Road to profit in 2023

The third quarter business results of listed businesses and banks show that production and business activities are in a recovery trend, but the industries are quite differentiated. Data from FiinGroup shows that profit after tax in the third quarter of 2023 of the entire market decreased by 1.7% compared to the same period in 2022 and decreased by 7.6% compared to the second quarter of 2023.

Race to the finish line
 
A notable point is that in the first 9 months of the year, only 411/1,109, equivalent to about 37% of listed businesses and banks, completed over 75% of the profit after tax plan for the whole year 2023. The whole market completed 70 % of the yearly plan, including financial (69%) and non-financial (70.2%). On the race to the profit target, oil and gas, utilities and insurance are three industry groups that have reached the profit target for the whole year of 2023 in just the first 9 months of the year.

Most notably, the oil and gas group witnessed a strong reversal in profit after tax in the third quarter from decline to growth of hundreds of percent mainly thanks to improved EBIT margin when oil prices increased sharply. Among them, Binh Son Refining and Petrochemical Joint Stock Company (code BSR) and Vietnam Petroleum Group (Petrolimex, code PLX) are two typical cases.
 
Binh Son Refinery and Petrochemical's third quarter profit increased by more than 600% over the same period, mainly due to the gap between product prices and crude oil prices in the third quarter of 2023 being better than the same period, cost of goods sold decreased sharply, pulling down gross profit. The Company's growth was equal to the same period over the same period, causing profit after tax to increase sharply. Petrolimex recorded a 284% increase in profit after tax over the same period in the third quarter, mainly thanks to revenue from divestment at PG Bank.

Data from FiinGroup shows that 8/19 industries have a completion rate above the market average (70%), except real estate (contributing 13.6% of total profit after tax mainly thanks to operating activities). project wholesale activities in the second quarter of 2023 of Vinhomes), the remaining 7 industries contribute a very small proportion and therefore it is difficult to create a breakthrough in the growth of the entire market.
 
On the contrary, the group with a low rate of completing the profit after tax plan for 2023 is banks and industries expected to recover thanks to exports, consumer demand, and this group's contribution to total profit. Profit after tax of the whole market is more than 60%. Meanwhile, for the banking group, FiinGroup believes that the decline in profits of this group is mainly due to poor net interest income due to low credit growth in the context of the economy's poor capital absorption ability, NIM revenue is low. narrowly, the bancassurance and issuance consulting segments were affected by recent negative developments related to insurance cross-selling activities and corporate bond issuance.

Expectations for the banking group, Mr. Vu Duy Khanh, Director of Analysis of Smart Invest Securities Company, said that it can be expected that credit will be cleared in the coming time and next year, credit growth will increase. improve as the economy recovers. The amount of capital in the banking system in the last 6 months mobilized at cheaper interest rates, lending interest rates will be lower, stimulating loan demand, expected to promote credit growth again. Along with that, when bad debts are postponed or extended, provisioning costs will be "shared" instead of having to be accumulated over 1-2 quarters and will not erode the banking industry's profits too much.
 
"For the banking group, we need to pay attention to circulars related to accrued interest. Banks with large accrued interest will be affected and the future will become increasingly differentiated," Mr. Khanh added. .
 
The picture gradually becomes brighter

In terms of growth, profit after tax in the third quarter decreased in the banking and real estate groups, the two groups with the highest proportion in the total market profit structure. However, the real estate picture is gradually getting brighter as the knots are gradually being removed. Specifically, Ms. Ha Thu Giang, Director of the Credit Department for Economic Sectors, State Bank, commented that in the first 9 months of the year, real estate business credit grew very high with an increase of 21.86%. higher than the general credit growth rate and the same period last year. This shows that the solutions and efforts of the Government, ministries, branches and localities in removing difficulties and obstacles for the real estate market are being effective.

Assessing the third quarter business situation of businesses, Mr. Le Van Ha, Director of the Business Center, Yuanta Vietnam Securities Company, said that among the 4 quarters of the year, the first and third quarters are the two quarters. Business activities will be affected the most with particularities.
 
The third quarter clearly saw the difficulties of the economy from weak aggregate demand, reduced orders, fewer jobs and concentrated mainly in industry groups such as real estate, textiles, seafood and a number of industries. related dependencies. Mr. Ha believes that the overall economy will not be able to break through immediately after one quarter, but will certainly improve after many policies that the Government has issued to remove difficulties for businesses, bank interest rates Starting to adjust downwards will help capital costs as well as other costs of economic participants decrease significantly.

“The last quarter of the year will see more consumer sectors return from the bottom, but in 2023 the income of most people will weaken, so there are not high expectations for strong growth. For things to get better, industries need time to absorb policies and people need jobs to generate income. As the economy gradually stabilizes, spending and savings will increase, thereby increasing investment because of overall savings. The entire population's savings have decreased a lot after the pandemic and the bond crisis in 2022," Mr. Ha added.