Macro Economy

1
Favorable Economic Conditions
Vietnam’s Real GDP Growth is Expected to Continue Stable Economic Growth Policy Favored by the
Outstripping Global Growth Levels Government
8% 6.60% 25,493
24,751
7% 24,030

6% 23,170 23,330
4.09% 22,557 22,659
22,148 3.80% 3.80%
5% 3.50%
21,297 3.52% 3.10% 3.30%
21,058 2.67%
4%

3%

2% 0.63%
2014 2015 2016 2017 2018 2019 2020F 2021F 2022F 2023F 2024F

China, People's Republic of Vietnam ASEAN-5 World 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F

Source: IMF WEO Database, June 2019 Inflation USD/VND

Source: IMF

Investments into Vietnam is Expected to Increase

Strong Growth Momentum Driven by Rising FDI Thanks to Improving Business Environment
in USD bn 32.4%
31.0%
29.7%
35.9 35.5 27.6% 27.8% 28.6%
26.7% 26.8% 26.6% 26.6%

24.4
21.6 21.9 22.8 22.94 16.9% 15.9%
19.1 13.9% 13.9%
16.3 17.5 13.1% 13.1% 12.7%
14.5 15.8 11.0%
9.8% 10.7%
11.5 12.5
10.5 9.85

2012 2013 2014 2015 2016 2017 2018 7M2019 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F

Registered FDI Disbursed FDI Investment/GDP Export growth (by volume)

Source: Foreign Investment Agency (FIA)
Favorable Capital Market in 1Q2019

VN Index Market Cap

980.76 USD 191 bn
YE 2018 892.54 +9.88% YE 2018 USD 170.8 bn +11.8%

Number of Listed Companies Total Trading Value

1,579 USD 11.6 bn
YE 2018 1,553 +26 1Q2018 USD 23.3 bn -50.2%

Outstanding Corporate Bonds/GDP

8.5%
Avg. Asia 22% -13.5%

Source: Stoxplus, SSC, VEPR 1Q2019 Report

Competitive Landscape in the Market
VN-Index Has Seen an Increasing Trend Leading Securities Firms in Brokerage Market on HSX in 1Q2019
Stocks and Fund Stocks Bonds
1,400
BVSC
PSI 1.79%
2.89%
1,200 VCBS
5.22%
SSI
1,000 14.54%

Others
800 34.77% HSC
10.82%
600
VCSC
400 10.05%

200 KIS VNDS

3.11% 7.75% TCBS
VPS 88.59%
0 3.14% MBS
ACBS
Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 SHS BVSC 5.36%
3.18%
3.61% 3.67%

Source: Vietstock Source: HSX

SOE Divestment Plan Dynamic Foreign Investment Into Vietnam

181
Number of companies Stock Market in USD bn Bond Market
19%
16.13% 16% 5
135 11 16.38%
14%
13.68% 10 3
14.80% 3
13.76% 7
6 2 2
2 2.48% 2.68%
62
52 4 4 1.14%
3 3 2.24% 2.07%
28
0.17%
13
0 0 2015 2016 2017 2018 2016 2017 2018

Purchases Sales Purchases Sales

2017 2018 2019 2020
% Purchases % Sales % Purchases % Sales
Planned Actual
(*) 2018 actual data is as at 5/2019. Source: HNX & HSX
Brokerage Market
Margin Lending is On the Rise Growth of Derivatives and Product Breadth
▪ Index futures have only been trading for 18 months but have
▪ Borrowings and owner’s equity are used for margin lending
clearly provided a boost to brokerage fee income at the larger
23.2 180% securities houses.
19.6 150%
15.0
▪ Brokers with the ability to leverage these products are better
120%
14.4 positioned to drive revenues and market share.
11.9 11.4 90%
8.4 Chart Monthly Futures Volume
6.4 60%
5.5 4.2
3.9
30%
0%
SSI HCM SHS VND VCI MBS ACBS FTS BSI VCBS BVSC
Domestic Brokerage Accounts are Poised to Expand
Margin lending balance Margin lending balance / Owner's equity
Margin lending balance / Total assets
2.2 The number of trading accounts rose by 260,000 to reach
Source: FiinPro million nearly 2.2 million as of the end of 2018, of which 2.14
million accounts or 98.2 percent were individual
Vietnamese investors
Average Interest Rate on Margin Lending in 2018
in USD thousand 28,300 The number of foreign investor accounts at the end of
250 21% 2018 was nearly 28,300 – up 5,733 from the previous year
18%
17% 17%
14%
12% 12%
13% ▪ The removal of the 15bp floor on brokerage commissions is a form
134 11% of deregulation that was not particularly welcome among most
114 105
92 81 7% Vietnamese brokerage shareholders. This has raised concerns among
77 76
62 58 investors that fees will inexorably and substantially compress
30 22 toward zero.
19 19 13 16 9
7 7 5

SSI HSC VCSC VNDS MBS BVSC SHS ACBS VPBS KIS 18.70%
11.24% 10.95%
Margin lending revenue Margin lending balance
7.31%
5.63%
Average interest rate on margin lending 4.02% 3.46% 3.34% 2.99% 2.83%
Sources: Companies’ Financial Statements

SSI HSC VCSC VND MBS SHS ACBS FPTS BVSC BSI
Principal Investment
Proprietary Trading Revenue Accounts for a Significant Portion of Total Revenue
USD mn 55.8%
USD mn
42.8%
39.5%
36.0% 38.6%

20.8%
17.2% 17.8%
67.5 17.7%

39.8 9.3 7.3%

24.0
16.7 13.4 8.0 2.3 2.1 0.8
SSI HCM VND TCBS VCI MBS
Mirae Asset KIS Shinhan KBSV
Proprietary Trading Proprietary Trading Revenue/Total Revenue

Proprietary Trading in Total Equity

USD mn
USD mn
2.3 1.3
670.9 300 .0 1.5

700 .0

1.7
2.5

250 .0
252.2 0.7 0.8
2.0
1.0
600 .0

0.7 0.6 0.6 197.7

0.3
1.5

392.9 0.3
200 .0
500 .0

1.0
0.5

400 .0

290.8 0.5
150 .0

300 .0
-

84.6 -

128.1 156.4 133.3 (0 .5)

100 .0

57.9
200 .0

131.4 42.0 29.2 36.0

105.7 82.1 62.7 (1 .0)

22.6 (0 .5)

100 .0
40.3 36.6 (1 .5)
50.0

- (2 .0) - (1 .0)

SSI VND VCI TCBS MBS HCM Mirae Asset KBSV Shinhan KIS

Proprietary Trading Account Balance Total Equity

Proprietary Trading Account Balance/Total Equity

Note: Data is based on consolidated financial statements

Sources: Companies’ Financial Statements
Vietnam is Gearing Up for the Upcoming IB Trend through Government Regulations
and FTAs
Total Value of SOEs Equitization and Divestments Number of IPOs and Capital Raising
140,000
in VND bn 92
81

48

32
27
30,000 28,055 17
6,060 3,641
980

2013 2014 2015 2016 2017 1H2018 2013 2014 2015 2016 2017 1H2018

▪ The government has set plan to privatize 72 more companies in the next 2 years, including big companies such as
PVN, Vinafood1, Vinachem, Agribank, Vinacomin, and VNPT.

▪ Vietnamese government is planning to privatize 90 more companies in 2019, including 18 from FMCG and 17 from
Construction/Real Estate sector
CAGR of M&A transaction
Total number of M&A deals
value over 2008-2018: 19.8%
over 2008-2018: 4,353

Total M&A deals value over Largest M&A deal size over
2008-2018: USD 48.8 bn 2008-2018: USD 4.9 bn

▪ FMCG & Real Estate witnessed the most successful M&A deals
▪ Japan and Singapore are largest sources of cross-border M&A in terms of volume
▪ Thailand and the US are the largest sources of cross-border M&A in terms of value
SSI Securities Corporation
Company Overview

Listing HSX (2007)

Ticker SSI
Established year 1999
Charter capital VND 5,100.64 bn
Number of employees 1,026 employees at 14 branches/transaction office

Shareholder structure as at 01/04/2019

20% Daiwa Securities Group Inc.

NDH Invest Co Ltd.

9% Saigon San Linh Real Estate Co. Ltd

62% Mr. Nguyen Duy Hung & his brothers

6%
3% Others

• Daiwa Securities Group Inc: strategic investor of SSI since 2008, with Hironori Oka - Managing Director & Asia-Pacific Regional Director of Daiwa
Capital Markets Hong Kong Ltd, also being a Board Member of SSI. SSIAM and Daiwa SMBC Capital signed a business alliance agreement to establish
and co-manage DSCAP-SSIAM since 2009

• NDH Invest Co Ltd: CEO of the company is Mr. Nguyen Duy Hung, who is also Board Chairman & CEO of SSI. Together with his own shares and those
of his brothers, Mr. Nguyen Duy Hung owns 12.23% of SSI.

• Saigon San Linh Real Estate Co Ltd: Members' Council Chairman of the company is Mr. Nguyen Hong Nam, who is also SSI’s Deputy General Manager.
Financial Overview
in VND bn
3,939 as of FY 2018

3,043 2%
5%
2,541

19% Securities Services

1,803
1,565 1,500 47% Principal Investment
1,303
1,161 Treasury
840 945
745 SSI AM
418
27% IB and Others

2014 2015 2016 2017 2018 6M2019

Revenue Net Profit

Debt Schedule as at 31/12/2018 Prudential Requirements

Interest rate per
in VND bn annum Balance
▪ As per 87/2017/TT-BTC, liquid capital ratio of
Bank overdraft 0.8 - 7%
securities firms ≥ 180%.
Short-term borrowings from banks 1.75 - 8.5% 1000%
Vietcombank 2,700
Bank Sinopac (Hong Kong) (*)
140
CTBC Bank - HCM Branch 611%
115
Techcombank 509%
3,200
SeA Bank 300 326%
Agribank 350
PG Bank 450 180%
Huong Viet Real Estate JSC (**)
210 0%
(*) Loan from Bank Sinopac (Hong Kong): revolving credit with term of 3 months, was rolled
2016 2017 2018
forward with the newest interest rate of 4.58963%. The foreign exchange risk is hedged by a
foreign currency forward contract with BIDV.
SSI's LCR Required LCR
(**) The company's borrowing from OCB was transferred ownership to Huong Viet Real Estate
JSC.
Securities Services
Revenue Breakdown Strengths
88.08 17.83%
in USD mn
15.60%

13.22%
64.29 12.31%
49.55 11.15%

42.82
34.77 2014 2015 2016 2017 2018

17.20 28.60
▪ High and growing market shares
31.14 12.38 o Low market share at HNX because institutional investors -
19.38 23.17
SSI’s major customers are not highly interested in volatile
14.56
5.81 5.77 6.68 stocks on HNX
1.09
2016 2017 2018 6M2019
▪ Many institutional and foreign customers

▪ Capable of arranging orders of large value

Stock depository Advisory Margin lending Brokerage Total brokerage

▪ Margin lending:
Trading value increasing on HSX and decreasing
o Highest and increasing margin lending balance among the
on HNX top-4 securities firms
in VND bn 169,201 o Most conservative lending/equity ratio of 0.64 in 2018, much
153,868 lower than cap ratio 2.00
126,949
in USD thousand
100,940 251.00 256.65

82,417
63,003 161.00

18,360 0.7 0.64

12,928 14,301
0.5

2016 2017 2018 2016 2017 2018

SSI Margin lending balance SSI Margin lending/equity ratio
HSX HNX Account growth
Source: Company’s Corporate Presentation, Financial Statements, State Securities
Commission of Vietnam
Principal Investment
Safe Investment Strategy
▪ As a result of unpredictable market, SSI has been increasing investments in associates, bonds and deposits, and decreasing investments in
stocks.

682,773 150,545
142,741
in USD thousand 135,717
502,035 9,129
524 26,058

371,835
123,134
126,451
101,896

236,118 351,490 540,032

135,717 150,545 142,741 6,880 16,211 10,912

2016 2017 2018 2016 2017 2018

Stocks & bonds Deposits Stock revaluation Stock sales

Bond sales Derivatives sales
Dividend & interest income

Charter capital Ownership interest Ownership interest Ownership interest

Ticker Company name Sector (VND mn) 2014 2015-2017 2018
1 PAN The Pan Group JSC Agriculture 1,176,936 20.11% 20.02% 19.93%
2 PDN Dong Nai Port JSC Seaport operations 123,480 20.01% 20.00% -

3 VFG Viet Nam Fumigation JSC Agricultural materials 237,682 20.06% 20.00% -
4 GIL Gilimex Co Textile 139,246 20.15% -

5 SSC Southern Seed JSC Agricultural materials 149,924 20.13% -

6 LAF LAFOOCO Agricultural trading 147,280 20.02% -
7 ELC Elcom Corp Telecommunications 379,399 20.01% -
8 TMS Transimex Corp Logistics 230,738 20.00% -
9 BBC Bibica Corp Confectionary 15,421 20.00% -
Principal Investment
SSI AM - unique competitive advantage of SSI SSI AM’s Revenue
▪ Most SSI’s investments have been transferred to SSIAM,
enabling specialization of investment capabilities.
SSI Asset Management Co Ltd (SSIAM)
in VND bn 1060.8 1092.9
933.98
861.98
735.39
Open-ended funds Member funds ETF fund

Private equity
Equity investment fund
investment fund ETF SSIAM VNX50
SSI-SCA
DAIWA-SSIAM II

Special investment fund

Investment member fund 2014 2015 2016 2017 2018
SSIAM SIF – Vietnam Active
SSI IMF
Value Portfolio
Asset Management
Equity investment fund
SSIAM UCITS - Vietnam Value
Income & Growth Fund 7%
Fund Management
Bond investment fund 25% Total AUM of
SSIBF Institutional Managed
VND 5,573 bn
Account

▪ Thanks to SSI's 100% ownership in SSIAM, SSI is not restricted by 68% Private Wealth
Management
investment regulations, capable of turning strategic investments into
their own associates.
o SSI does not have to make provisions as a result of the reduction
in stock prices; SSI only records Original Price in Separate ▪ Further diversification of investment product distribution
Financial Statements and Owner's Equity in Consolidated channels
Financial Statements.
▪ Successful deployment of SSIAM On The Go (SSIAM OTG)
trading platform
o SSI has stable financial income under the forms of net income
from associates, dividend payments and sales of investments,
▪ Total asset under management was VND 5,573 billion at the
without subjection to fluctuations in stock prices.
end of 2018
Investment Banking
Services Revenue Breakdown
• Equitization/IPO in USD thousand 5,586
4,966
4,811 101
• Listing advisory 311
507
• Capital raising services (ECM/DCM)
5,485
4,304 4,655
• Financial restructuring

• M&A

• Business valuation 2016 2017 2018

Corporate finance Underwriting & agency
Total investment banking

Major Deals

Deal size: USD 94 mn Deal size: USD 1.35 bn Deal size: USD 35 mn Deal size: USD 742 mn
Private placement & listing Secondary offering & listing Private placement IPO

Deal size: USD 120 mn Deal size: USD 48 mn Deal size: USD 300 mn Deal size: USD 400 mn
Private offering Treasury offering Share offering Divestment advisory
Financial Summary
in VND bn 2016 2017 2018 6M2019 in VND bn 2016 2017 2018 6M2019

Operating Current assets 12,664 17,228 22,270 25,347

Income 2,446 2,898 3,673 1,480
Operating In which: Financial
Expenses 989 1,137 1,651 508 assets 12,565 17,092 22,238 25,294

Financial Income
95 145 266 19 Non-current assets 1,343 1,536 1,555 1,894
Financial
Expenses 269 345 547 382
Total Assets 14,007 18,764 23,826 27,241
General &
Administrative
141 168 174 193
Expenses Current liabilities 5,842 9,354 13,469 16,534
Operating Profit
1,144 1,405 1,623 507 In which: ST debt 4,819 8,504 8,504 11,193
Other Operating
Profit 3 13 56 3 Non-current
liabilities 258 794 1,201 1,219
Profit Before Tax
1,144 1,405 1,623 510 Total Liabilities 6,100 10,148 14,670 17,753
Profit After Tax
945 1,161 1,303 418 Owner's Equity 7,907 8,616 9,156 9,488
Viet Capital Securities Corporation
Company Overview Shareholder structure as at 31/12/2018

Listing HSX (2017)

Ticker VCI 19%
To Hai

Established year 2007

Truong Ngoc Phuong
Charter capital VND 1,630 bn 8%
KIMC
Number of 245 employees at 5 branches/transaction
employees office 7% Others
66%

Principal Investment Principal Investment

80.0%
71.5%
SSI Asset Management Co Ltd (SSIAM) 490
59.9%

22.5% 313
Viet Capital Balanced Viet Capital
Viet Capital Fund 272
Fund Healthcare Fund

159
130
-36.1%

2014 2015 2016 2017 2018

Revenues growth
Financial Overview
in VND bn

1,821 as of FY 2018 2%

1,537
17%
24%

Investment
867 823 Banking
706 Investment
617 655
Brokerage
333
237 Interest Income
145

2014 2015 2016 2017 2018 57%

Revenue Net Income

Debt Schedule as at 31/12/2018 ROE & ROA

Interest rate
32.7%
in VND bn per annum Balance 30.5%
30.3%
Short-term borrowings from banks 4.25 - 11%
Domestic bank 200 26.7%
24.7%
Domestic bank 46
Domestic financial company 130
Domestic bank 100 14.8%
12.9% 12.7%
Foreign bank 117 9.7%
Foreign bank 92
5.2%
Domestic bank 100
Domestic bank 100
Domestic bank 100 2014 2015 2016 2017 2018
Issued bonds 1,335
ROE ROA
Investment Banking
Services Revenue Breakdown
• M&A consultancy in VND bn 262.7

• Guarantee issuance & listing (IPO)

• Capital mobilizing consultancy

• Stock/Bond issuing (ECM/DCM)

• Business restructuring 89.9

70.2

28.3 33.1

2014 2015 2016 2017 2018

Major Deals

Deal size: USD 922 mn Deal size: USD 200 mn Deal size: USD 500 mn Deal size: USD 63.5 mn
Shares offering Listing Upcom registration Listing

Deal size: USD 779 mn Deal size: USD 68 mn Deal size: USD 73 mn Deal size: USD 342 mn
M&A/Transaction Listing Equitization plan advisory Equitization plan advisory
Institutional Sales and Brokerage Services
Revenue Breakdown Strengths
1,487 31%
in VND bn 28%
25%
443 23%
17%
11%
8% 9% 9%
780 1,017 7%

525 267
369 2014 2015 2016 2017 2018
160 498
355 150 Foreign market share on HSX Overall market share on HSX

209

2016 2017 2018 6M2019

Brokerage Margin lending Stock depository Advisory Total brokerage VCSC provides a full suite of brokerage services to local
39,600 individual clients and currently has approximately 39,600
active accounts (as of December 31, 2018), up over 30%
Margin Lending YoY

in USD thousand
No.1 foreign institutional broker as ranked by market
147.84 28% share of trading on HSX (28% in 2018)
116.44
1.2
1.1
60.00
0.7 ▪ Institutional sales and brokerage accounted for 50% of VCSC’s
total brokerage revenue in 2018

2016 2017 2018 ▪ Prudent gearing policies: debt to equity ratio was 0.79x as of
VCI Margin lending balance VCI Margin lending/equity ratio YE2018 (compared to 1.12x in 2017), significantly lower than the
regulatory limit of 3x.

Source: Company’s Annual Report,

Financial Summary
in VND bn 2016 2017 2018 6M2019 in VND bn 2016 2017 2018 6M2019

Operating Income 867 1,537 1,821 773 Current assets 2,917 6,343 6,430 6,115

In which:
Operating Expenses 252 443 482 263 Financial 2,911 6,224 6,428 6,070
assets
Financial Income Non-current
4 6 8 6 113 59 80 72
assets

Financial Expenses 133 179 251 69 Total Assets 3,030 6 7 6,187

General & Admin. Current

75 129 94 27 1,830 3,240 2,753 2,643
Expenses liabilities

Operating Profit 411 792 1,003 420 In which: ST

628 1,434 985 1,027
debt
Other Operating Non-current
11 - 142 114 46
Profit 0 8 0 liabilities

Total
Profit Before Tax 411 803 1,011 420 1,830 3,383 2,867 2,689
Liabilities

Owner's
Profit After Tax 333 655 823 342 1,200 3,019 3,643 3,498
Equity