Vietcap Securities (HOSE: VCI) | Initiation Report, BUY – 3Y Upside +58.9%

Company Information 

Vietcap Securities Joint Stock Company (Vietcap) was established on November 6, 2007, with an initial charter capital of VND 360bn. Vietcap has been growing gradually and become one of the leading securities companies in Vietnam. In 2017, the company marked a significant milestone by listing on the Ho Chi Minh City Stock Exchange (HSX), under ticker VCI.

VCI has consistently expanded, maintaining its No.1 market share in institutional brokerage and securing the Top 5 position in total brokerage market shares in 2024.

Financial Performance

During the 2019–2024, VCI recorded impressive growth, with a compound annual growth rate (CAGR) of 19.1% in operating revenue. In 2024, VCI’s revenue reached VND 3,696bn, marking a 49.5% increase compared to 2023. The key business segments contributing to revenue—proprietary trading, brokerage, and margin lending—achieved impressive growth rates of 79.3%, 31.0%, and 61.6%, respectively. The 2024 NPAT amounted to VND 911bn, up 85.1% YoY.

As of the end 2024, VCI's total assets stood at VND 26,592bn, representing a CAGR of 29.7% over the 2019–2024 period, primarily driven by loans and financial assets available for sale. Additionally, VCI continuously expanded its capital base over the years, with charter capital increasing from VND 1,644bn in 2019 to VND 7,181bn in 2024.

Investment Rationales

o       Leading position in institutional brokerage

o       VCI shall enjoy the most should Vietnam is reclassified as an Emerging Market this year by FTSE

o       Significant breakthrough in the retail brokerage, with market share on the HOSE exchange increased from 4.47% (top 8) in 2023 to 6.08% (top 5) in 2024

o       Outstanding investment performance

Valuation and Recommendation 

Based on DCF, P/E, and P/B methods, we recommend BUY with a 12M target price of VND 39,100/share, implying a 6.8% upside from VND 36,600 as of February 26, 2025; and a 3Y target price of VND 58,200/share, +58.9% upside.

We believe that the VCI share price may fluctuate in a range between VND 32,000 (based on P/E valuation) and VND 42,000 (based on P/B valuation) in 2025. A relevant trading strategy is recommended with buying at a lower range and reducing weight at a higher range. Over the longer term (3Y), the stock offers an attractive upside thanks to both its impressive earnings growth and the sector's bright outlook.