Dear Shareholders, Clients, Partners, and all members of Rong Viet Securities Corporation,
The Vietnam Stock Market ended the year 2019 at 960.99 points, up by 7.7% on the HSX. The HNX was down by 1.65%, and the UpCom was up by 7.06%. However, in contrary with the increase of the VNINDEX, the market liquidity decreased significantly by 29% YoY, reaching the average of VND 4.61 trillion per trading day (the number of 2018 was VND 6.54 trillion per day).
It is obvious that the Vietnam Stock Market did not fully reflect the Vietnam macroeconomic situation in 2019. By the end of the year, Vietnam’s GDP reached 7.02%, bypassing the target of 6.8%. Although this growth rate was lower than that of 2018 (7.1%), it was still a high figure compared to that of the 05-year-period from 2012 -2017. All of the major macroeconomic indicators were positive and under control.
Based on the above-mentioned information, although the macroeconomic situation was quite positive, the stock market did not go along well. In addition, the lower liquidity also made it a difficult year for all participants on the stock market. Other important factors such as the unsettled US – China trade war and the tension in the Middle East when the US and Iran accelerated their actions to dangerous levels made the World become more instable. These events happened frequently around the Globe, resulting in doubts and instability for economic activities worldwide. Although the US stock market had a wonderful year with many records, doubt and instability remained on people’s mind throughout the pass year.
Given the situation, Rong Viet Securities Corporation ended the year 2019 with less than expected results. This was the 2nd year in the row that the Company did not meet the target set by the Shareholder General. In 2019, the Company’s revenue reached VND 434.3 billion, down by 20.9% compared to that of 2018, and only reached 78.2% of the year target (VND 439 billion). The profit before tax reached VND 42.5 billion, down by 50.07% compared to that of 2018, and only reached 35.42% of the year plan (VND 120 billion). All business functions failed to meet the target.
The objective factors such as the instability and the low liquidity had a significant impact on the business result of Rong Viet Securities in 2019. However, frankly speaking, the management of the Company was not up to expectation, untimely, and indecisive, leading to the undesired business result. Based on this result, the management system of Rong Viet Securities, despite being upgraded over the past few years, revealed some flaws that needed to be improved, modified, and completed in order to increase the effectiveness in the upcoming period.
In the end of March 2020, Vietnam and the World was facing the Covid-19 epidemic that the World has never been aware of. All economies, regardless of the size of nations, were locked down and quarantined to ensure the health and wellbeing of the people. Giving the fact that the World economy is an inter-link logistic system that depends on one another, the Covid-19 epidemic was a critical strike that greatly affected this system, creating a real crisis for the World economy. The Vietnam stock market was no exception when it suffered heavy losses as the number of infected cases kept rising across the country as well as around the World.
With the less than expected results in 2018-2019 and the difficult situation of the economy and the stock market due to the epidemic, Rong Viet Securities’ business in 2020 is expected to be challenged in many ways. As a result, the BOD and all staffs of Rong Viet Securities must find new approaches in response to the new situation in short term and new strategic directions in long term. The epidemic and other short term factors will pass, but the competition will increase. The demand for higher quality and more sophisticated products and services, professionalism as well as the stricter framework from the Authority will put a pressure on Rong Viet Securities to find a solution in order to sustain and grow in the long term.
In many years of operation, the BOD of Rong Viet Securities is confident that with the pride, mental strength of a Vietnamese securities company, with the deep knowledge of the market and a wide network with other companies that has been built over the years, the Company will overcome all difficulties it might face.
Despite the fact that the Vietnam stock market has been going through a difficult time, we firmly believe that there are always opportunities in difficult situations. This event has created a chance for Rong Viet securities to restructure and become lighter and more effective. The decrease on the stock market may reveal good investment opportunities when the stock price of good companies has come down to attractive levels that can yield good returns in the future. We believe that the intrinsic value of Rong Viet and the fighting spirit of the Vietnamese will overcome any obstacle ahead.
On behalf of the Board of Directors, the Board of Management, and all of Rong Viet’s staffs, I would like to express the deepest gratitude to our Shareholders, Clients, Partners, and the Authority who has been by our side, supporting and helping us over the time.
May us will go through this difficult time of Covid-19 together.
Thank you & best regards,
Nguyen Mien Tuan