KIS Securities Q2 profit declines due to increased cost burden

Q2 2024 profit downgrade due to rising cost burden

KIS Vietnam Securities Corporation (Code: KIS) has just announced its business results for the second quarter of 2024. Of which, revenue reached 653 billion VND, an increase of 69% over the same period.

Revenue recorded from all business segments showed signs of growth. Specifically, the profit from FVTPL financial assets increased 2.6 times compared to the same period, reaching VND356 billion. Profit from loans and receivables also increased by 23%, to VND157 billion. Revenue from securities brokerage increased by 25%, reaching VND112 billion.

KIS Securities Q2 profit declines due to increased cost burden (Photo TL)

However, on the contrary, expenses in the period also showed signs of increasing. In particular, business management costs increased by 71%, accounting for 76 billion VND, dragging down the business results of the second quarter. After-tax profit was only 102 billion VND, down 4% compared to the same period despite strong revenue growth.

In the first 6 months of the year, KIS Securities achieved revenue of 1,256 billion VND, up 45% over the same period. Profit after tax reached 256 billion, up 39%.

Compared to the target set for 2024, with revenue of VND 1,051 billion and pre-tax profit of VND 678 billion, KIS Securities has currently exceeded the revenue plan but only completed 47% of the annual profit plan.

Short-term debt increased sharply by 48% compared to the beginning of the year

Regarding asset structure, by the end of the second quarter of 2024, KIS Securities' total assets reached VND 12,230 billion, up 24% compared to the beginning of the year. Of which, loan assets accounted for VND 7,856 billion, equivalent to 64.2%.

Compared to the beginning of the year, the amount of loans increased by 18%, mainly from margin loans. In addition, the investment in corporate bonds also recorded 441 billion VND, an increase of nearly 4 times after only 1 quarter.

Notably, the majority of KIS's debt structure is short-term debt, accounting for 85% of total liabilities. Compared to the beginning of the year, KIS's short-term debt increased by 48%, accounting for VND5,688 billion.

Was fined for involvement in Tan Hoang Minh bonds

KIS Vietnam Securities is a Korean-invested company that earns hundreds of billions of dong in profits from the Vietnamese market each year. The company’s name is not unfamiliar to stock investors, especially since it was fined hundreds of millions of dong in connection with Tan Hoang Minh bonds.

In 2022, the State Securities Commission fined KIS Vietnam Securities VND 250 million for failing to ensure that the information in the offering or private bond issuance documents was accurate and verifiable.

Specifically, KIS Securities was the unit providing bond offering consultancy services for 3 offerings of Winter Palace JSC, a subsidiary of Tan Hoang Minh in November 2021. The value of the 3 offerings was 254 billion, 196 billion and 1,900 billion VND respectively.

According to the State Securities Commission, KIS Securities Company has not fully performed its responsibility in reviewing compliance with regulations on private bond offering documents.

Specifically, in the three above-mentioned offerings, the issuance plan was approved by the Winter Palace's General Meeting of Shareholders but did not include the plan for using capital sources and the method of paying interest and principal of bonds, and the responsibilities and obligations of each organization and individual providing services related to the bond issuance.

Source: https://www.congluan.vn/chung-khoan-kis-loi-nhuan-quy-2-2024-di-lui-do-ganh-nang-chi-phi-gia-tang-post303723.html