Shareholders ask why business is good but share price is shrinking.
At the shareholders meeting of Saigon Securities Inc. (SSI) held on April 23 the issue of most concern was not its business performance but its low stock price given its size and financial potential.
SSI holds the largest brokerage market share at the Ho Chi Minh City Stock Exchange (HoSE) and the second-largest at the Hanoi Stock Exchange (HNX). As at the end of the 2014 fiscal year its total assets stood at VND8.9 trillion ($412.15 million), revenue VND1.56 trillion ($69.46 million) - double the figure in 2013 of VND726.3 billion ($33.63) - and operating profit was VND859.9 billion ($39.82 million), an increase of 162 per cent compared to 2013.
In 2015, in the context of decreasing liquidity, SSI still set a high target of VND1.31 trillion ($60.56 million) in revenue and pre-tax profit of VND1.02 trillion ($47.23 million).
After the first quarter and the beginning of the second quarter of this year SSI had recorded positive business results but its stock price was only around VND20,000 - VND21,000 (or around $1); lower than the purchase price many investors had paid.
Representing long-term investors, Director of Dragon Capital Vu Huu Dien said “the stock price has never been as low as it is now, yet last year SSI increased its business indicators and grew its market share. It’s at a cheap price compared with the book value, financial capacity, potential for development, and SSI’s position in the market. The Board of Management need to react quickly and be more interactive to increase the price.”
Chairman of SSI Nguyen Duy Hung acknowledged that the stock price is quite low. He said that besides the effect of market fluctuations, another reason is that the transparency of SSI’s activities means that it cannot work with certain investors that have specific characteristics and do not interact with small investors.
SSI leaders said that the Board will take measures to improve the stock’s liquidity. Investors, however, need to understand that SSI’s total capital is huge and that the company operates efficiently, but the stock price is determined by the market. "Our responsibility is to increase transparency, comply with regulations, and focus on improving our financial indicators and investing efficiently," Mr. Hung said.
Commenting on the stock market, he forecast that from now until the end of the year there will no major impacts, as was seen earlier in the year. Average liquidity on both markets is expected at VND3 trillion ($138.93 million) a day.
Regarding management personnel, Mr. Nguyen Duy Khanh, born in 1991 and son of Mr. Hung, was voted on to SSI’s Board of Management at the meeting. He holds a Degree in Finance from George Washington University in the US.