SSI – Core business activities boom [In-line] – Earnings Flash

• 1Q24 pre-tax profit (PBT) soared 53% YoY to VND943bn (USD37mn). Thus, ROAE increased 1.4% YoY pts to 4.3%.
• 1Q24 TOI and net profit completed 24%/26% of our full-year forecasts, respectively.
• We see no pressure on our target price of VND36,500.

TOI increased thanks to favorable conditions in stock market

1Q24 TOI surged by 32% YoY to VND1.9tn (USD77mn) due to investment income (+27% YoY), margin lending income (+32% YoY) and brokerage revenue (+75% YoY).

• Investment income increased by 27% YoY to VND1.0tn (USD40mn) thanks to investment book balance increasing by 19% YoY to VND45.2tn (USD178mn) and investment yield increasing by 1.5% pts YoY (+0.9% pts QoQ) to 9.2%. Income from FVTPL contributed the most for investment income (89%) with growth of +32% YoY (-10% QoQ) to VND910bn (USD36mn) in 1Q24. In addition, investment yields of FVTPL, AFS and HTM improved slightly by 1%/0.8%/1.7% pts YoY to 9.6%/1.6%/7.2%, respectively.
• Margin lending income surged by 32% YoY to VND447bn (USD18mn) thanks to an increase in margin lending balances driven by heightened demand amid a bullish stock market and margin yield (+2.0% pts YoY to 11.7%). As of the end of 1Q24, SSI’s total margin lending balance reached VND17tn (USD678mn) (+15.9% YoY).
• Brokerage revenue rose to VND449bn (USD18mn) (+75% YoY, +20% QoQ). Market share on both the HOSE and HNX exchanges decreased by 2.2% pts YoY to 9.3% and 1.0% pts YoY to 7.3%, respectively, in 1Q24. However, this was offset by a resurgence in trading activity, with the average market liquidity value increasing by 115% YoY to VND21.4tn (USD854mn).

Gross profit margin narrowed mainly due to decline in ROI of investment book

Gross profit margin narrowed to 69.9% (-4.0% pts YoY) primarily due to a decrease in ROI of investment book (-0.2% pts YoY) to 5.5%. In addition, the Investment Banking (IB) segment experienced a loss of VND12.5bn (USD0.5mn) in 1Q24 (compared to VND3.2bn (USD0.13mn) in 1Q23) stemming from unfavorable business conditions. However, this was offset by increases in the gross brokerage margin (+18% pts YoY, +21% pts QoQ) to 23% and the margin spread in the lending segment (+% 1.2% YoY, -0.4% QoQ) to 7.1%.

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