Losses from self-employment, profits plummet
According to the financial report for the second quarter of 2023, Smart Invest Securities JSC (code AAS) recorded operating revenue of VND 168 billion, down 46.4% over the same period. Most of the main business segments of this securities company are operating inefficiently.
Notably, the proprietary trading segment lost about VND70 billion, mostly from buying and selling unlisted corporate bonds. Of which, revenue from selling financial assets recorded through profit/loss (FVTPL) reached nearly VND22.6 billion, down 79% over the same period. Revenue from dividends and interest arising from FVTPL also decreased by nearly 21% to VND140.4 billion. Loss from selling FVTPL was VND99.5 billion.
In the second quarter, Smart Invest's securities brokerage revenue decreased by 59.3% compared to the same period last year, down to VND3.5 billion. Interest from loans and receivables also decreased by more than 83% compared to the second quarter of last year, down to VND1 billion.
After deducting expenses and taxes, Smart Invest's net profit was nearly VND39.7 billion, down 66.7% compared to the same period last year. In the first 6 months of the year, this securities company recorded operating revenue of VND399 billion and after-tax profit of VND59.9 billion, down 37.8% and 70.8% respectively compared to the same period last year.
By the end of the second quarter, Smart Invest's total assets had decreased by 4.6% compared to the beginning of the year, down to VND2,200 billion. Of which, receivables accounted for more than 44%, including VND843 billion of receivables from the sale of main assets and VND129 billion of receivables and accrued dividends and interest on main assets.
FVTPL items have a fair value of nearly VND594 billion, including VND81.3 billion of listed stocks and VND514.4 billion of bonds. In addition, Smart Invest also has nearly VND225 billion of available-for-sale (AFS) financial assets, mainly unlisted stocks.
Violation of information disclosure on bonds
SmartInvest, formerly known as Gia Anh Securities JSC, was established on December 26, 2006, with a charter capital of VND 20 billion. In March 2011, Gia Anh Securities changed its name to Hamico Securities JSC - a member of Hamico Minerals Group.
In October 2015, the company changed its name again to Smart Invest Securities JSC. A year later, the company increased its charter capital to VND310 billion and in March 2021, it continued to increase its charter capital to VND800 billion.
Along with the capital increase process, Smart Invest has also actively arranged many bond issuances for related businesses. According to HNX statistics, in the period 2018-2022, the "ecosystem" of this securities company has issued more than 1,600 billion VND in bonds with interest rates of 9-12%/year.
Of which, Smart Invest issued 3 lots of bonds coded AAS.1.20, AASL1921001, AASH2227001 in 2019, 2020 and 2022 with a total value of more than 128 billion VND. However, two lots of AASL1921001 and AAS.1.20 have been settled, while the bond lot coded AASH2227001 will mature in February 2027 but was bought back 60 billion VND in advance in December 2022, with a remaining value of nearly 68 billion VND.
Smart Invest Consulting & Management Company Limited also issued 2 lots of bonds TQSCH2131001 and TQSCH2227001. Of which, the TQSCH2131001 bond lot was issued on December 27, 2021 with an issuance value of VND 376.8 billion, interest rate of 10.5%, term of 10 years, but was fully repurchased by the company on November 7, 2022. The remaining lot is the bond lot code TQSCH2227001 issued on June 30, 2022 and matures on June 30, 2027 with an issuance value of VND 200 billion, interest rate of 10.5%/year.
Pyxis Asset Management JSC (Smart Invest Asset Management JSC - formerly known as Demoda Fashion & Garment JSC) has 2 bond lots issued in 2021. Of which, bond lot DMDCH2124001 issued in July 2021 has a value of 160 billion VND, term of 3 years and bond lot DMDCH2131002 issued in December 2021 has a value of 105 billion VND, term of 10 years but both were bought back by this company before maturity in October 2022.
Smarttech Technology Investment Joint Stock Company (formerly Clothesrack Fashion Joint Stock Company) in 2020 issued a bond lot coded C_BOND with a value of VND 50 billion, term of 2 years and in 2021 issued an additional bond lot CLRCH2124001 with a value of VND 100 billion, term of 3 years. To date, the company has fully paid off both of the above bond lots.
Notably, on July 25, the State Securities Commission Inspectorate decided to fine Smart Invest Securities more than VND160 million for a number of administrative violations, including not publishing a report on the use of capital from bond issuance; and the payment of interest and principal of bonds.
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