Business assessment value among stock investment advice for 2022

Transactions at LienVietPostBank (Photo: Vietnam+)

Hanoi (VNA) - Experts recommend that those considering stocks as an investment channel for additional income should choose stocks that are connected to solid business value.

The stock market is moving towards a healthy course and the era of cheap money is coming to an end. Holding bank stocks is considered a bullish strategy for all investors.

The rush to make money is over

Vietnam's stock market has just gone through a volatile first quarter in 2022. According to Mr. Nguyen Duy Hung, Chairman of the Board of Directors of SSI Securities Company, the P/E ratio used to assess the relationship between stock prices in the market and earnings per share is around 13.5 times, which is quite low. Many industries will benefit from the current situation of the world and the market is bringing more opportunities than risks for investors.

Mr. Quach Manh Hao, a lecturer at Lincoln University, the United Kingdom, said inflation and high interest rates have an adverse relationship with hot stocks. In a high-interest rate environment, valuation becomes important, not because it helps determine the true value, but because it acts as a collateral valuation.

“Now is the time to move. Those considering stocks as an investment channel for additional income should choose safe stocks”, Mr. Quach Manh Hao said. “The period of making money in a hurry may have passed,” he added.

Analysts say that, in order to consider investment opportunities in securities in 2022, the foundation is the profit picture of listed companies in 2021, but growth is concentrated in only a few industry groups, led by the banking sector. Indeed, after the difficulties caused by the pandemic in the first quarter of last year, the year-end sprint brought the banking system into positive territory.

LienVietPostBank is a good example, proactively adapting to the new situation, helping its credit balance reach more than 209 trillion VND, an increase of 18 percent compared to 2020. Retail credit growth increased by an impressive 30 percent compared to 2020, accounting for 74 percent of total credit growth of the bank.
Net service revenue reached 858 billion VND, an increase of nearly 40 percent compared to 2020. Life insurance gained 620 billion VND, an increase of nearly 40 percent compared to 2020, ranking LienVietPostBank 12th in terms of new fee revenue among a total of 34 banks that are selling life insurance.

In particular, in December last year, LienVietPostBank broke through with the highest sales in five years of implementation. It entered the top 7 banks that completed over 100 per cent of the life insurance premium collection. This contributed more than 75 per cent of the total revenue from service fee collection. The size of life insurance contracts increased from 10.8 million VND in 2020 to 12.5 million VND in 2021.

Accordingly, pre-tax profit in 2021 reached 3.638 trillion VND, up 50 per cent compared to 2020. Profitability indicators of LienVietPostBank all increased. Return on average assets (ROAA) increased by 0.2 per cent, reaching 1.08 per cent. Return on average equity (ROAE) increased by nearly 5 per cent, reaching 18.5 per cent. Net interest income (NIM) increased by nearly 0.4 per cent, reaching 3.5 per cent.

Not only making a mark in business activities, LienVietPostBank always accompanies key social security programs of the country.

According to the State Bank of Viet Nam, the total amount of interest LienVietPostBank made to reduce interest rates for customers under the direction of the State Bank during the period from July 15, 2021 to December 31, 2021 is 158 billion VND with 50,289 billion VND for 12,236 customers./.