Dear Shareholders, Clients, and members of the Rong Viet Securities,
The year 2018 was the one with lots of ups and downs for the Vietnam economy as well as the stock market. At the end of Q1/2018, the Vietnam economy achieved the GDP growth rate of 7.4%, the highest in 10 years, and the Vietnam stock market witnessed a strong rally that even broke the record of 1,174 points which was set 11 years ago.
As for Rong Viet, the previous year (2017) recorded impressive results with the EBIT reaching VND 138 billion (up by 125% YoY), setting a good start for 2018. By the end of the 1st quarter of 2018, Rong Viet made an EBIT of VND 61.7 billion, equivalent to 34.33% of the year target (VND 180 billion).
However, due to the effects from the trade war between the US and China as well as the concern about the 10-year-cycle of the world economy has upset the expectations for growth in 2018 of the Vietnam stock market in general and that of Rong Viet in specific. In the 3rd quarter of 2018, the Vietnam stock market experienced a drop of 26.8% from the peak of 1,204.3 points on April 09, 2018 and fell to 880.85 points in October 2018, making Vietnam go from the top 10 highest growth markets to the second worst performer around the World by the end of the year.
The year 2018 ended with the economic growth and the Vietnam stock market going opposite ways. The Vietnam GDP growth rate reached 7.07% (highest in 10 years) while the VNINDEX closed at 892.54 points (down by 9.32% compared to that of 2017).
In such an unstable environment, Rong Viet’s business also faced many challenges. At the end of 2018, Rong Viet’s revenue reached VND 434 billion (equivalent to 92.57% of the year target); however, the expenses reached VND 349 billion (120% of the year plan) in which the investment provision accounted for VND 65 billion. This led to the PAT of VND 85.1 billion (47% of the year plan). This undesirable result also made the benefit to shareholders, which was one of the key goals, become less than expected.
On the bright side, all other businesses of Rong Viet were on track. One of the highlights was the successful issuance of 10% stock dividends, increasing the Charter Capital to VND 1,000 billion. Rong Viet became the 10th company participated in the Derivatives market, and the Company managed to pay another 5% cash dividends to shareholders. Both shareholders and staffs also gained more experience and knowledge, and the Company was able to bring on board many high-quality staffs fitted well with the corporate culture. In addition, Rong Viet’s contribution to the development of the Vietnam stock market was highly recognized by the Authority through a number of awards and prizes from the Ministry of Finance, the Stock Exchange, and the Vietnam Securities Depository Center.
The year 2019 is going toward the end of the 1st quarter. When this message is being written, the World economy, as well as the Vietnam macro environment, has been facing many challenges and unexpected factors. The ongoing trade war between the US and China, the tension between the US and North Korea after the Summit in Hanoi remained as many issues were left unsolved, and the fear of another economic recession have cast a cloud over the direction of the World and the Vietnam securities markets.
Thanks to the lessons from the past and the new events in 2018, in 2019, Rong Viet will take a caution approach in its business and focus on risk management with the priority to protect the capital. The Company will also improve its working environment for its staff to build up internal strength and focus on finding business opportunities to bring the highest benefits to shareholders, thus continue to contribute to the development of the Vietnam securities market and the society. With that mindset, we choose the concept of the chessboard to demonstrate the cautiousness, discretion in every move and every activity of the Company but still be flexible and capable of seizing the opportunity to make breakthroughs in 2019 and the period of 2019-2020.
Versatility and sudden change in short-term are the nature of the stock market; however, the factors Human Resource – Finance – Service System are the crucial key to help Rong Viet survive and grow. Operating in this business, every member of Rong Viet needs to the ability to be adaptive and able to stay focus on targets and long-term goals. The Company always needs to strengthen its financial capability as well as invest in high quality researches in order to provide products and services that are suitable for investors so that it can improve its competitiveness while maintaining the highest level of compliance and risk management.
Rong Viet has been through tough time in the past; however, thanks to the tireless efforts of its members, nowadays the Company stands with highly effective operations; strong financial capability; substantial charter capital that can support all financial products on the market; sufficient and various high quality products / services; and an experienced workforce with professional mindset. These precious assets enable Rong Viet to confidently advance into the new period.
On behalf of the Board of Directors, the Board of Management, and all of Rong Viet’s staffs, I would like to express my greatest gratitude to Shareholders, Clients, Partners, and Government Bodies who have always trusted, supported, and stood by us throughout all those years so that Rong Viet could grow and develop to where it is today. The path ahead of our country’s economy, the Vietnam stock market is full of opportunities and challenges that are waiting to be conquered. With your support and the effort of all Rong Viet’s members, I have great confidence that Rong Viet will grow and develop much further.
Tran Le Nguyen