.8% to nearly VND58.8 billion.

However, income from financial assets measured at fair value through profit or loss (FVTPL) plunged VND40.3 billion ($1.59 million), or 81%. In addition, business operating costs increased by 26% to VND117.2 billion, mainly due to a 102% jump in securities brokerage costs and a 640% rise in losses from FVTPL financial assets. Business management and financial costs soared 62% and 89.3%, respectively.

As a result, DNSE’s Q2 net profit dropped 33% year-on-year to nearly VND34.2 billion ($1.35 million).

In the first half, DNSE’s operating revenue reached VND379.7 billion ($15 million), up 16% over the same period last year. Its pre-tax and post-tax profits were VND130.5 billion ($5.16 million) and VND104.3 billion, up 16% and 15%, respectively.

As of June 30, 2024, the firm’s total assets hit VND8.9 trillion ($352 million), an increase of 20% compared to the beginning of the year.

Although Q2 profit decreased (mainly due to the impact of the re-evaluation of the proprietary trading portfolio), the bright spot was that the stock liquidity of DNSE continued to increase.

After the first half, the trading value and volume of DNSE reached VND81.55 trillion ($3.23 million) and more than 3.83 billion shares/bonds, respectively. The above indicators all exceeded the yearly numbers from 2019-2022.

Another fintech securities company, AIS Securities Joint Stock Company, also uses a non-brokerage model, with its entire stock investment process conducted online.

In Q2/2024, AIS Securities reported a sharp decrease of 44% in operating revenue over the same period last year to VND47.2 billion ($1.87 million). All business segments of the firm declined, with FVTPL income down nearly 52.2% to VND33.7 billion; interest from margin lending down 17% to VND3.4 billion, and stock brokerage operations down 41.5% to VND9.6 billion.

As a result, the company's Q2 net profit fell nearly 36% year-on-year to VND22.3 billion ($881,940). The H1 figure was VND45.7 billion ($881,945), down more than 10%.

Notably, securities companies acquired by fintech companies including CV Securities JSC, with a 49% stake held by Online Mobile Services JSC, and Vina Securities JSC, with 90% of shares owned by Finhay Vietnam Services and Distribution Company Limited, all reported losses in Q2/2024.

CV Securities's (CVS) operating revenue increased by 105% over the same period last year to nearly VND2.3 billion ($90,963). Due to a surge in securities brokerage costs to more than VND5.9 billion, it suffered a loss of nearly VND7.6 billion ($300,573), versus a loss of VND1.6 billion in Q2/2023. This marked the eighth consecutive quarter CVS had reported a loss (since Q3/2022).

In H1, CVS's net loss reached nearly VND14 billion ($553,687), bringing the accumulated loss as of June 30, 2024 to nearly VND108 billion ($4.27 million).

Similarly, Vina Securities (VNSC) also reported Q2 operating revenue of more than VND10.9 billion ($431,085), 2.4 times higher than Q2/2023. However, VNSC's operating costs during the period also soared by 2.3 times to VND7.6 billion and management costs skyrocketed 4.6 times to VND6.2 billion.

As a result, VNSC suffered a loss of VND5.18 billion ($204,865) in Q2, compared to a profit of more than VND81 million in Q2/2023.

In H1, VNSC incurred a loss of VND11 billion ($435,040), leading to an accumulated loss of more than VND270 billion as of June 30.