RCS - Vietnam Enterprise - Quarterly Insights

Vietnam Enterprise InvestmentsAnnouncement

21/05/2026 07:00

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RNS Number : 2478F  Vietnam Enterprise Investments Ltd  21 May 2026

21 May 2026

Vietnam Enterprise Investments Limited

("VEIL" or the "Company")

Quarterly Insights

VEIL is a London-listed investment company investing  primarily in listed
equities in Vietnam and is a FTSE 250 constituent.

Vietnam's Energy Stress Test

Tuan Le, Lead Portfolio Manager

 

Vietnam has just absorbed what the IEA called one of the largest oil supply
disruptions in the history of the global oil market.

Domestic gasoline rose 50% and diesel 70% in the first three weeks of the
shock. The institutional response was fast, coordinated and structural. Q1
corporate earnings accelerated through the shock; equity prices did not. The
question now is whether that gap closes or widens, and to what extent energy
decides that path.

Anatomy of the response

Vietnam entered the shock without optionality. The country imports 50 - 60% of
its crude demand, with Kuwait accounting for around 86% of 2025 crude, and the
Nghi Son refinery sourcing all of its feedstock from the Middle East.

The response was fast. The National Task Force on Energy Security was set up
by the Prime Minister in just four days. In most emerging markets, this would
have taken weeks.

It was coordinated. On supply, domestic LPG output was lifted by 5%, Binh
Son's Dung Quat refinery ran above 100% capacity, and PetroVietnam proposed
halting crude exports. On price, the Stabilisation Fund was deployed across
five consecutive cycles from 7 March, Decree 72 cut refined-product import
tariffs to 0%, and fuel taxes were cut to 0% through 30 June. On demand,
work-from-home guidance was issued and the E10 bioethanol rollout was pulled
forward to 30 April. Diplomacy ran in parallel: Gulf phone calls within ten
days, Japan's pledge to provide access to 1.2bn barrels of crude under its
POWERR Asia regional energy-resilience initiative, and an accelerated
Vietnam-UAE Strategic Partnership. Few peers could have moved this many levers
in concert.

It was structural. The LPG sourcing pivot to the US and Australia, Binh Son's
capacity increase, the rerouting of crude away from the Strait of Hormuz, and
an accelerated build-out of strategic petroleum reserves are not workarounds.
They are a restructuring of Vietnam's energy supply chain that should outlast
the conflict. Vietnam will be less Hormuz-dependent after this than before,
and for global allocators weighing the country's external risk premium, that
is the part that matters.

Fundamentals firmer, prices weaker

The shock has left a footprint. April CPI rose 5.5% YoY, the first hard
evidence that lagged pass-through has begun. The 4M average sits at 4.0%,
below the government's 4.5-to-5.0% ceiling, but that cushion exists because
the early months ran cool, and it compresses if oil stays elevated. Vietnam's
policy buffers, including the tariff cut and the fuel-tax extension, expire at
end-June. If the conflict escalates, second-round inflation, FX, and interest
rate pressure could materialise.

Vietnam's growth phase appears to have accelerated through the shock.
Industrial production rose 9.9% YoY in April, FDI hit a five-year high, and Q1
corporate earnings rebounded sharply, with Dragon Capital's Top-100 coverage
universe reporting positive earnings growth across 69 out of 100 names.

Equity prices did not echo this. The Vietnam Index fell 6.2% in Q1 in USD
total return terms, with VEIL broadly in line at -6.5%. April's 10.7% Index
rally was extremely narrow, concentrated in Vingroup and Vinhomes, where the
portfolio is underweight, with VEIL's NAV trailing the rally for that reason.

What this means for VEIL

VEIL's sector preferences remain infrastructure, banking, domestic consumption
and retail, and real estate, each aligned to the investment-led growth phase
Q1 data has begun to confirm.

Infrastructure is the most directly supported, with public investment
disbursement up 10.4% YoY in 4M26 and the manufacturing cycle broadening into
investment-linked sectors, such as chemicals, metals, non-metallic minerals,
and motor vehicles, all delivering double-digit growth in April. Banking, the
largest portfolio weighting, has been rebalanced toward stronger funding
profiles to absorb the indirect transmission risk from inflation, FX, and
rates.

Credit demand at the SME end is supported by a 50.7% YoY rise in new business
formation; dispersion is surfacing in asset quality, but bank earnings remain
the largest single anchor of aggregate corporate profit.

Consumption and retail continue to grow at double-digit rates, with retail
sales and services revenue up 11.1% YTD and tourism-related services up 12.1%,
while real wages remain the Q2 watch as inflation pass-through builds. Real
estate is where tactical positioning sits apart from structural conviction;
developer weights were trimmed against rates and liquidity, but the investment
case is intact, and the sector becomes a candidate for re-engagement as
conditions normalise.

Vietnam's institutional response to the oil supply disruption demonstrates the
kind of state capacity that should, in our view, compress the country's
external risk premium over time. On the evidence so far, the response has
bought the macro the time it needed, and we read the Q1 dislocation as more
likely to resolve through price catch-up if external conditions stabilise.

Provided the conflict's risks do not deepen, VEIL is positioned to benefit
over the rest of the year. With the portfolio trading at 10.7x FY26 earnings
against 25.5% EPS growth at end-April, we have begun deploying elevated cash
into recent weakness.

Top Ten Holdings (47.5% of NAV)

      Company          Sector                   NAV Weight  VNI Weight          Weight vs VNI  YTD 2026     1-Year Rolling

                                                (%)         (%)                 (%)            Return (%)   Return (%)
 1   Mobile World      Consumer Discretionary   8.3                1.5          6.8               (7.6)     36.5
 2   BIDV             Financials (Banks)        7.3                3.5          3.8               1.1       (0.2)
 3   VP Bank          Financials (Banks)        4.6                2.7          1.9               (7.0)     40.1
 4   Vietinbank       Financials (Banks)        4.5                3.4          1.1               (3.4)     18.1
 5   Vingroup         Real Estate               4.5                13.2         (8.7)             (20.5)    351.8
 6   Vinhomes         Real Estate               4.2                 5.4         (1.2)             (17.1)    94.9
 7   Techcombank      Financials (Banks)        3.8                2.8          1.0               (12.2)    11.2
 8   Vietcombank      Financials (Banks)        3.6                6.2          (2.6)             0.9       (11.3)
 9   Hoa Phat Group   Materials                 3.6                2.6          1.0               1.7       17.1
 10  MB Bank          Financials (Banks)        3.1                2.7          0.4               4.4       41.8

      VEIL NAV        -                         -           -                   -              (6.5)        17.2
      Vietnam Index   -                         -           -                   -              (6.2)        25.6

 

Source: Bloomberg, Dragon Capital

All returns are given in total return USD terms as at 31 March 2026

 

For further information, please contact:

Vietnam Enterprise Investments Limited

Steven Mantle

+44 75537 01237

stevenmantle@dragoncapital.com

 

Jefferies International Limited

Stuart
Klein

+44 207 029 8703

stuart.klein@jefferies.com

 

Montfort

Gay Collins

+44 (0)7798 626282

+44 (0)20 3770 7905

gaycollins@montfort.london

 

h2Radnor

Iain Daly

+44 20 3897 1830

idaly@h2radnor.com

 

LEI: 213800SYT3T4AGEVW864

 

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