Kafi targets VND 1,050 billion pretax profit this year, as securities firms eye entry into the trillion-dong profit club

Kafi Securities targets pretax profit this year of VND 1,050 billion, up 129% from last year, reaching a record level ahead of its planned initial public offering (IPO). The profit target of 1,050 billion is viewed by some Kafi Securities shareholders as ambitious. They say this figure doubles last year and implies a return on equity of about 13%, higher than the performance of many leading securities firms. Secondly, the company had set a record target for 2025 but achieved only about 60% due to several large investments in technology infrastructure and staff. Nevertheless, Mr. Trinh Thanh Can - CEO of Kafi Securities - said he is confident in achieving the highest target to date to place the firm among the leaders. According to him, the retail segment is a primary pillar by expanding margin lending from more than VND 10,000 billion to an average of VND 14,000 billion, along with optimizing the profitability margin of lending products. "With an average lending rate of 11%, we estimate revenue from this business line to exceed VND 1,400 billion and profit of about VND 500 billion," Can said at the annual shareholders meeting on April 9. Other activities, such as fixed income trading and warrants, are forecast to contribute an additional VND 500 billion in profits. The remainder, according to Kafi's leadership, comes from corporate finance advisory with large deals in progress. The thousand-billion profit club of the securities sector currently has about 10 firms. TCBS, VIX and SSI share the lead positions with about VND 5,000-7,000 billion. Before Kafi, some securities firms also planned record highs as VN-Index is expected to hit new peaks, aided by foreign investor money returning thanks to market upgrades. LPBS, a securities firm linked to Mr. Nguyen Duc Thuy (CEO of Sacombank), also plans to join this group with a profit target of VND 1,700 billion. Kafi Securities currently has charter capital of VND 7,500 billion. The company recently approved a plan to issue 125 million shares publicly and 3.75 million ESOP shares. 70% of the mobilized capital will be allocated to margin lending, the rest to proprietary trading. According to Can, Kafi's positioning in the near term is as an intelligent investment platform based on technology and data, rather than a traditional securities firm. Last year, the company's revenue rose threefold to VND 2,840 billion; pretax profit rose 78% to VND 458 billion. The number of investor trading accounts rose more than 11-fold to 265,000, and it is projected to reach about 800,000 accounts by year-end.