REG - VietNam Holding Ltd - Interim Report
18/03/2024 07:00
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RNS Number : 1424H VietNam Holding Limited 18 March 2024
VietNam Holding Limited
("VNH" or the "Company")
Interim Report
VietNam Holding Limited is pleased to announce its unaudited results for the
six-month period from 1 July 2023 to 31 December 2023. This announcement
contains inside information, which is disclosed in accordance with the Market
Abuse Regulation.
More information on the Company is available
at https://www.vietnamholding.com (https://www.vietnamholding.com)
VietNam Holding Limited
(a non-cellular company limited by shares registered in Guernsey under the
Companies (Guernsey) Law, 2008, on 25 February 2019 with registered number
66090)
Condensed Interim Unaudited Financial Statements
for the six-month period from 1 July 2023 to 31 December 2023
Contents
Chairman's Statement 1
Investment Manager's Report 3
Market Report 5
Interim Report of the Directors 8
Statement of Directors' Responsibilities 13
Condensed Interim Unaudited Statement of Financial Position 14
Condensed Interim Unaudited Statement of Comprehensive Income 15
Condensed Interim Unaudited Statement of Changes in Equity 16
Condensed Interim Unaudited Statement of Cash Flows 17
Notes to the Condensed Interim Unaudited Financial Statements 18
Director Profiles 24
Key Parties 25
Chairman's Statement
Dear Shareholder,
I would like to thank all shareholders of VietNam Holding Limited (the
"Company" or the "Fund") who voted at our recent Annual General Meeting and
Extraordinary General Meeting. The almost unanimous (99%) support for the
five-yearly continuation of the Fund and for the approval of the innovative
redemption facility are much appreciated.
In our meetings ahead of the vote, several shareholders told us that they were
delighted by the Fund's performance on many fronts: the Net Asset Value
("NAV"); the outperformance against peers and the broader market; and the
narrower discount between the Fund's NAV per share and its share price. I will
touch on each of these briefly.
Firstly, the NAV per share increased by 8 percent in US dollar ("USD") terms
with Total Assets increasing to USD 123,460,167 as at 31 December 2023, from
USD 116,191,137 at 30 June 2023. Total Comprehensive Income was USD 8,904,430
in the six-month period, a significant increase on the Total Comprehensive
Loss of USD 21,831,338 generated in the corresponding period in 2022. The
Investment Manager gives a detailed explanation of the drivers of this asset
performance in the Investment Manager's Report. Let me add that the Manager
has shown nimbleness in decision making and has delivered a market-beating
return in the six-month period.
Secondly, the increase in the Fund's NAV per share was 4.8% higher than the
Vietnam All Share Total Return Index ("VNASTR"), and 5.8% higher than its
closest London listed peer during this period. Although the Fund is smaller
and has a higher total expense ratio than its peers due to its size, this
market-beating return is after all these fees are accounted for. Above all,
the Fund has outperformed VNASTR over 1, 3, 5 and 10 years.
Lastly, in addition to the Investment Manager's continuing communication
strategy, the Board made appropriate decisions for implementing share buybacks
as a means of addressing the discount between the share price and the NAV.
During the period in review, the Company bought back 440,212 shares at an
average price of USD 3.697, adding an estimated 0.12% in NAV per share
accretion. The Share buyback authority was renewed by the Shareholders at the
AGM in December 2023, allowing up to 14.99% of the Company's issued shares to
be bought back. Current practice is that shares bought back are cancelled.
It is worth noting that the Fund has the narrowest discount of the three
London-listed Vietnam focused funds. Over the last twelve months the discount
was at an average of 13.3% versus 17% for its peers. At the end of December,
the discount was 7.7%, versus an average of 19.5% for peers. I believe the
narrower discount is partly a reflection of the innovative redemption facility
that was proposed to shareholders in November and unanimously approved in
December. Starting this September, shareholders will have the option to redeem
shares on an annual basis at NAV(( 1 (#_ftn1) )). Of course, investors are
also free to buy and sell shares in the market at any time.
In December, I was delighted that the Fund's outperformance was recognised by
both Citywire and UK Investor Magazine, both of which awarded the Fund 'top
emerging market single country fund.' The Fund has also once again achieved
high marks in the United Nations Principles of Responsible Investing ("PRI")
transparency report. We are unashamedly proud of our efforts in this area. In
May 2023, we collaborated with the Investment Manager in sponsoring and
supporting the inaugural ESG investor conference in Vietnam and will be
supporting its sequel on 16 and 17 May 2024 in Ho Chi Minh City. I am fully
aware that some Funds in the industry have been criticised for 'greenwashing'
- mislabelling of efforts, and in certain cases unsubstantiated statements of
ESG activity. In contrast, the Fund has an authentic approach to ESG and has
been at the forefront of responsible investing for many years. It became a PRI
signatory in 2009, just three years after the PRI was established, and yet has
also maintained an industry-leading level of long-term outperformance.
In terms of our outlook, the world remains complex and economic recovery is
fragile. Although global inflation and interest rates may retreat this year,
the global economy faces unprecedented geopolitical risks and events that all
countries, including Vietnam, need to navigate. An estimated sixty percent of
the world's eligible voters go to the polls this year, and some newly elected
governments may choose populist domestic agendas, which is likely to put some
stress on the global system of free trade that has served the world well over
the past seventy years. Last year Vietnam welcomed both US President Biden,
and Chinese President Xi Jinping, as it seeks to strike a balance between
being a friendly shore for US manufacturers and a strong trading partner with
its Chinese neighbour.
The Manager has successfully navigated the Fund during the period in review
and will continue to seek both sustainable outperformance and strong risk
adjusted returns through its active management of our concentrated portfolio
of well-researched companies.
I would like to thank my fellow-board members for their contributions to the
Company. At the AGM in December, two of the long-standing Directors, Sean
Hurst and Damien Pierron retired from the board, and I am grateful for their
hard work over several years. We are in the process of recruiting a new board
member, and details will be released when the appointment is finalised.
Finally, I would also like to thank all our shareholders for their continuing
support in the Company and look forward to seeing what 2024, the Year of the
Dragon, in the Lunar calendar will bring.
Hiroshi Funaki
Chairman
VietNam Holding Limited
16 March 2024
Investment Manager's Report
More favourable domestic news in the fourth quarter of 2023 rekindled local
investor confidence. This is significant since Vietnam's equities market is
dominated by 7.5 million domestic individual investors.
Exports began to increase, resulting in a record full-year trade surplus of
USD 28 billion. Foreign Direct Investment ("FDI") proved to be robust, with
disbursed levels of FDI reaching record levels of USD 23 billion. Public
Expenditure was also positive, hitting a year high of USD 24 billion, with
progress made on certain critical pieces of new infrastructure, including site
work at the new International Airport in Long Thanh. These encouraging
factors, together with ongoing reductions in domestic funding costs, resulted
in renewed activity in the stock market. Daily liquidity improved (the Average
Daily Trade Value doubled during the year to USD 650 million), and the Vietnam
All Share Index ("VNAS") rose 3.2 percent during the six-month period.
Not all sectors of the economy were viewed as favourably, therefore stock
selection was crucial to the Fund's outperformance. During the six-month
period under review, the Fund's NAV increased by 8 percent (versus 3.2 percent
for VNAS), bringing the whole calendar year gain to 22.4 percent (versus 18.0
percent for VNAS).
Portfolio Performance
Our overweight position in Telecommunications, led by top holding FPT (14.9%
of NAV), increased by 27.6 percent during the period, resulting in a 42.6
percent year-end gain. In November, FPT announced an internal objective of
quintupling its worldwide IT outsourcing revenues to USD 5 billion by 2028
(this would still only be a fraction of the USD 20 to USD 30 billion in annual
revenues that Indian IT companies like Infosys and TCS enjoy). The company
also has a strong domestic education business (140,000 students enrolled in
Science, Technology, Engineering and Maths, or STEM) and is a leading provider
of corporate and residential broadband telecommunication services, with more
than four million subscribers (similar to Talk-Talk in the UK).
We hold another telecommunication stock, CTR (1.7% of NAV), though it is
technically classified as construction and materials. CTR generates half of
its revenues from its telecommunications infrastructure business (telecom
towers). It rose by 26.4 percent during the period, and 80 percent for the
entire year. In December, the Ministry of Information and Telecommunications
announced that 2G bandwidth would be discontinued in September 2024. 2G
accounts for roughly one-sixth of all usage on Viettel's network (Viettel is
CTR's parent company), implying that more 4G infrastructure is needed,
especially in the rural areas. This should benefit CTR in the medium term.
Industrials performed well with our overweight position in port operator
Gemadept (6.5% of NAV) increasing by 34.9 percent during the six-month period
and 56 percent for the whole year. Industrial Park developer, IDC (5.5% of
NAV) rose 24.4 percent during the period and 75.4 percent for the year. These
two sectors benefit from the 'made in Vietnam' theme, as global manufacturers
invest in factories to make goods for the global markets. Rather than trying
to select a single factory or brand, we are investing in the
business-to-business enablers, such as logistics and industrial parks.
Gemadept has enjoyed strong profit growth over the past three years, with an
unprecedented gain in 2023 from the sale of one of its older ports. This gain
helped to offset some of the weakness caused by decreased global commerce in
the first half of 2023. While we expect the relative growth in total profits
for Gemadept to be lower in 2024, the main port operations are seeing
increasing utilisation (higher throughput volume) and may benefit from higher
service fees.
IDC is one of Vietnam's major industrial park (IP) developers, with 10
projects spanning 4,000 hectares of industrial property. Industrial
real-estate outperformed residential and commercial counterparts during the
period. The company has benefitted from the influx of FDI into a range of
sectors, including industrial, materials and consumer staples.
One of our new positions in the year, FRT (4.9% of NAV), a leading retailer
(with a pharmaceutical brand and a digital goods brand) rose 45.4 percent
during the period, following a weaker first half, for a total stock price
return of 25 percent. The traditional digital goods retailing segment suffered
a loss in 2023 due to deteriorating consumer sentiment, while the newer,
fast-growing pharmacy business proved to be more resilient and profitable
(with double the gross margin as digital goods). The company opened 560
pharmacies in 2023, taking its total store count to 1,497. As a comparison,
Boots, the UK's largest chain, has 2,200 stores.
Not everything went up as expected, and our bank holdings (our largest sector,
though an underweight to the market) fell by 3.6 percent, with Sacombank (5%
of NAV) down by 9 percent in the period (though up 21 percent for the year)
and Vietcombank (5% of NAV) down by 8 percent (though up 15 percent over the
year). MBB (5.6% of NAV) remains a strong conviction in the banking sector
delivering an impressive 25 percent YoY increase. MBB's profit for the year
was USD 1.1 billion, a 15.7 percent YoY increase, thanks to a high Net
Interest Margin of 4.8% and excellent customer reach.
The bank has a strong digital offering, and by the end of 2023 it had 26
million customers using its mobile banking app, a 30 percent increase for the
year. This follows the high growth rate of e-commerce in the broader
Vietnamese economy which at 37 percent per annum is the highest in Asia(( 2
(#_ftn2) )).
Economic Outlook
We are pleased to have outperformed over 1, 3, 5, and 10 years, but we will
not rest on our laurels. The Vietnamese stock market is volatile, and so
requires active on-the-ground research and interaction capabilities. Our
portfolio includes 25 holdings, with the top ten accounting for 61.5 percent
of NAV. Having said that, we know the positions well and are engaged with the
boards and management of each company we hold. Also, liquidity in the market
remains sufficient, so the portfolio could be liquidated in less than 30 days.
As the Chairman points out, today's world is complex and often chaotic, and
exporting economies such as Vietnam are impacted by trade and tariff
disruptions. As we write this report, terrorists are attacking ships on the
Red Sea maritime route, and the Panama Canal's severe drought has cut the
number of crossings by 36 percent(( 3 (#_ftn3) )).
2024 is also a year when 60 percent of the world's population goes to the
polls. Taiwan and Bangladesh held elections in January, Pakistan and Indonesia
in February, and India and the United States of America face presidential
elections later this year. In the past, the Republican front-runner has made
comments about levelling the playing field regarding trade with the US,
signaling a policy of renewed trade tariffs if elected in November's
presidential election.
The positive backdrop to the external challenges facing Vietnam is the
relatively robust domestic macroeconomic conditions. The country has robust FX
reserves of around USD 100 billion, which have been bolstered by the record
trade surplus and FDI levels achieved in 2023. Additionally, inflation remains
modest, and government bond yields are at near record lows.
There are also encouraging indicators of domestic spending on infrastructure.
The new international airport at Long Thanh in Dong Nai Province
(approximately 50km from Ho Chi Minh City) is taking shape, new ports and
roads are being built, and the Hanoi and Ho Chi Minh City metro systems might
finally see the light of day. Infrastructure has a multiplier effect on
economic growth, especially new 'green field' projects. This is often shown as
an improvement in the lives of local communities and increased opportunities
for Vietnam's numerous Small to Medium sized Enterprises.
Another positive development is in the capital market infrastructure. The
delayed stock exchange upgrade may not solve every problem when it comes
online later in 2024, but it may provide enough of an impetus to remove
prefunding requirements for stock trading accounts. This small technical
adjustment may be all that is needed to see the FTSE Russell upgrade Vietnam
from frontier market to secondary emerging market (see the Market Report).
As the Chairman of the Fund notes, we continue to be nimble and innovative. We
do not take our outperformance to the market and our peers for granted and
look forward to delivering on our pledges to 'do more, measure more and report
more' to our investors and stakeholders during the year to come.
Dynam Capital, Ltd
16 March 2024
Market Report
Emerging from the Frontier
Last year in an article, 'A new frontier in Vietnam', we noted how Vietnam
accounted for 30% of the MSCI Frontier Market Index and highlighted the
challenges to being upgraded to the MSCI Emerging Market Index. Now, there is
another chance of an upgrade but on a different index, the FTSE Russell
Secondary Emerging Market Index. So, what are the prospects for Vietnam now?
Vietnam was added to the FTSE Russell's Watch List in September 2018 for a
possible reclassification from Frontier to Secondary Emerging market status.
However, progress towards such an upgrade has been painfully slow, in part due
to Covid-19, but also because Vietnam falls short of satisfying the criteria
used by FTSE Russell.
Unlike MSCI's three categories, Developed, Emerging and Frontier, FTSE has
four that a country's stocks can be classified as: Developed, Advanced
Emerging, Secondary Emerging and Frontier. Eligibility for a given status is
determined by six main criteria (MSCI uses five) and a total of 24
sub-criteria (MSCI has 18).
FTSE developed the criteria with consultation from the international
institutional investor community and it publishes an annual review of all
markets against this criteria each September. If a country is under
consideration for a status change, either up or down, it is included in the
Watch List. Vietnam is currently on this list for an upgrade, while Pakistan
is on the list for a downgrade.
When and if an upgrade happens, Vietnam will leave the likes of Bangladesh,
Mongolia and Sri Lanka and join the same league as Indonesia and the
Philippines. Vietnam, Indonesia, and the Philippines already share the 'lower
middle' GNI per capita ratings by the World Bank.
The countries only differ on 11 out of 24 criteria:
Category Indonesia Philippines Vietnam
Credit Worthiness Investment Investment Speculative
Market monitored by regulatory authority Restricted Pass Pass
No or simple registration process for foreign investors Pass Pass Restricted
Reasonable Transaction Costs Pass Not Met Pass
Short Sales Permitted Restricted Restricted* Not Met
Developed Derivatives Market Not Met Not Met Restricted
Off Exchange transactions permitted Pass Pass Not Met
Efficient Trading Mechanism Pass Pass Restricted
Central Counterparty Clearing Pass Pass Not Met
Settlement (free delivery) Restricted Restricted Not Met
Account structure operating at the Custodian level Restricted Restricted Not Met
Source: FTSE Russell, September 2023
*The Philippines introduced short selling in October 2023
Vietnam does not meet the 'Settlement' criterion because of the need for
pre-funding of stock accounts and pre-trading check to ensure availability of
funds prior to trade execution. Nevertheless, it will remain on the Watch List
as a Frontier market and reviewed for possible reclassification in 2025.
"Although progress on the planned market reforms has remained slow, a
recommitment to the work required has been made by senior levels of
government. In addition, the State Securities Commission (SSC) has
demonstrated renewed energy in seeking a workable solution that would remove
the need for pre-funding.", a leading brokerage in Vietnam said.
Viva Vietnam
The rapid rise of the retail investor in Vietnam has transformed the country's
capital markets. There are an estimated 7.5 million trading accounts in
Vietnam, which is equivalent to approximately 8% of the population. This is
comparable to the European average of 7.9% (euronerd.com). However, unlike
Europe, where institutional investors account for most of the stock market
activity, domestic retail investors dominate Vietnam's market. Furthermore,
daily liquidity in Vietnam now averages close to USD 1 billion, with more than
80% of this activity coming from domestic investors.
Despite increasing local interest and the growth in size and liquidity of its
stock market, leading global equity index providers continue to classify
Vietnam as a 'Frontier' country. It is the largest and arguably most developed
constituent of the FTSE Russell Frontier Index, with Vietnamese companies
accounting for 37% of the indices' USD 93 billion. Additionally, five Vietnam
companies are in the top-ten of the index.
Indices are widely used as a benchmark for active and passive global
institutional investors and fund managers. When a country's stocks are
included in the index, there is typically an increased allocation from
investors who use that benchmark. So, to be in line with the index, a Frontier
market investor may allocate 37% to Vietnamese stocks. If Vietnam is upgraded
to Secondary Emerging market, it might be expected to have an allocation of 1%
to 2%. That looks small, but the FTSE Emerging Market capitalisation is USD
6.6 trillion dollars (seventy times bigger than the Frontier Market), so
Vietnam will see a much smaller share of a much larger pie.
The stakes are high
It goes without saying that when and if Vietnam is classified as an emerging
market, the country would attract significantly more foreign capital and
potentially see a re-rating in the valuation of several companies listed on
its stock markets. Some studies have also suggested that such an upgrade would
also reduce market risk, lower the cost of capital, and make the equity market
more suitable as a source of domestic financing.
The benefits for the Vietnamese government in pursuing this upgrade include
the following:
1. Enhanced Global Investment and Economic Growth: Achieving emerging
market status would significantly increase foreign investment inflows,
providing capital for infrastructure, technology, and various sectors. This
influx of investment would accelerate economic growth, creating more jobs and
enhancing the overall standard of living.
2. International Recognition and Credibility: Being classified as an
emerging market would affirm Vietnam's economic stability and progress on the
global stage. This recognition would improve trade relations, open new
partnership opportunities, and potentially lead to more favourable
international agreements.
3. Market and Economic Resilience: The process of upgrading would
necessitate and encourage the implementation of robust financial regulations
and practices. This would not only attract more investors but also ensure a
more resilient and diversified economy, better equipped to handle global
economic fluctuations.
Vietnamese authorities could assist the stock market in achieving an upgraded
status in the following ways:
1. Regulatory Reforms and Transparency: Implementing and enforcing stricter
regulatory standards, particularly those related to corporate governance,
financial disclosures, and transparency. Aligning with international best
practices will build investor confidence and meet the criteria set by global
market classification entities.
2. Market Infrastructure and Accessibility Improvements: Enhancing the
stock market infrastructure to ensure efficient trading, clearing, and
settlement processes. Additionally, easing restrictions on foreign ownership
and investment, and simplifying the process for foreign investors to
participate in the market.
3. Economic Diversification and Stability Measures: Encouraging
diversification in the economy, which in turn diversifies the stock market,
reducing reliance on a few sectors. Implementing policies that promote
economic stability, such as controlling inflation and maintaining fiscal
discipline, will further bolster investor confidence.
Moving forward
The most important point is that taking these incremental steps towards
inclusion will benefit everyone investing in Vietnam in the long run. Although
the initial influx to the market may be modest, ranging between USD 3 and USD
5 billion, the government would greatly appreciate the prestige.
Eventual inclusion would be a huge move for Vietnam, putting it more firmly on
investors' radars, and there will be plenty of opportunities to reap even
before that happens.
The market is appealingly cheap, with stocks trading at around 10 times
earnings and companies forecasting an average of 20% growth in earnings in
2024. Weak global growth and domestic sentiment depressed the stock market in
much of 2023, but with a better second half, funds like VietNam Holding
Limited ("VNH") managed to generate strong overall returns (up 23% on the
year). Although foreigners were net sellers of Vietnamese equities in 2023,
perhaps as we enter the Year of the Dragon the prospects of a possible upgrade
next year by one of the key index producers would shine more light on the
market again and attract greater foreign investor inflows.
Growth at a reasonable price has been one of VNH's mantras during the past six
years for its concentrated portfolio of public companies listed on the Vietnam
stock exchanges. Whether you view Vietnam as the biggest Frontier Market, or
one of the smaller Emerging Markets, it is a country that could add sensible
diversification to your portfolio in 2024.
This article has been written by Craig Martin, Chairman of Dynam Capital.
Dynam is the Fund manager for LSE-listed VNH.
Interim Report of the Directors
The Board of Directors (the "Directors") submits its report together with the
Condensed Interim Unaudited Financial Statements of VietNam Holding Limited
(the "Company") for the six-month period from 1 July 2023 to 31 December 2023
(the "six-month period").
The Company is registered in Guernsey as a non-cellular company with limited
liability. The registered office of the Company is 1 Royal Plaza, Royal
Avenue, St Peter Port, Guernsey, GY1 2HL.
Investment Objective
The Company's investment objective is to achieve long-term capital
appreciation by investing in a diversified portfolio of companies that have
high growth potential at an attractive valuation.
Investment Policy
The Company attempts to achieve its investment objective by investing in the
securities of publicly traded companies in Vietnam, and in the securities of
foreign companies if a majority of their assets and/or operations are based in
Vietnam. The Company may invest in equity securities or securities that have
equity features, such as bonds that are convertible into equity.
The Company may invest in listed or unlisted securities, either on the
Vietnamese stock exchanges, through purchases on the OTC Market, or through
privately negotiated deals.
The Company may invest its available cash in the Vietnamese domestic bond
market as well as in international bonds issued by Vietnamese entities.
The Company may utilise derivatives contracts for hedging purposes and for
efficient portfolio management but will not utilise derivatives for investment
purposes.
The Company does not intend to take control of any company or entity in which
it has directly or indirectly invested (the "Investee Company") or to take an
active management role in any such company. However, Dynam Capital, Ltd.
("Dynam Capital"), (the "Investment Manager") may appoint one of its
directors, employees or other appointees to join the board of an Investee
Company and/or may provide certain forms of assistance to such company,
subject to prior approval by the Company's Board.
The Company integrates environmental, social and corporate governance ("ESG")
factors into its investment analysis and decision-making process. Through its
Investment Manager, the Company actively incorporates ESG considerations into
its ownership policies and practices and engages Investee Companies in pursuit
of appropriate disclosure and the improvement of material issues.
The Company may invest:
● up to 25% of its Net Asset Value ("NAV") (at the time of investment)
in companies with shares traded outside of Vietnam if a majority of their
assets and/or operations are based in Vietnam;
● up to 20% of its NAV (at the time of investment) in direct private
equity investments; and
● up to 20% of its NAV (at the time of investment) in other listed
investment funds and holding companies which have the majority of their assets
in Vietnam.
Borrowing Policy
The Company is permitted to borrow money and to grant security over its assets
provided that such borrowings do not exceed 25% of the latest available NAV of
the Company at the time of the borrowing unless the Shareholders in general
meeting otherwise determine by ordinary resolution.
Investment Restrictions and Diversification
The Company will adhere to the general principle of risk diversification in
respect of its investments and will observe the following investment
restrictions:
● the Company will not invest more than 10% of its NAV (at the time of
investment) in the shares of a single investee company;
● the Company will not invest more than 30% of its NAV (at the
time of investment) in any one sector;
● the Company will not invest directly in real estate or real estate
development projects, but may invest in companies which have a large real
estate component, if their shares are listed or are traded on the OTC Market;
and
● the Company will not invest in any closed-ended investment fund
unless the price of such investment fund is at a discount of at least 10% to
such investment fund's NAV (at the time of investment).
Furthermore, based on the guidelines established by the United Nations
Principles for Responsible Investment, of which the Company is a signatory:
● the Company will not invest in companies known to be significantly
involved in the manufacturing or trading of distilled alcoholic beverages,
tobacco, armaments or in casino operations or other gambling businesses;
● the Company will not invest in companies known to be subject to
material violations of Vietnamese laws on labour and employment, including
child labour regulations or racial or gender discriminations; and
● the Company will not invest in companies that do not commit to
reducing in a measurable way pollution and environmental problems caused by
their business activities.
Principal Risks
Market Risk
Vietnam is an increasingly open trading nation, and the changes in terms of
international trade, disruption to supply chains and impositions of tariffs
could impact directly and indirectly the Vietnamese Economy and the companies
in which the Company is invested. The Vietnamese economy can also be impacted
by the global-macro economic conditions, and also geopolitical tensions. The
Vietnamese capital markets are relatively young, and liquidity levels can
change abruptly responding to changes in behaviour of domestic and
international investors.
Parts of the portfolio may be prone to enhanced liquidity and price risk.
Investor Sentiment
Vietnam is currently classified as a Frontier Market by MSCI, and the
timetable for any inclusion as an Emerging Market is unsure. Investor
attitudes to Frontier and Emerging Markets can change, leading to reduced
demand for the Company's shares, and an increase in the discount to NAV per
share.
Investment Performance
The performance of the Company's investment portfolio could be poor, either
absolutely or in relation to the Company's peers, or to the market as a whole.
Fair Valuation
The risks associated with the fair valuation of the portfolio could result in
the NAV of the Company being misstated. The quoted companies in the portfolio
are valued at market price, but it may be difficult to liquidate, where large
positions are held, at these prices in an orderly fashion in the ordinary
course of market activity. The values of the Company's underlying investments
are denominated in Vietnamese Dong, whereas the Company's accounts are
prepared in US Dollars. The Company does not hedge its Vietnamese Dong
exposures so exchange rate fluctuations could have a material effect on the
NAV.
Investment Management Agreement
The fund management activities are outsourced to the Investment Manager. If
the Investment Manager became unable to carry out these activities or if the
Investment Management Agreement was terminated, there could be disruptions to
the management of the portfolio until a suitable replacement is found.
Operational
The Company has no employees and is dependent on a number of third parties for
the provision of services (including Investment Management, Fund
Administration and Custody). Any control failures or gaps in the services
provided could result in damage or loss to the Company.
Legal and Regulatory
Failure to comply with relevant regulation and legislation in relevant
jurisdictions may have an impact on the Company. Although there are compliance
policies (including anti-bribery policies) in place at the Company, the
Investment Manager and all service providers, the Company could be damaged or
suffer losses if any of these policies were breached.
Pandemic Risk
The global reach, impact and disruption to markets resulting from the recent
outbreaks of Covid-19 showed the devastating effects that a global pandemic
could cause. Lockdowns, quarantine measures and restrictions on travel caused
sustained global economic disruption and the slowdown in growth caused some
industries and companies to face severe financial pressures.
Climate Risk
Climate change is happening faster than models earlier predicted, threatening
the safety of billions of people on the planet. Vietnam is one of the five
countries most vulnerable to climate change. The country's diverse geography
means it is hit by sea level rise, typhoons, landslides, flooding and
droughts, and weather events are expected to worsen in coming years. Two types
of climate-related risks have been identified.
(1) Physical risks: sea level rise, floods and typhoons that put
infrastructure or real estate companies with projects in coastal areas or
low-lying levels at higher risk from physical impacts of climate change.
(2) Transition risks: climate policy and rising carbon prices may cause higher
prices and impact the viability of companies that rely on fossil fuels or
those in high carbon intensity activities and may necessitate a significant,
and costly, technology shift.
Emerging Risks
New risks beyond those identified as Principal Risks can develop. These
Emerging Risks may have a detrimental or existential impact on the Company.
Life of the Company
The Company does not have a fixed life, but the Directors consider it
desirable that shareholders should have the opportunity to review the future
of the Company at appropriate intervals. Accordingly, the Directors intend
that every fifth year a special resolution will be proposed that the Company
shall continue in existence. If the resolution is not passed the Directors
will be required to formulate proposals to be put to shareholders to either
wind up the Company or implement a reconstruction, amalgamation or other
material alteration to the Company or its activities. The Directors last
tabled such a resolution at the Annual General Meeting of the Company on 21
December 2023. The resolution was passed, allowing the Company to continue as
currently constituted. The next such vote is expected to be tabled at the
Annual General Meeting in 2028.
Annual Redemption Facility
At the Extraordinary General Meeting of the Company held on 21 December 2023
shareholders voted in favour of a proposal that introduced an innovative
redemption structure that gives shareholders an annual opportunity to realise
their holding in the Company at fair market value. The first Redemption Point
is expected to be on 30 September 2024.
It is expected that the introduction of the redemption facility will result in
the Company being treated as an "offshore fund" for the purposes of UK
taxation. UK resident Shareholders should note that the Company expects to
apply to HMRC for approval as a "reporting fund" for the purposes of the
Offshore Fund Rules. The Company expects to comply with the requirements for
obtaining and maintaining reporting fund status, but Shareholders should note
that this cannot be guaranteed. Further details on the tax consequences are
detailed in the Circular dated 27 November 2023.
Shareholders are advised to consider their investment objectives and their own
individual financial and tax circumstances and should seek independent
professional tax advice and advice from their own independent financial
adviser authorised under the Financial Services and Markets Act 2000 as
appropriate.
Results
The results of the Company for the six-month period and the state of its
financial affairs as at the reporting date are set out in the Condensed
Interim Unaudited Financial Statements on pages 14 to 23.
Performance
To ensure the Company meets its objectives the Directors evaluate the
performance of the Investment Manager at least at each quarterly Board meeting
and take into account the following performance indicators:
● NAV - reviews the performance of the portfolio
● Discount to NAV - and reviews the average discount for the
Company's shares against its peer group.
Related Parties
Details of related party transactions that have taken place during the period
and any material changes, if any, are set out in note 6 of the Condensed
Interim Unaudited Financial Statements.
Share Repurchase Programme
Details of the Company's share repurchase programme are set out in note 4 of
the Condensed Interim Unaudited Financial Statements.
Board of Directors
The members of the Board during the six-month period and up to the date of
this report were:
Name Position
Hiroshi Funaki Non-Executive Chairman
Philip Scales Non-Executive Director; Audit and Risk Committee Chairman and Management
Engagement Committee Chairman
Saiko Tajima Non-Executive Director; Environmental, Social and Governance Committee
Chairman and Remuneration and Nomination Committee Chairman
Sean Hurst and Damien Pierron stood down at the AGM and resigned as Directors
of the Company effective 21 December 2023.
Directors' Interest in the Company
As at 31 December 2023 and 30 June 2023, the interests of the Directors in
shares of the Company were as follows:
Shares held Shares held
as at 31 December 2023 as at 30 June 2023
Hiroshi Funaki 19,887 19,887
Sean Hurst Resigned 5,312
Philip Scales 10,077 10,077
Damien Pierron Resigned 4,644
Saiko Tajima 5,000 5,000
Going Concern
The Board considered it appropriate to prepare the Condensed Interim Unaudited
Financial Statements on the going concern basis, as explained in the basis of
preparation paragraph in note 2 to the Condensed Interim Unaudited Financial
Statements. In making this statement, the Board has made enquiries of the
Investment Manager and reviewed the Principal Risks. The Board also considered
the levels of working capital available to the Company, the closed-ended
nature of the Company, the liquidity of the investment portfolio, forecasts of
future cash flows, other geopolitical factors. There were no identified
material uncertainties to the Company's ability to continue.
On behalf of the Board
Hiroshi
Funaki
Philip Scales
Chairman
Director
VietNam Holding
Limited
VietNam Holding Limited
16 March
2024
16 March 2024
Statement of Directors' Responsibilities
The Directors are responsible for preparing this interim financial report in
accordance with applicable law and regulations. The Directors confirm that to
the best of their knowledge:
● the Condensed Interim Unaudited Financial Statements have been
prepared in accordance with IAS 34 Interim Financial Reporting; and
● the Chairman's Statement, the Investment Manager's Report and the
Interim Report of the Directors include a fair review of information required
by:
(i) DTR 4.2.7R of the UK Disclosure and Transparency Rules, being an
indication of important events, which have occurred during the first six
months and their impact on the Condensed Unaudited Interim Financial
Statements, and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(ii) DTR 4.2.8R of the UK Disclosure and Transparency Rules, being related
party transactions, which have taken place in the first six months, and which
have materially affected the financial position or performance of the Company
during that period, and any material changes in the related party transactions
disclosed in the last Annual Report.
On behalf of the Board
Hiroshi
Funaki
Philip Scales
Chairman
Director
16 March 2024
16 March 2024
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website, and for
the preparation and dissemination of financial statements. Legislation in
Guernsey governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Condensed Interim Unaudited Statement of Financial Position as at 31 December
2023
Unaudited Audited
As at 31.12.23 As at 30.06.23
Notes USD USD
Assets
Non-current assets
Investments at fair value through profit or loss 7 120,510,213 113,225,102
Total non-current assets 120,510,213 113,225,102
Current assets
Cash and cash equivalents 2,949,954 1,750,069
Accrued dividends - 877,375
Receivables on sale of investments - 338,591
Total current assets 2,949,954 2,966,035
Total assets 123,460,167 116,191,137
Equity
Share capital 4 166,645,041 166,645,041
Reserve for own shares (172,281,084) (170,650,584)
Retained earnings 128,169,250 119,264,820
Total equity 122,533,207 115,259,277
Liabilities
Payables on purchase of investments 645,078 343,745
Payables on repurchase of shares - 246,469
Accrued expenses 281,882 341,646
Total liabilities 926,960 931,860
Total equity and liabilities 123,460,167 116,191,137
The Condensed Interim Unaudited Financial Statements on pages 14 to 23 were
approved by the Board of Directors on 16 March 2024 and were signed on its
behalf by
Hiroshi Funaki
Philip Scales
Chairman of the Board of
Directors
Chairman of the Audit and Risk Committee
The accompanying notes on pages 18 to 23 form an integral part of these
financial statements.
Condensed Interim Unaudited Statement of Comprehensive Income
Note Unaudited Unaudited
01.07.23- 01.07.22-
31.12.23 31.12.22
USD USD
Dividend income from investments at fair value through profit or loss 1,263,069 809,155
Net gain/(loss) from investments at fair value through profit or loss 5 9,740,456 (20,501,018)
Net foreign exchange loss (104,425) (408,115)
Net investment income/(loss) 10,899,100 (20,099,978)
Investment management fees 6 1,045,166 965,443
Directors' fees and expenses 6 212,915 190,646
Administrative and accounting fees 106,560 99,863
Custodian fees 53,852 79,417
Audit fees 41,467 37,762
Other expenses 534,710 358,229
Total operating expenses 1,994,670 1,731,360
Other comprehensive income - -
Total comprehensive income/(loss) for the period 8,904,430 (21,831,338)
Basic and diluted earnings/(loss) per share USD 0.32 (USD 0.75)
The accompanying notes on pages 18 to 23 form an integral part of these
financial statements.
Condensed Interim Unaudited Statement of Changes in Equity
Share Reserve for Retained Total
capital own shares earnings
USD USD USD USD
Balance at 1 July 2022 166,645,041 (165,709,783) 127,886,909 128,822,167
Total comprehensive loss for the period
Change in net assets attributable to shareholders - - (21,831,338) (21,831,338)
166,645,041 (165,709,783) 106,055,571 106,990,829
Contributions and distributions
Repurchase of own shares (note 4) - (1,627,485) - (1,627,485)
- (1,627,485) - (1,627,485)
Balance at 31 December 2022 166,645,041 (167,337,268) 106,055,571 105,363,344
Balance at 1 July 2023 166,645,041 (170,650,584) 119,264,820 115,259,277
Total comprehensive income for the period
Change in net assets attributable to shareholders - - 8,904,430 8,904,430
166,645,041 (170,650,584) 128,169,250 124,163,707
Contributions and distributions
Repurchase of own shares (note 4) - (1,630,500) - (1,630,500)
- (1,630,500) - (1,630,500)
Balance at 31 December 2023 166,645,041 (172,281,084) 128,169,250 122,533,207
The accompanying notes on pages 18 to 23 form an integral part of these
financial statements.
Condensed Interim Unaudited Statement of Cash Flows
Unaudited Unaudited
01.07.23 - 01.07.22 -
31.12.23 31.12.22
USD USD
Cash flows from operating activities
Total comprehensive income/(loss) for the period 8,904,430 (21,831,338)
Adjustments to reconcile total comprehensive income/(loss) to net
cash from operating activities:
Dividend income (1,263,069) (809,155)
Net (gain)/loss from investments at fair value through profit or loss (9,740,456) 20,501,018
Purchase of investments (26,434,224) (25,555,631)
Proceeds from sale of investments 29,190,902 26,750,546
Net foreign exchange loss 104,425 408,115
Decrease in receivables on sale of investments 338,591 -
Decrease in accrued expenses (59,764) (70,160)
(Decrease)/Increase in repurchases of shares payable (246,469) 80,978
Dividends received 2,140,444 867,927
Net cash from operating activities 2,934,810 342,300
Cash flows used in financing activities
Repurchase of own shares (1,630,500) (1,627,485)
Net cash used in financing activities (1,630,500) (1,627,485)
Net increase/(decrease) in cash and cash equivalents 1,304,310 (1,285,185)
Cash and cash equivalents at beginning of the period 1,750,069 8,160,681
Effect of exchange rate fluctuations on cash held (104,425) (408,115)
Cash and cash equivalents at end of the period 2,949,954 6,467,381
The accompanying notes on pages 18 to 23 form an integral part of these
financial statements.
Notes to the Condensed Interim Unaudited Financial Statements
For the six-month period from 1 July 2023 to 31 December 2023
1 The Company
VietNam Holding Limited (the "Company") is a closed-end investment company
that was incorporated in the Cayman Islands on 20 April 2006 as an exempted
company with limited liability under registration number 166182. On 25
February 2019, the Company, via a process of cross-border continuance,
transferred its legal domicile from the Cayman Islands to Guernsey and was
registered as a closed-ended company limited by shares incorporated in
Guernsey with registered number 66090.
On 8 March 2019, the Company's ordinary shares were cancelled from trading on
AIM and admitted to the Premium segment of the official list of the UK Listing
Authority ("Official List") and trading on the main market of the London Stock
Exchange ("Main Market"). On the same date the Company's shares were admitted
to listing and trading on the Official List of The International Stock
Exchange ("TISE").
The investment objective of the Company is to achieve long-term capital
appreciation by investing in a diversified portfolio of companies that have
high growth potential at an attractive valuation.
At the Annual General Meeting held on 21 December 2023 the Shareholders voted
in favour of the continuance resolution, authorising the Company to operate in
its current form through to the 2028 Annual General Meeting when a similar
resolution will be put forward for Shareholders' approval.
Dynam Capital, Ltd has been appointed as the Company's Investment Manager and
is responsible for the day-to-day management of the Company's investment
portfolio in accordance with the Company's investment policies, objectives and
restrictions.
Sanne Group (Guernsey) Limited is the Company's administrator.
Standard Chartered Bank (Singapore) Limited and Standard Chartered Bank
(Vietnam) Limited are the custodian and the sub-custodian respectively.
Standard Chartered Bank (Singapore) Limited is also the sub-administrator.
The registered office of the Company is 1 Royal Plaza, Royal Avenue, St Peter
Port, Guernsey, GY1 2HL.
2 Principal Accounting Policies
(a) Statement of compliance
The Condensed Interim Unaudited Financial Statements (the "financial
statements") have been prepared in accordance with IAS 34 Interim Financial
Reporting, the Disclosure Guidance Transparency Rules of the UK's Financial
Conduct Authority and the Listing Rules.
The financial statements do not include all of the information required for
full financial statements and should be read in conjunction with the Company's
audited financial statements for the year ended 30 June 2023 which were
prepared in accordance with International Financial Reporting Standards as
adopted by the EU ("IFRS"). The accounting policies used by the Company are
the same as those applied by the Company in its annual financial statements as
at and for the year ended 30 June 2023.
The Directors have assessed the impact, or potential impact, of all New
Accounting Requirements. In the opinion of the Directors, there are no
mandatory New Accounting Requirements applicable in the current period that
had any material effect on the reported performance, financial position, or
disclosures of the Company. Consequently, no mandatory New Accounting
Requirements are listed. The Company has not early adopted any New Accounting
Requirements that are not mandatory.
All non-mandatory New Accounting Requirements in issue are either not yet
permitted to be adopted or, in the Directors' opinion, would have no material
effect on the reported performance, financial position, or disclosures of the
Company and consequently have neither been adopted, nor listed.
(b) Basis of preparation
The financial statements are presented in United States Dollars ("USD"), which
is the Company's functional currency. The financial statements have been
prepared on a going concern basis, applying the historical cost convention,
except for the measurement of investments at fair value through profit or
loss.
Going concern
The Directors have reasonable expectations and are satisfied that the Company
has adequate resources to continue its operations and meet its commitments for
the foreseeable future and they continue to adopt the going concern basis for
the preparation of the financial statements. In making this statement, the
Directors confirm the Company's forecasts and projections have been stress
tested taking into account the potential for (i) asset value declines and (ii)
declines in cash dividends from equities held in the portfolio and (iii) share
buybacks and tender offers. The Directors note that the underlying liquidity
of the Vietnamese stocks has increased significantly during the period with
average daily traded volumes doubling from the previous six-month period. The
Company's liquidity position, taking into account cash held and with the
ability to sell underlying assets to meet share buybacks, tender offers and to
meet the operating costs of the Company, shows that the Company is able to
operate with appropriate liquidity and be able to meet its liabilities as they
fall due. The Directors therefore have a reasonable expectation that the
Company will have adequate resources to continue its operations for the
foreseeable future and continue to adopt the going concern basis of accounting
in preparing the financial statements.
Critical accounting estimates and judgements
The preparation of financial statements in accordance with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
The estimated and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both current
and future periods.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Functional currency
The Company's shares were issued in USD and the listing of the shares on the
Main Market and TISE is in USD. The performance of the Company is measured and
reported to the investors in USD, although the primary activity of the Company
is to invest in the Vietnamese market. The Directors consider the USD as the
currency that most faithfully represents the economic effects of the
underlying transactions, events and conditions.
Fair value of financial instruments
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. The Company uses its
judgement to select a variety of methods and make assumptions that are mainly
based on market conditions existing at each reporting date.
3 Operating Segments
An operating segment is a component of the Company that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Company's
other components. The Company is engaged in a single segment of business,
being investment in Vietnam. The Board, as a whole, has been determined as
constituting the chief operating decision maker of the Company. The key
measure of performance used by the Directors to assess the Company's
performance and to allocate resources is the total return on the Company's NAV
calculated as per the prospectus.
Information on gains and losses derived from investments are disclosed in the
statement of comprehensive income.
The Company is domiciled in Guernsey, Channel Islands. Entity wide disclosures
are provided as the Company is engaged in a single segment of business,
investing in Vietnam. In presenting information on the basis of geographical
segments, segment investments and the corresponding segment net investment
income arising thereon are determined based on the country of domicile of the
respective investment entities.
All of the Company's investments in securities at fair value are in Vietnam as
at 31 December 2023 and 30 June 2023.
All of the Company's investment income can be attributed to Vietnam for the
periods ended 31 December 2023 and 31 December 2022.
4 Share Capital
Ordinary shares of USD 1.00 each
Pursuant to its redomiciliation to Guernsey, the Company re-registered with an
authorised share capital of USD 200,000,000 divided into 200,000,000 shares of
a nominal or par value of USD 1.00 each. In line with the Company's Articles
of Incorporation Amended and restated by special resolution on 21 December
2023, the Company may from time to time redeem all or any portion of the
shares held by the Shareholders on annual basis upon giving notice of not less
than 30 calendar days.
On 8 March 2019 the Company's ordinary shares were cancelled from trading on
AIM and admitted to the Premium segment of the Official List and trading on
the Main Market. On the same date the Company's shares were admitted to
listing and trading on the TISE.
31.12.23 30.06.23
No. of shares No. of shares
Total shares issued and fully paid (after repurchase and 27,725,104 29,225,667
cancellations) at and beginning of the period/year
Shares cancellation (440,212) (1,500,563)
27,284,892 27,725,104
Repurchased and reserved for own shares
At beginning of the period/year - -
During the period/year (440,212) (1,500,563)
Shares cancellation 440,212 1,500,563
- -
Total outstanding ordinary shares with voting rights 27,284,892 27,725,104
As a result, as at 31 December 2023 the Company has 27,284,892 (30 June 2023:
27,725,104) ordinary shares with voting rights in issue (excluding the reserve
for own shares), and nil (30 June 2023: nil) are held as reserve for own
shares.
The Company does not have any externally imposed capital requirements.
The Company's general intention is to reinvest the capital received on the
sale of investments. However, the Directors may from time to time and at their
discretion, either use the proceeds of sales of investments to meet the
Company's expenses or distribute them to shareholders. Alternatively, the
Company may repurchase its own ordinary shares with such proceeds from
shareholders pro rata to their shareholding upon giving notice of not less
than 30 calendar days to shareholders (subject always to applicable law) or
repurchase ordinary shares at a price not exceeding the last published net
asset value per share.
5 Net Gain/(Loss) from Investments at Fair Value through Profit or Loss
6 months to 6 months to
31.12.23 31.12.22
USD USD
Realised gain/(loss) on disposal of investments at fair value through profit 3,516,636 (3,268,922)
or loss
Unrealised gain/(loss) on investments at fair value through profit or loss 6,223,820 (17,232,096)
9,740,456 (20,501,018)
6 Related Party Transactions
Investment management fees
The Company entered into a new investment management agreement with Dynam
Capital, Ltd on 26 June 2018. The agreement was amended and restated on 8
October 2018 and further amended and restated on 1 October 2020. The Board and
the Investment Manager agreed to modify the management fee (previously on a
sliding scale of 1.5% per annum on NAV below USD 300 million, 1.25% per annum
on NAV between USD 300 - USD 600 million, and 1.0% per annum on NAV above USD
600 million) effectively from 1 November 2020.
Pursuant to the agreement the Investment Manager is entitled to receive a
monthly management fee, paid in the manner set out as below:
● On the amount of the Net Asset Value of the Company up to but
excluding USD 300 million, one-twelfth of 1.75%;
● On the amount of the Net Asset Value of the Company between and
including USD 300 million up to and including USD 600 million, one-twelfth of
1.5%; and
● On the amount of the Net Asset Value of the Company that exceeds
USD 600 million, one-twelfth of 1%.
The management fee accruing to the Investment Manager for the six-month period
to 31 December 2023 was USD 1,045,166 (period ended 31 December 2022: USD
965,443). An amount of USD 172,801 (30 June 2023: USD 162,201) was outstanding
as at 31 December 2023.
Directors' fees and expenses
The Board of Directors determines the fees payable to each Director, subject
to a maximum aggregate amount of USD 350,000 (2022: USD 350,000) per annum
being paid to the Board of Directors as a whole. The Company also pays
reasonable expenses incurred by the Directors in the conduct of the Company's
business including travel and other expenses. The Company pays for directors
and officers liability insurance coverage. The charges for the six-month
period to 31 December 2023 for the Directors fees were USD 163,052 (period
ended 31 December 2022: USD 160,564) and expenses were USD 49,863 (2022: USD
30,082).
As at 31 December 2023, USD 12,747 (30 June 2023: USD nil) of Directors' fees
were outstanding.
Directors' ownership of shares
As at 31 December 2023, Directors held 34,964 ordinary shares in the Company
(30 June 2023: 44,920) as listed below.
Hiroshi Funaki 19,887 Shares
Philip Scales 10,077 Shares
Saiko Tajima 5,000 Shares
7 Fair Value Information
For certain of the Company's financial instruments not carried at fair value,
such as cash and cash equivalents, accrued dividends, other receivables,
receivables/payable upon sales/purchase of investments and accrued expenses,
the amounts approximate to fair value due to the immediate or short-term
nature of these financial instruments.
Other financial instruments are measured at fair value through profit or loss.
Fair value estimates are made at a specific point in time, based on market
conditions and information about the financial instrument. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgement and therefore, cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
● Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments. This level includes listed equity
securities on exchanges (for example, Ho Chi Minh Stock Exchange).
● Level 2: Inputs other than quoted prices included within Level 1
that are observable either directly (i.e., as prices) or indirectly (i.e.,
derived from prices). This level includes instruments valued using: quoted
prices for identical or similar instruments in markets that are considered
less than active; quoted market prices in active markets for similar
instruments; or other valuation techniques in which all significant inputs are
directly or indirectly observable from market data.
● Level 3: Inputs that are not based on observable market data
(i.e., unobservable inputs). This level includes all instruments for which the
valuation technique includes inputs not based on observable data and the
unobservable inputs have a significant effect on the instrument's valuation.
The table below analyses financial instruments measured at fair value at the
reporting date by the level in the fair value hierarchy into which the fair
value measurement is categorised. The amounts are based on the values
recognised in the statement of financial position. All fair value measurements
below are recurring.
Level 1 Level 2 Level 3 Total
USD USD USD USD
As at 31.12.23
Financial assets classified at fair value upon initial
recognition
Investments in securities 120,510,213 - 120,510,213
As at 30.06.23
Financial assets classified at fair value upon initial
recognition
Investments in securities 113,225,102 - - 113,225,102
There were no transfers between levels during the period.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined based on the lowest level input
that is significant to the fair value measurement in its entirety. Assessing
whether an input is significant requires judgement including consideration of
factors specific to the asset or liability. Moreover, if a fair value
measurement uses observable inputs that require significant adjustment based
on unobservable inputs, that fair value measurement is a Level 3 measurement.
8 Basic and Diluted Earnings per Share
The calculation of basic and diluted earnings per share at 31 December 2023
was based on the change in net assets attributable to ordinary shareholders of
USD 8,904,430 (period ended 31 December 2022: USD (21,831,338)) and the
weighted average number of shares outstanding of 27,481,368 (period ended 31
December 2022: 28,991,146).
9 Subsequent Events
There were no other material events that require disclosure and/or adjustments
in these financial statements.
Director Profiles
Hiroshi Funaki (Chairman)
Mr Funaki has been actively involved in raising, researching and trading
Vietnam funds since 1995. He worked at Edmond de Rothschild Securities from
2000 to 2015 where he led the Investment Companies team, focusing on Emerging
Markets and Alternative Assets. Prior to that he was Head of Research at
Robert Fleming Securities, also specialising in closed-end funds. He currently
acts as an investment adviser to a Family Office. He has a MA in Mathematics
and Philosophy from Oxford University.
Philip Scales (Audit and Risk Committee Chairman and Management Engagement
Committee Chairman)
Mr Scales has over 40 years' experience working in offshore corporate, trust,
and third-party fund administration. For 18 years, he was managing director of
Barings Isle of Man (subsequently to become Northern Trust) where he
specialised in establishing offshore fund structures, mainly in the
closed-ended arena (both listed and unlisted entities). Mr Scales subsequently
co-founded FIM Capital Limited where he is Group Chairman. He is a Fellow of
the Institute of Chartered Secretaries and Administrators and holds a number
of directorships of listed companies and collective investment schemes.
Saiko Tajima (Remuneration and Nomination Committee Chairman and
Environmental, Social and Governance Committee Chairman)
Ms Tajima has over 20 years' experience in finance, of which 8 years have been
spent in Asian real estate asset management and structured finance. Working
for Aozora Bank and group companies of Lehman Brothers and Capmark, she
focused on financial analysis, monitoring and reporting to lenders, borrowers,
auditors, regulators and rating agencies. Over the last 8 years, she has
invested in and helped develop tech start-ups in Tokyo, Seoul and Sydney. She
is a Certified Public Accountant in the US.
Key Parties
Directors Investment Manager
Hiroshi Funaki Dynam Capital, Ltd
Philip Scales 1 Royal Plaza
Saiko Tajima Royal Avenue
St Peter Port
Guernsey
GY1 2HL
Registered Office, Sub-Administrator,
Company Secretary and Administrator Custodian and Principal Bankers
Sanne Group (Guernsey) Limited Standard Chartered Bank (Singapore) Limited
1 Royal Plaza 7 Changi Business Park Crescent
Royal Avenue Level 3, Securities Services
St Peter Port Singapore 486028
Guernsey
GY1 2HL
Corporate Broker and Financial Adviser UK Legal Adviser
Cavendish Securities plc Stephenson Harwood LLP
(As from 8 September 2023, formerly finnCap Ltd)) 1 Finsbury Circus
One Bartholomew Close London
London EC2M 7SH
EC1A 7BL
(Nominated Adviser (AIM) until transference to LSE Main Market)
Market Researcher Guernsey Legal Adviser
Dynam Consultancy and Services Company Limited Guernsey Legal Adviser
Floor 12, Deutsches Haus, Carey Olsen (Guernsey) LLP
33 Le Duan, Carey House
Ben Nghe Ward, District 1 Les Banques
Ho Chi Minh City, St Peter Port
Vietnam Guernsey
GY1 4BZ
Registrar Auditor
Computershare Investor Services (Guernsey) Limited KPMG Channel Islands Limited
1st Floor, Tudor House Glategny Court
Le Bordage Glategny Esplanade
St Peter Port St Peter Port
Guernsey Guernsey
GY1 1DB GY1 1WR
1 (#_ftnref1) Long-term holders of shares (more than two years) can redeem
with no redemption fee. Shares held less than one year (but more than six
months) can be redeemed with a charge of 3%, between one year and two years
the charge is 2%. Redemption fees are paid to the Fund, benefitting remaining
shareholders.
2 (#_ftnref2) Source: 'Google, Temasek and Bain, e-Conomy SEA 2023'
3 (#_ftnref3) Source: Associated Press, 21 January 2024
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. END IR SFSFAWELSESDRecent news on VietNam Holding
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AnnouncementREG - VietNam Holding Ltd - Estimated Daily Net Asset Value
AnnouncementREG - VietNam Holding Ltd - Estimated Daily Net Asset Value
AnnouncementREG - VietNam Holding Ltd - Estimated Daily Net Asset Value
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