SSI Securities (HOSE: SSI) | Initiation Report, BUY - 3Y Upside +56.3%

Company Overview

SSI Securities Corporation (SSI), formerly known as Saigon Securities Inc., was established in 1999 by Mr. Nguyen Duy Hung. SSI listed on the HNX exchange in 2006 before transitioning to the list on HOSE in 2007. SSI offers a full scope of services including securities brokerage, financial and investment advisory, securities trading, and underwriting. The company operates a wide branch network in major cities across Vietnam. SSI is currently the largest securities firm by market capitalization on Vietnam's stock market. In 2024, it held the second-largest brokerage market share on HOSE, commanding 9.18%. 

Financial Performance

During the 2019–2023 period, SSI recorded impressive growth with operating revenue grew at a compound annual growth rate (CAGR) of 22.0% and NPAT grew at CAGR of 26.1%. Of which, gains from Fair Value Through Profit or Loss (FVTPL) financial assets made a significant contribution to SSI’s NPAT. First 9M2024, SSI’s revenue amounted to VND 6,308bn, up 23.4% yoy, with key revenue contributions including proprietary trading, brokerage and margin lending, each showing strong growth. Pre-tax profit arrived at VND 2,989bn, jumped 35.6% yoy, helping the company fulfill 77.8% of its full-year revenue target and 88.0% of its pre-tax profit target.

Key Investment Rationales

We are convinced by both the Brokerage sector outlook and SSI’s prospects:

o   Increased local investors' participation

o   Rise of local institutional investors

o   New products to boost liquidity

o   Vietnam's path to emerging market status

o   SSI - Reasonable earnings growth in the coming 3 years ensures a decent upside for the stock.

Valuation and Recommendation

Based on valuation using the DCF, P/B, and P/E methods, SBBS recommends a BUY for SSI with a 12-month target price of VND 28,500/share, a potential upside of 15.9% from the current price of VND 24,550/share as of January 07, 2025 and a 3-year target price of VND 38,400/share, a 3-years share upside of 56.3% and IRR 20.3%.