(CLO) Pinetree Securities has had a long journey of changing its name, but its business performance has not improved much and the company was fined for violations in the segment with the best revenue.
Fined for violations in the best revenue segment
On October 9, 2024, the State Securities Commission (SSC) issued Decision No. 1097/QD-XPHC on administrative sanctions against Pinetree Securities Joint Stock Company (Pinetree Securities).
Accordingly, Pinetree was fined VND 125 million according to the provisions of Point c, Clause 4, Article 26 of Decree No. 156/2020/ND-CP dated December 31, 2020 of the Government stipulating sanctions for administrative violations in the field of securities and the securities market (Decree No. 156/2020/ND-CP) for violating the provisions on restricting margin trading (The Company makes new loans for securities that are no longer on the list of securities allowed for margin trading and counts these securities as real assets of customers in the margin trading account).
Pinetree Securities has had a long journey of changing its name but its business performance has not improved much and the company has been fined for violations in its best revenue segment. (Photo: ST)
At the same time, the company was fined VND 65 million according to the provisions of Point a, Clause 3, Article 42 of Decree No. 156/2020/ND-CP for the act of disclosing information not on time as prescribed by law (On July 18, 2024, Ho Chi Minh City Stock Exchange (HOSE) issued Notice No. 1331/TB-SGDHCM adding securities that are not eligible for margin trading, however, on July 25, 2024, the Company published the list of securities allowed for margin trading on the Company's website; On August 30, 2024, HOSE issued Notice No. 1562/TB-SGDHCM adding securities that are not eligible for margin trading, however, on September 6, 2024, the Company published the list of securities allowed for trading on the Company's website).
The total fine imposed on Pinetree Securities is VND190 million.
It can be seen that these two violations are both related to margin trading. And margin trading is the area that brings the best profit to the company.
Specifically, in the first 6 months of 2024, Pinetree's operating revenue was VND 146 billion, a slight increase compared to VND 118 billion in the same period last year. Of which, Interest from loans and receivables accounted for the highest proportion, up to 63.2% (equivalent to VND 92.2 billion. This indicator increased by VND 36.3 billion, equivalent to 64.9% compared to the first 6 months of 2023.
In previous years, margin trading was also a key growth driver for Pinetree as Interest from Loans and Receivables accounted for a very high proportion of Operating Revenue at 55.5% in 2023 and 56.4% in 2022.
It can be seen that in the first half of 2024, margin trading contributed more to the company's revenue. However, it was the area with many violations that led to fines.
Changing name does not change fate
For the majority of stock investors, Pinetree Securities is not a familiar name and has never been in the top of the largest brokers in the market. This is also understandable because Pinetree is not the "birth" name. Before that, this company had undergone many "name changes".
Pinetree Securities was formerly known as Mekong Securities Joint Stock Company. Operating since 2003, Mekong Securities has been quite miserable with a long journey of losses. At the end of 2016, Mekong Securities incurred an accumulated loss of VND22.7 billion. The company was once placed under special control by the State Securities Commission.
In 2017, Mekong Securities changed its name to HFT Securities Company. Despite the new name and recording a profit of VND3.7 billion, the company has not yet cleared its accumulated losses. As of December 31, 2017, HFT had an accumulated loss of VND19 billion.
In 2019, Korean giant Hanwha Investment & Securities completed the acquisition of HFT and changed its name to Pinetree Securities.
In 2019 - the first year that Korean capital accounted for 98.38% of the company's capital, Pinetree Securities suffered a loss of VND 4.7 billion. This loss was further compensated with VND 23.4 billion in 2020.
In the past two years, the situation has improved when Pinetree Securities made a profit of VND 13 billion (in 2022) and VND 22.3 billion (in 2023). At the end of 2022, Pinetree Securities still had an accumulated loss of VND 3.5 billion. It was not until 2023 that the company erased its accumulated loss and had VND 18.8 billion in undistributed profit as of December 31, 2023.
However, the company's capital efficiency is still very low. Pinetree Securities' Return on Equity at the end of 2023 was only 1.5%.
Source: https://www.congluan.vn/chung-khoan-pinetree-thay-ten-khong-doi-van-bi-phat-vi-sai-pham-o-mang-co-doanh-thu-tot-nhat-post317473.html
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