Trung Nam risk "in the selection plan"

On the morning of June 17, VNDIRECT Securities Corporation (HoSE: VND) held the 2023 Annual General Meeting of Shareholders with the participation of over 50% of shareholders attending, thereby meeting the conditions for organizing the 2023 Annual General Meeting of Shareholders.

More cautious goals

With the comments and forecasts about the 2023 market with positive and negative factors intertwined that have the potential to strongly impact the Vietnamese economy , the Board of Directors believes that 2023 will continue to be a year full of challenges, but at the same time, it is also an opportunity.

Ms. Pham Minh Huong, General Director of VNDIRECT, said that in 2023, the company will set out more cautious business orientations and scenarios than in 2022. Specifically, the company will continue to focus its core strategy on multi-channel investment services for individual customers.

In addition, the company also aims for sustainable development, improving the development of internal management systems to help balance economic benefits and risks.

The company's Board of Directors and the Executive Board have agreed to set a business target for 2023 to increase brokerage market share to a higher level; the parent company's pre-tax profit is VND 2,000 billion, the parent company's after-tax profit is VND 1,600 billion, up 16% and 17% respectively compared to 2022.

Issue additional shares to supplement capital

Accordingly, in 2023, the company will issue nearly 244 million individual shares to professional securities investors, expected to be from 1-5 investors.

According to Mr. Nguyen Vu Long, Chairman of the Board of Directors of VNDIRECT, the company needs strategic investors to find partners and enhance the management capacity of the enterprise. In addition, there are many opportunities in the capital market, expanding capital sources is a prerequisite to maintain competition, under pressure from the market and other securities companies with bank capital.

The expected proceeds from the private placement will be allocated for VNDIRECT's operations, including 20% to supplement capital for securities margin lending activities; 50% for investment in valuable papers on the market; 20% for securities underwriting activities and 20% for distribution of covered warrants.

Regarding the ESOP share issuance plan, the company continues to offer more than 24 million ESOP shares at VND10,000/share, equivalent to nearly VND244 billion. The capital raised from the share issuance is expected to be used to supplement capital for the company's business operations.

In addition, the company will also issue more than 12 million bonus shares to employees, equivalent to 1% of outstanding shares. The par value is nearly VND 122 billion. The capital source for implementation is taken from the owner's equity according to the most recent audited financial statements. Bonus shares can only be transferred up to 50% after the end of the 1-year period from the end of the issuance period.

Overview of VNDIRECT shareholders' meeting.

Finally, VNDIRECT will offer shares to existing shareholders at a ratio of 5:1, shareholders owning every 5 shares will have the right to buy 1 new share. The total number of shares offered is nearly 244 million units, the selling price is 10,000 VND/share.

The Chairman of VNDIRECT also announced that the company will stop paying cash dividends, and the company will pay stock dividends to shareholders at a rate of 5%. With the current number of outstanding shares, VNDirect will issue more than 60 million shares to pay dividends.

Thus, if 100% of the plans are completed, the company will issue more than 585 million new shares. VNDIRECT's charter capital will increase from VND12,178 billion to over VND18,024 billion.

Without fees, we cannot "feed" our team of experts.

Regarding the purchase of Trung Nam Group's bonds, Ms. Pham Minh Huong - General Director of VNDIRECT answered shareholders that the company underwrote the issuance of bonds for Trung Nam because it recognized that this was a potential enterprise. However, after a series of events related to corporate bonds, as well as the Van Thinh Phat incident, or the incident related to electricity purchasing, these are systemic risks.

“Therefore, we assess Trung Nam's risk as only a temporary risk of liquidity, economic model, and policy, and this is also in VNDIRECT's plan to select an underwriting enterprise,” said Ms. Huong.

However, she said the company did not anticipate the resale of investors, in addition, the handling of the capital department was not good. Therefore, VND was forced to buy back a huge amount of bonds at the time after the Van Thinh Phat incident occurred.

On the other hand, during the bond sale process, the sale was not in accordance with the nature of corporate bonds. Because of such incidents, VND was forced to make decisions to protect investors and protect the market.

Ms. Pham Minh Huong - General Director of VNDIRECT.

Ms. Huong also reassured shareholders that VND's transactions with Trung Nam were carefully researched and co-underwritten with Vietcombank .

Currently, the current power shortage has required most of Trung Nam's factories to operate at maximum capacity, so all factories have positive cash flow. The company also sees energy as a potential sector, serving essential needs, so in the long term there is no need to worry too much.

The amount of collateral assets that VNDIRECT is holding, such as a large amount of platforms in the energy sector, is still guaranteed, this is still a potential sector of the economy.

In the short term, thanks to the large capital source of VND, when the interest rate environment decreased, securities investors returned to the market, reducing the pressure on liquidity for the company.

Regarding the current zero fee trend, the leader of VNDIRECT said that the strategy of reducing fees will always be focused on, but without fees, it will not be possible to “feed” the team of experts working as consultants. If investors want to participate in the market, they need a lot of support from that team.

In addition, expanding market share for VNDIRECT chooses a long-term strategy, keeping investors in the market as well as building an investment lifestyle, instead of entering the market too quickly and too easily, which will also soon leave the market .

Source: https://www.nguoiduatin.vn/tong-giam-doc-vndirect-rui-ro-trung-nam-nam-trong-ke-hoach-lua-chon-a613021.html