REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

18/04/2023 10:00

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RNS Number : 5869W  VietNam Holding Limited  18 April 2023

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

Monthly Investor Report

A report detailing the activities of the Company for the month of March 2023
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
(https://www.vietnamholding.com/media/eutpch4z/vnh-investor-report-march.pdf)
 and a summary of the report is included below.

Manager Commentary - the tides of March

Vietnam ended March on a good note, with a US$4 bn trade surplus for Q1 2023,
even though its exports growth was not as high as in previous months. It also
continued to strengthen global trade ties, with the US secretary of state,
Antony Blinken having just been in Hanoi to see Prime Minister Pham Minh Chinh
and other top government officials about enhancing economic cooperation
between the two countries. "This is one of the most dynamic and one of the
most important relationships we've had," Blinken said in a news conference
capping a day of engagements with ministers.

 

Closer to home, Vietnam signed more memoranda of understandings (MoUs) to
upgrade its bilateral ties with Singapore. These MoUs cover a range of
collaborations on trade, advancing the green-digital economy and maritime and
port cooperation. The most recent MoU will progress implementation activities
for 2023, including the facilitation of Singaporean companies' investment in
Vietnam's agriculture and logistics sector. It also promotes further
collaboration in liquified natural gas, renewable energy, and electricity
projects.

 

In addition, the first quarter of 2023 saw a new wave of Japanese retailers
expanding their presence in Vietnam. These firms saw how total retail sales of
consumer goods and services in Vietnam increased by 19.8% last year in the
face of inflationary pressures and economic uncertainty and want to get a
first-mover advantage in the market, even though the sector's streak has since
slowed.

 

Another appealing factor for Japanese brands is that Vietnam plans to ease
foreign investment restrictions in a variety of sectors by 2024, as per its
membership of the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership, and this includes rules regarding "the opening of more retail
points".

 

Equity markets were less volatile than the month before and reacted positively
to the State Bank of Vietnam's reduction of policy rates to help spur the
economy. VNH's NAV rose 5.1% mainly due to its overweight in banks (STB, up
11.8%; MBBank up 7.2% and Vietinbank up +8%) and industrials (Idico, up +8.2%
and Gemadept, up +6.7%). PNJ (+2.4%), one of our biggest holdings, remained
resilient and we expect domestic consumption to continue to grow in 2023, just
at a slower pace.

 

In terms of our market outlook, we anticipate divergence of earnings per share
(EPS) growth increasing among sectors and stocks, with more upside than
downside risks since many listed companies conservatively recorded provisions
for losses in Q4 2022. At the portfolio level we are forecasting a 27% growth
in full year earnings per share at an undemanding P/E ratio of 8.5x.

 

The government's range of economic initiatives, rising incomes and
middle-class expansion will continue to support growth this year, and we
expect pockets of opportunities to emerge across sectors. For instance, plans
to make Vietnam a major assembler in the semiconductor supply chain have been
attracting more interest recently. Taiwan's dominance in chip production has
raised concerns about over-concentration and geopolitical risks and Vietnam
has many advantages. Not only do semi-conductor companies that invest in the
country receive tax incentives and other benefits, but because Vietnam has a
lower cost of living than Taiwan, factory setup is much cheaper. Vietnam's
workforce is another benefit that major chip makers have been taking notice of
given its abundance of science and engineering graduates. Plus, the government
has already invested billions on research and education centres to train
workers in this sector, which will catch more attention from foreign
companies.  This is one opportunity for Vietnam to increase the value-added
nature of its manufactured goods for export.

 

Last month we hosted a webinar on the outlook for the retail sector and were
pleased to have PNJ present on the fast-growing jewellery sector. A copy of
the presentation is available on the website. Next month we are sponsoring the
inaugural ESG investor conference in Ho Chi Minh City. Details are available
here (https://vietcetera.com/en/collection/vietcetera-raise-esg-conference-en)
.

 

We thank all our investors for their continued support and interest in the
Fund.

 

 

 

 

 

 

 

 

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

Corporate Broker and Financial Advisor
                                 Tel: +44 20
7220 0500

William Marle

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