Margin lending drives HSC earnings as brokerage revenue tumbles

For investors, HSC’s nine-month results point to resilient earnings but a more concentrated revenue mix, with strong margin-lending growth offsetting double-digit declines in securities brokerage revenue and keeping profit broadly stable.

Ho Chi Minh City Securities Corporation (HSC; ticker: HCM) reported broadly flat after-tax profit of more than VND 861 billion in the first nine months of 2026, as a 38 per cent surge in margin-lending income offset steep declines in brokerage revenue and gains from financial assets.

At the end of the period, the fair value of financial assets at fair value through profit or loss (FVTPL) stood at approximately VND 9.363 trillion, down nearly 32 per cent from VND 13.766 trillion at the start of the year. Bonds accounted for the bulk of HSC's FVTPL portfolio at approximately VND 8.162 trillion.

HSC's listed and UPCoM share portfolio was valued at approximately VND 705 billion, down 21 per cent from the end of the second quarter and 82 percent from the beginning of the year. Exchange-traded fund certificates and open-ended funds were valued at VND 19 billion and VND 15 billion, respectively.

Its largest holding were VPBank's VPB shares, with a fair value of nearly VND 445 billion, followed by Techcombank's TCB shares at nearly VND 228 billion. Other stocks were valued at close to VND 33 billion. Against original cost, HSB's investment in VPB was carrying a gain of more than VND 18 billion, while its TCB holding posted a gain of nearly VND 3.6 billion. Other stocks, by contrast, recorded an unrealized loss of approx. VND 470 million. Compared with the end of second quarter of 2026, HSC raised the value of its VPB investment from nearly VND 137 billion to almost VND 445 billion, an increase of approximately 225 per cent.

Beyond its FVPTL shareholdings, HSC held a portfolio of underlying assets used to hedge cover warrants. The portfolio's fair value exceeded VND 461 billion as of September 30, up 96 per cent from the end of the second quarter of the year, but down 17 per cent in the beginning of 2026. Within this portfolio, TCB was value at more than VND 92 billion, HPG at nearly VND 74 billion, and ACB at more than VND 44 billion. Other shares accounted for over VND 168 billion.

HSC's FVPTL portfolio also included shares, bonds, exchange-traded fund certificates, and open-ended funds. Its newly released financial reports show that gains from FVPTL assets fell 21 per cent year on year to VND 746 billion in the first nine months of 2026. Brokerage revenue declined 26 per cent to VND 673 billion over the same period, including a sharp 70 per cent drop in the 3rd quarter.

In contrast, interests income from loans and receivables, primarily margin lending, rose to 2.289 trillion after nine months. This performance underscored the continued importance of margin lending to HSC and the wider securities sector amid volatile market conditions.

HSC's operating expenses, meanwhile, rose 9 per cent year on year to VND 2.506 trillion at the same time above, while the administrative expenses broadly unchanged at the value of VND 366 billion. After-tax profits, thus, broadly flat at the same period in 2025, at more than VND 861 billion.

For the year of 2026, HSC is targeting approx. VND 6.57 trillion in revenue and VND 1.841 trillion in after-tax profit. As of September 30, outstanding margin loans and advances for securities sales totaled for nearly VND 29.17 trillion, slightly above the end-of-second-quarter level, and up to 3.6 per cent from the start of the year.

Business & Integration - Vietnamese version: Chứng khoán HSC đối mặt sức ép từ mảng môi giới trong quý III, doanh thu giảm 70%; reported by Thuy Duong