REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

11/02/2020 07:10

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RNS Number : 5976C  VietNam Holding Limited  11 February 2020

VietNam Holding Limited ("VNH" or the "Company")

Monthly Investor Report

A report detailing the activities of the Company for the month January 2020
has been issued by Dynam Capital Limited, the investment manager of the
Company. Electronic copies of the report have been made available to
shareholders on the Company's website
(http://vietnamholding.com/sites/default/files/investor_reports/VNH%20Investor%20Report%20-%20Jan%202020%20Final.pdf)
 and a summary of the report is included below.

Investor Report Summary

The Fund's Net Asset Value per share declined by 5.6% in January,
underperforming the Vietnam All-Share Index which fell by 3.6%. January had
started well, and optimism ahead of the Lunar New Year (Tet) holiday took the
markets to a two-month high,  but the spread of the coronavirus (nCoV) from
China spooked Vietnam's equity markets and over the two trading days at the
end of the month, the markets fell by 6.1%.  The Vietnam stock markets were
in their infancy during the SARS outbreak in 2003, which had a significant
impact on Vietnam and South East Asia as a whole, so comparisons are hard to
make. Train and road travel across Vietnam's northern border with China has
been curtailed as have international flights between the two countries. The
airline and tourism sectors are likely to be hit hard for as long as such
travel bans are in place, but other short-term and mid-term impacts are more
difficult to discern in any meaningful way at this stage. That said,
valuations and fundamentals matter less to domestic investors in Vietnam than
the fear of the unknown, and volatility may continue for some time.

There were only a few positive performers in the month, with Saigon Cargo
Services (5.9% NAV) and Thien Long Group (3.9% NAV) rising by 5.3% and 2.4%
respectively. The increases are after several months of declines in these two
stocks (they declined by 12.9% and 25.5% respectively in 2019) despite having
robust and stable customer bases. Some of the Fund's larger holdings were also
caught in the broader selloff: FPT (12.5% NAV) fell 11.0%, Khang Dien House
(5.9% NAV) fell 7.3% and Dat Xanh Group (4.0% NAV) fell 20.5%.

Prior to adjusting for any impact of the Coronavirus, we forecasted an EPS
growth of around 17.1% for the portfolio holdings in 2020. Single-digit
Price/Earnings Ratios of 9.7x for 2020 and 7.8x for 2021 mean that there is
some buffer for any slow-down in earnings' growth. People are getting back to
work after the start of the Lunar New Year (the Rat) and businesses will begin
to review their plans and strategies. We have already met with several of our
portfolio companies this year and core growth in the portfolio remains strong,
however we will continue to closely monitor the developments.

We are looking to compose and manage a portfolio that we hope will reward
investors for their patience in the next three to five years, as growth
compounds.  In addition, we continue to emphasise the benefits of good ESG
standards to our portfolio companies, and we are pleased to see many of them
improving their transparency through better Investor Relations, provision of
training for board members, and seeking ways to address climate change.

For more information please contact:

Dynam Capital Limited

Craig
Martin
Tel: +84 28 3827 7590

 

info@dynamcapital.com (mailto:info@dynamcapital.com) |www.dynamcapital.com
(http://www.dynamcapital.com)

 

www.vietnamholding.com (http://www.vietnamholding.com/)

finnCap

Nominated Adviser and Corporate Broker
                              Tel: +44 20 7220
0500

William Marle / Giles Rolls

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