HCMC, April 22, 2021 – Ho Chi Minh City Securities Corporation (HSC) (HOSE: HCM) successfully organized Annual General Meeting FY 2020 at New World Hotel, 76 Le Lai Street, District 1. The meeting summarized the business performance of 2020 and approved the business plan in 2021 with the aim of building business growth strategies upon digitization.

The AGM has officially approved the following proposal:

-   The Audited Financial Statements for the year ended 31 December 2020

-   FY2020 final cash dividend rate

-   FY2021 dividend plan

-   FY2020 profit distribution plan

-   Appointment of the independent audit firm for the fiscal year 2021

-   Adjustment of foreign investors’ ownership

-   Transfer of trading of HCM share to HNX

-   Adjustment of address of HSC’s Head Office

-   Amendments of HSC’s Corporate Charter

-   Amendments of HSC’s Internal Regulations on Corporate Governance

-   Regulation on organization and operation of the Board of Directors

-   Regulation on organization and operation of the Board of Supervisors

Without a doubt, 2020 was a challenging year for the Vietnamese economy and companies across many sectors as evidenced by GDP growth of 2.9%, the lowest in many years. On the other hand, the strength of the stock market took most investors by surprise with the VN-Index rising by 14.9%, while average daily trading value increased by over 59%.

The strong volatility of the underlying stock market underscored the importance of the derivatives market as a hedging tool and that consequently helped stabilize investor sentiment. The daily average number of derivatives contracts in 2020 increased significantly by 78% YoY to 158,000 contracts from 88,000 contracts in 2019.

The race for market share remained the main theme in the derivatives securities services market as securities companies, both local and foreign-invested ones, continued to offer fee reduction or even fee waiver, lower interest rate of margin lending to gain market share.

In the above context, HSC's stock market share inevitably declined over the year before. However, the absolute trading value via HSC still increased 32% yoy. In 2020, HSC remained the leading securities services provider with the second largest market share on HOSE (8.7%). HSC's market share in the derivatives market grew steadily, increasing from 8.7% in 2019 to 10.4% in 2020 as the number of contracts executed was up by 116% yoy.

As a market leader with solid competitive advantages, HSC was able to capture the opportunity and deliver a strong performance. HSC's profit before tax in 2020 reached VND660 billion, which translated to an increase of 24% YoY and was higher by 16% over the business guidance. Return on equity (ROE) and earnings per share (EPS) were at 12.1% and VND1,738, respectively. Both were both better than those in 2019.HSC’s stock price was also up by 47% in 2020 to VND31,400.

Revenue structure FY2020

Regarding dividends, after paying the FY2020 interim dividend at the rate of 5% (equivalent to VND500 per share), paying in cash on January 20, 2020, the AGM approved the FY2020 final cash dividend rate at 7% of par value (equivalent to VND 700 per share). Expected record date will be on 12 May 2021 and expected payment date will be on 27 May 2020.

The meeting also approved 2021 business plan, in which HSC targets to record with strong growth in financial indicators: total revenue of VND2,668 billion, increased 68% yoy. The targeted profit before tax is VND1,203 billion, sharply increased 82% yoy. The return on average equity ratio (ROAE) in 2020 is expected to increase to 17.1%. The securities brokerage fee, margin loans, and proprietary investments businesses are expected to generate the most revenue to HSC in 2021.

• Brokerage fee:

Private Client Division targets to achieve VND700 billions of brokerage fee, assuming HSC’s market share in the local client segment remains at 6% and market share in the derivatives brokerage reaches 12%.

In 2021, HSC continues to strengthen digital brokerage service. We complete and launch to mass the leading digital brokerage platform myhsc. The platform helps HSC improve customer experience, optimize operating model and cost. In term of product diversification, HSC will be continuously improving Activebond platform providing structured corporate bonds, increasing quality and quantity of covered warrants, and growing margin lending service to retail customers.

Institutional Client Division: Brokerage fee revenue of the Institutional Client division is targeted to increase to VND334 billion, which translates to a growth of 38% YoY.

In 2021, the Institutional Client Division will continue to enhance the professional services, which have been the core strength of HSC, to increase fee income from brokerage service, to diversify products provided to institutional clients and to actively participate in major put-through transactions with objective of maintaining the leading market share of 24% in the total trading value of foreign clients. In Q1 2021, in the role of co-book runner with the global investment banking Credit Suisse, HSC already successfully executed ABC put-through transaction with total value of $150 million. This success done in the condition of market volatility and challenging requirements from the seller confirms HSC as the leader in institutional brokerage.

• Margin lending:

Demand for margin loan is expected to remain high in 2021 in line with the assumption on the growth of trading value of the stock market. The margin lending business in 2021 will be more competitive as foreign-invested securities companies and bank-backed securities companies, which have strong and low-cost financial capabilities, are expected to continue their low-price strategies. However, HSC continues to maintain the leading position in the business via our strengths of risk management policies and effective margin lending operating model to facilitate our clients’ investing activities and to protect investors’ capital.

• Proprietary Investments:

In 2021, HSC will focus on expanding our business in the derivatives market and increasing covered warrant issuance size. We will also prudently manage our equity investment portfolio to capture growth opportunities in the stock market. Expected revenue in 2021 reach VND565 billion, increase 53% yoy.

• Financial Advisory:

The business’s revenue in 2021 is expected to come from M&A advisory service, capital issuance advisory service and listing advisory service, both in the equity and debt markets. The targeted revenue in 2021 is VND80 billion, which is more than double revenue in the year before. The revenue guidance is built upon transactions that are expected to be concluded in 2021.

Besides, to protect the interests of shareholders and investors, the AGM also approved the authorization for BOD to decide appropriate time, organize implementation plan and decide on issues related to the transferring of HCM shares from HSX to trading on HNX and transferring HCM shares from HNX to HSX after the new trading system of HSX comes into operation.