SBI Financial Services Co., Ltd – a Japanese investor – has recently registered to purchase 1 million shares of FPT Securities Joint Stock Company (FPTS – code FTS) from March 16 to April 14 through order-matching method.
At the current market price of FTS shares, the major shareholder from Japan would have to spend approximately VND 19 billion to complete the deal.
Japanese shareholders currently hold almost 47.56 million FTS shares, equivalent to a 24.39% ownership rate. If the transaction is successful, SBI will increase its holdings to over 48.56 million shares, equivalent to a 24.9% increase in ownership rate.
On March 13, the FTS stock price closed at 19,200 dong/share, a 45% increase from the bottom four months ago. Hence, SBI would have to spend around VND 19 billion at this market price to complete the purchase.
SBI has been actively collecting FPTS shares to increase its ownership in the company, as seen in its purchase of 1.7 million FTS shares by Japanese shareholders on January 5, 2023. In 2022, SBI acquired FTS shares four times, with a total volume of over 6.8 million shares.
According to Sophie Dao, Senior Partner at GBS – Global Business Services LLC – The foreign investors may prefer to acquire Vietnamese local businesses as Vietnam has been one of the fastest-growing economies in Southeast Asia, with a GDP growth rate averaging around 6% per year over the past decade.
“The country has made significant strides in improving its business environment in recent years, making it easier for foreign investors to do business in the country. The government has implemented a range of reforms to simplify administrative procedures, reduce bureaucratic red tape, and improve access to financing”, Sophie added.
In terms of business performance in 2022, FPTS’s operating revenue decreased by 39% to VND 850 billion, and profit after tax decreased by 62% to VND 319 billion. In 2023, FPTS is cautious about its target of pre-tax profit, which is set to decrease by 6% compared to the previous year to 680 billion dong. However, the company only achieved 65% of its profit target.
According to the Board of Directors, FPTS could not achieve its revenue and profit plan due to unfavorable market movements in the second half of 2022, causing brokerage revenue to decrease in response to plummeting market liquidity.
As of December 31, 2022, FPTS’s total assets were VND 5,288 billion, down 44% from the beginning of the year. Margin loan balance at the end of the year was only VND 3,461 billion, nearly VND 900 billion lower than the end of the third quarter of 2022.
In 2023, FPTS has set a target of VND 770 billion for total operating revenue and financial revenue, a 26.5% decrease compared to 2022. Its pre-tax profit target decreased by 34% compared to the previous year, down to VND 420 billion.
FPTS plans to submit a proposal to issue 19.5 million shares with a 10:1 issue ratio to shareholders for approval. The estimated implementation time is in the second quarter of 2023. After the issuance, FPTS will increase its capital to over 2,100 billion dong. Furthermore, the company intends to pay a cash dividend at a rate of 5%. With 195 million outstanding shares, it is expected that FPTS will spend VND 97 billion to pay dividends.