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INTERNSHIP REPORT Major Advanced Finance TOPIC THE CURRENT FINANCIAL STATUS OF VIETNAM INVESTMENT AND DEVELOPMENT JOINT STOCK COMPANY BSC Table of Contents I INTRODUCTION 3 1 Company’s background 3 a.
INTERNSHIP REPORT Major: Advanced Finance TOPIC THE CURRENT FINANCIAL STATUS OF VIETNAM INVESTMENT AND DEVELOPMENT JOINT STOCK COMPANY-BSC Table of Contents Outline Internship Report Internship place: BIDV Securities Corporation INTRODUCTION: I Company’s background: a Organization chart b Mission and Vision - Realizing that the quality of products and services provided to customers is a vital factor for the existence and development of each business, from the very beginning, BSC has directed all its efforts to improving improve and improve the - quantity and quality of services to maximize the benefits of customers Contribute to the development of the stock market, benefiting customers, - investors, and shareholders of the Company Restructure the customer base towards sustainable and safe development, maintain and gradually improve the ranking in the TOP of securities companies, become an Investment Bank - As a companion to customers, direct all efforts to improve and improve the quantity and quality of services to maximize the benefits of customers Based on planning quality management objectives, planning quality management systems, BSC develops and implements resource management policies, plans, and checks the process of creating products and services according to the PDCA model, manages all documents and processes in the quality management system, periodically collect opinions of customers and partners to measure, analyze, improve, and overcome problems to improve products and services Company’s development history Vietnam Bank for Investment and Development Securities Company (BSC) was established on 18/11/1999, is one of the leading prestigious securities companies in Vietnam, specializing in providing financial services and investment products to institutional and individual investors, domestic and foreign funds, and - investment banks As a member unit of BIDV, BSC inherits the cultural background, customers, knowledge, and experience of the Parent Bank First, the company inherits the broad relationship in financial markets BSC focuses on building strategic relationships with market members and governing bodies with service quality and business reputation Moreover, BSC converges a team of experienced personnel in the field of finance, banking, understanding the sectors of the - national economy On November 17, 2010, the Company successfully made an initial public offering This is a great turning point marking the maturity of the Company and also opens a challenging journey for the entire Board of Directors as well as employees when the Company transforms its business model from a one- - member State Limited Liability Company to a joint stock company Regarding brokerage services, with the principle that investor profit is a long-term development benefit, BSC offers full consulting services, comprehensive support for the investment process, creating its own value with commitments to service quality, taking customer satisfaction as a guideline for action BSC's service network is developed through cooperation with BIDV, prestigious domestic and - foreign institutions such as Japan, Singapore, Hong Kong, Cambodia After more than 20 years of establishment and development, BSC has affirmed its position in the TOP 10 securities companies with the largest market share of stock brokerage, fund certificates and warrants at Hose and UPCOM; TOP securities companies with the largest share of government bond brokerage on HNX, TOP 10 securities companies with the largest brokerage market share on the derivatives market; has continuously received awards and ratings from prestigious domestic and international organizations in all fields of operation such as "Best Securities Company with Investment Banking Services in Vietnam 2020", "Best Securities Broker in Vietnam 2019" by Global Banking and Finance Review – a leading prestigious financial magazine Top of the UK awarded, Top Vietnam Securities Companies 2019 awarded by Asia Money, Top Market Maker of Government debt instruments in 2019 awarded by the Ministry of Finance, and many other prestigious awards Company’s utility products - MARGIN transaction: Is a loan transaction applied by BSC Clients can use BSC's financial resources to invest in securities and pledge with the investment securities - themselves and/or securities available in the account Mortgage lending: Transactions exploit the financial resources of the Parent Bank for BSC to optimally support customers Customers enjoy preferential interest rate - policies with the fastest and most convenient procedures Portfolio management: With an in-depth analytical reporting system, modern account management technology and extensive experience in the field of securities trading, BSC's consulting team gives clients peace of mind through the ability to identify each client's preferences and risk-taking tastes for timely advice, help customers seize - investment opportunities as well as reasonable withdrawal plans Smart savings: The product allows through an online connection system with the parent bank Customers can operate on BSC's online transaction method to save at desired terms with competitive interest rates, flexibility when there is no need to trade securities and use money on savings accounts to create purchasing power for - investments Equitization and listing consultancy: Connecting buyers and sellers creates motivation for development A combination of comprehensive consulting processes and plans with the position of consulting for the seller-side enterprise or the buyer investor Merger Consulting seeks strategic cooperation opportunities with partners in the same industry M&A Consultants make equity arrangements with dominant volumes to change acquisitions and change dominant owners of the - business Capital arrangement consulting: Connect businesses with appropriate capital One of the core services, deployed by BSC under a variety of diverse and flexible capital raising tools Each instrument is a combination of conditions, trade terms that determine the trading structure and the Action Program for the successful - implementation of the capital arrangement process for the client Restructuring consultancy: Increase operational efficiency Consulting services build and support the implementation of a system of solutions & options to help corporate customers transition to a more optimal state and ensure that the capital is arranged is the most suitable, with optimal cost of capital in the context of the market as well as the current situation of the business BSC’s main products and services a Equitization consultation and listing - Transforming operating models and expanding capital raising opportunities Hinge products, creating the BSC brand with customers who are state-owned enterprises and enterprises of other types of activities to fundamentally change the ownership structure to raise capital, comprehensively change new ways of managing - and operating the business in new directions b M&A consulting Connecting buyers and sellers creates a driving force for development Combination of processes and comprehensive consulting options with consulting position for sellers or investors buyer Merger Consultant (Merger) does the search strategic cooperation opportunities with partners in the same career Consulting on buying and selling and arranging stock capital the part with the dominant volume to - exchange for repurchase and change the dominant owner of the business c Capital association consulting Connecting businesses with the right capital One of the core services, deployed by BSC under diversified and flexible capital mobilization tools Every Instrument is a combination of terms and conditions of a trade determines the transaction structure and the operating program to successfully implement the capital arrangement - process for customers d Reconstruction consultancy Increase operational efficiency Consulting services to build and support system implementation solutions & plans to help business customers industry transitions to a more optimal state and ensures that the arranged capital is the most appropriate, with the cost optimal cost of capital in the market context as well as status of the business II Company’s financial analysis Assets and capital a Assets - According to BSC's published 2021 balance sheet, the company's total assets reached VND 6,004.73 billion, an increase of 105% compared to 2020 In which, the company's loans accounted for most of these assets (more than 50%), reaching VND 3,303 billion; followed by financial assets recorded through profit - and loss (FVTPL), reaching VND 1,043 billion by the end of 2021 This spike was recorded due to the explosion of the stock market in 2021 with a record number of new account openings, helping the company increase profits in margin lending and debt collection for customers b Capital - Since its inception, the amount of BSC's charter capital has been constantly increasing By 2019, BSC's charter capital reached over VND 1,220 billion The total number of securities accounts opened at BSC increased from 61,879 accounts in 2011 to 126,292 accounts in 2019 The total value of bond transactions of customers via BSC from 2011 to 31/10/2019 is VND 382,100 billion - On 03/08/2022, Vietnam Bank for Investment and Development Securities Company (BSC) had announced the signing of a strategic cooperation agreement with Hana Securities Company Limited (HSC) – under Hana Financial Group – Korea Under this agreement, BSC issued and privately offered 65,730,042 shares to HSC, at a price of 41,000 VND/share The value of this deal reached VND 2,695 billion, bringing BSC's charter capital up to VND 4,384 billion Transfer restriction period within years from the closing date of the - offering In addition to its strong digital transformation strategy, HSC said it will join BSC in asset management activities and support the establishment of a continuous cooperation system in investment through the establishment of a fund management company, support risk management c Efficiency of using funds - After a slight decrease in profit margin in 2019 and 2020, return on average equity (ROEA) has increased sharply in 2021 to more than 22% This is a record number of the company since its inception, making BSC one of the top but most - effective capital-intensive securities companies in the market BSC expects 80% of the proceeds from the offering to supplement the company's securities businesses including margin lending, securities investment, underwriting and other securities trading operations The remaining 20% of the funds will be supplemented with funds for investment in upgrading the trading platform and other legitimate business activities of the company The company’s business performance in 2021 and 2022: a BSC’s performance in 2021 - According to the financial statements for the of 2021, BSC's net income from financial activities reached more than VND 1,333 billion, 33% increase compared to 2020 This figure was recorded mainly from the sudden growth of securities brokerage revenue to 516.43 billion (up 125% compared to 2020) Along with that, interest from loans and receivables (HTM) of BSC also increased by 115% - to VND 292.94 billion In addition to the impressive results in financial consulting and securities investment consulting activities, BSC's investment activities also recorded a decrease in profit from financial assets recognized through profit/loss (FVTPL) when this figure decreased from 500.23 to 388.32 billion VND (-22.4%) in 2021 b BSC’s performance in 2022 10 - BSC published financial statements for the first months of 2022 with a loss after tax of nearly VND billion, while in the same period profit after tax was more than VND 116 billion According to the company's explanation, the main reason is due to the bad performance of the stock market in the first months of 2022, reduced liquidity, leading to a decrease in operating revenue and financial - revenue Specifically, operating revenue reached VND 255 billion, down 23% over the same period Profit from main assets recorded through profit/loss (FVTPL) decreased by 42%, to more than VND 67 billion; securities brokerage revenue decreased by 30%, to VND 87.65 billion In contrast, operating expenses increased by 31% over the same period, to more than VND 193 billion; financial expenses increased by 173%, particularly management costs decreased by 56% - over the same period At the same time, FVTPL's financial asset loss increased by 58%, corresponding to an increase of VND 44 billion to more than VND 120 billion As a result, the - company's self-employed segment recorded a loss of more than VND 54 billion However, with positive Q1 business results, accumulated in the first months of the year, BSI reported a profit of more than VND 77.3 billion, down 56% over the - same period Operating revenue decreased slightly by 2%, to VND587.5 billion In 2022, BSI plans to reach VND 465 billion in pre-tax profit, an increase of 7% compared to the previous year After months, BSI achieved 20.6% of its fullyear pre-tax profit target 11 - As of 30/06/2022, BSI's total assets decreased slightly by 2% compared to the beginning of the year, to nearly VND 5,889 billion Short-term assets stood at more than VND 5,583 billion, accounting for 99.8% of total assets In which, FVTPL's main assets reached VND 1,355 billion, up 32.4% compared to the beginning of the year, mainly in listed bonds accounting for nearly VND 645 billion (up 66.6%); listed shares with more than VND 310 billion (up 48.6%); certificates of deposit at VND 101.5 billion (down 33%) III Difficulties that the company needs to clear up As a leading securities company in the country, BSC offers many attractive income growth opportunities; However, they also face many problems in organization: Operational risk - This type of risk is commonly seen in securities companies Without good - management, this risk will lead to loss of reputation and assets This risk comes from factors such as staff, company's technology system, and other objective impacts In which, there are some cases such as fraudulent employees, brokers forging customer or company signatures to withdraw money, placing wrong orders, self-trading using the company's money to buy outside securities and sell them to others the company to make a difference, violate or fail to comply with the provisions of the law, the provisions of the company's charter, violate internal regulations, professional processes, regulations, including regulations on professional ethics Management measures: - Process design, operating apparatus can be cross-checked between individuals and departments At the company, business processes and operational apparatus are designed with the aim of having mutual cross-examination to enhance internal inspection and supervision, limit abuse of power and early - detection of possible violations Focus on training, raising employee awareness of compliance Newly hired employees are trained and disseminated on procedures, general regulations and special regulations related to their work During their time at BSC, employees are trained periodically to understand the workflow and improve their sense of compliance Credit risk - Credit risk is the risk that BSC is likely not to collect debts or passengers not fulfill contractual obligations 12 - This risk arises in the process of providing margin services to passengers, the Company has to accept a large loss because it holds an amount of shares at a lower market price than the original price when the customer denies the responsibility to deposit more money into the account While digital trading is a good tool to compete and support the race for market share, good risk management is needed to ensure large losses are avoided Governance measures: - Make a prudent support portfolio based on compliance with the regulations of the state securities commission, and score stocks on liquidity factors, price fluctuations and stock valuation based on reports analyzing the financial situation of the enterprise The list of stocks as collateral is reassessed every month to promptly update the volatility of the stock, and special cases are also evaluated - as soon as the stock appears bad news Develop a cross-border limit system for maximum control: total margin loan limit, maximum limit per customer, maximum limit per share code, safety warning rate, - debt recovery threshold warning rate… Monitor the outstanding debt situation and daily risk ratio to promptly detect risk signs: for example, outstanding debt with high concentration per customer, per share, stocks with abnormal price movements, stocks with abnormal information, stocks with abnormal and questionable trading measures during the - trading session Grading and evaluating customers when using margin trading must meet the criteria according to the principles prescribed by BSC, binding on the responsibility of customer care brokers in warning and recovering loans Payment risk - Payment risk is the fact that the securities company has a short balance of - money or securities on the account to pay for intraday transactions BSC encounters this risk by allowing customers to use high financial measures without placing a heavy emphasis on risk management requirements, so they have to bear losses when customers become insolvent; there are also cases where the company wants to increase profits while financial resources are limited by borrowing bank capital for margin lending, in which case the company's risk will be greater due to the use of financial leverage; or use money and securities in less traded finance to offset temporary transactions, which is extremely risky when customers trade again or withdraw money Governance measures 13 - Maintain a strict cash management process Maintain a reasonable and balanced ratio between assets and liabilities, apply - the basic principle of liquidity risk management is to invest in liquid assets In addition, BSC can also apply credit lines, use derivatives such as repurchase bonds, buy and sell futures, issue valuable papers to mobilize medium and longterm capital IV Business strategy for 2022 - Competitive Strategy The Company focuses on contributing to the development of the stock market, bringing benefits to customers, investors and shareholders of the - Company Restructure the customer base towards sustainable and safe development Maintain and gradually improve the ranking in the top of securities companies - Become an Investment Bank Develop company based on pillars: Quality of human resources, corporate - culture, technology infrastructure Constantly training and fostering skills, knowledge, culture of behavior and professional ethics for existing human resources; at the same time, develop and implement policies to attract high-quality human resources to be ready to meet - the rigorous needs of all customers Upgrading information technology infrastructure, developing and putting into operation a system of advanced application software such as stock valuation, enterprise valuation, fundamental analysis, technical analysis and bookkeeping online orders to promptly and effectively support the decision-making process of investors Continue to improve the information disclosure system in order to - provide complete, timely, accurate, reliable and valuable information to investors Improve service quality by focusing investment resources on services that allow direct access to the target group of customers Promote funding for projects that support increasing investment knowledge for the community through coordination with universities, academies, research institutes to regularly - organize scientific seminars Business plan for 2022 The 4th wave of Covid heavily affected the Vietnamese economy, creeping into every corner of society Never before has the epidemic factor had such a strong impact on the economy and people's lives Despite the difficulties, the stock market in 2021 continues to bloom in the midst of the Covid season Starting from low interest rates in 2020, securities have become an attractive investment 14 channel to attract cash flow The stock market's money-sucking spiral has grown as the epidemic has limited cash flow to traditional investment channels such as personal business, real estate investment and gold VN-Index surpassed 1,200 points after nearly years of waiting and set a record of over million investors opening new accounts - surpassing the total number of accounts of all years ago, and the chain of increases over 18 months as well as the average market liquidity exceeded billion USD These are records that even the most optimistic - people can hardly imagine amid a complex epidemic Macroeconomics in 2022, BSC forecasts GDP growth under scenarios of 6.0% and 6.6% for 2022, and 6.7% and 7.0% in 2023 CPI is a factor to watch, however, still forecast at 4.5% and 3.0% in 2022 and 4.0% and 3.2% in 2023, respectively The two-scenario interest rate holds at 5.5% and 5.2%, then gradually increases to 5.8% and 5.5% in 2023 Stable exchange rate from 23,100 - – 23,300 in the next years About the market in 2022, VN-Index maintained an increase in price, although the divergence was greater due to (1) improved business results of companies; (2) Increased P/E ratio thanks to new cash flow of INVESTORS; and (3) Small and medium-sized stocks are having high valuations, so it is difficult to maintain the momentum as in 2021 VN-Index is forecasted to increase by 9% to 1,633 points under scenario and increase by 19% to 1,782 points under scenario (Refer to the methods of forecasting scores by large, weighted stocks and large - stock technical analysis) About the group of stocks with investment notes on the stock exchange in 2022, (1) Theme of opening the economy: Banking, Consumer and retail, Oil and gas and utilities, other groups (2) Group benefiting from the stimulus package: Raw materials, Construction, Aviation and transport, real estate, Industrial parks, Ports (3) State divestment (4) Large stocks when foreign cash flows invest again Conclusion As one of the leading securities companies in Vietnam, BSC has been and continues to be a great place for customers to place their trust to invest, cooperate and develop BSC always 15 focuses on developing superior products and services, human resources, and technology to serve the needs of customers With a team of experienced professionals working with domestic and international organizations, BSC has successfully performed many consulting transactions for corporate clients, including state-owned enterprises and private enterprises listed and unlisted BSC has a rich network of clients across various industries and business sectors such as construction, real estate, financial services, air transportation, healthcare, minerals, consumer goods , distribution, retail The core values of BSC's success lie in consulting expertise, competence and experience in designing, building and executing highly reliable consulting transactions APPENDIX 16 ... improve and improve the - quantity and quality of services to maximize the benefits of customers Contribute to the development of the stock market, benefiting customers, - investors, and shareholders... with the regulations of the state securities commission, and score stocks on liquidity factors, price fluctuations and stock valuation based on reports analyzing the financial situation of the. .. using the company's money to buy outside securities and sell them to others the company to make a difference, violate or fail to comply with the provisions of the law, the provisions of the company's