REG - Vietnam Enterprise - Monthly Update

Vietnam Enterprise InvestmentsAnnouncement

15/04/2024 07:00

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RNS Number : 5908K  Vietnam Enterprise Investments Ltd  15 April 2024

15 April 2024

 

Vietnam Enterprise Investments Limited

("VEIL" or "the Company")

 

Monthly Update

 

VEIL is a London-listed investment company investing primarily in listed
equities in Vietnam and a FTSE 250 constituent. The Company's unaudited
performance for March 2024 to 28 March*, in which NAV per share rose 3.0% (in
USD terms), is set out in this notice.

 

Tuan Le, Lead Portfolio Manager of VEIL commented:

 

"VEIL's NAV increased 3.0% in USD terms in March, driven mainly by a
resurgence in the retail (+10.5%) and mid-cap property (+10.7%) sectors. This
led to a 0.5% gain over the Company's reference index, the Vietnam Index
("VNI"), which rose despite facing several obstacles in March.

 

"On 18 March, the VNI declined 1.6%, around rumours that Vietnam's President
would resign following Party regulatory violations, which was confirmed on 20
March. Prior to the official confirmation, major foreign news agencies had
speculated upon the resignation. Thus, when the news was officially confirmed,
it did not come as a surprise. Historically, domestic investors typically do
not overreact to personnel changes; if they do, it is only in the short term.
The market brushed this event aside, rising 3.5% from 19 to 28 March.

 

"The event can be seen in the context of the ongoing efforts and determination
of the General Secretary of Vietnam to maintain the Party's integrity above
all else. While leadership transitions pose challenges, Vietnam's business
environment and economic activities have historically proven resilient.

 

"Vietnam recorded 5.7% GDP growth in Q1 2024, the highest first-quarter
expansion in five years. The industrial sector was a large contributor to this
growth, up 6.2%, with exports rising 17.0% year-on-year in the first quarter
and imports increasing by 13.9%. The services sector rose by 6.1%
year-on-year, revealing dispersion in the economic recovery, with
domestic-oriented sectors lagging export industries. Meanwhile, as Chinese
tourists returned, tourism-related services maintained an upward trajectory as
quarterly inbound visitors reached 4.6 million. This marks a 72% year-on-year
increase and is 3.2% above Q1 2019 levels.

 

"The State Securities Commission of Vietnam published a draft circular
proposing the removal of prefunding requirements. It also mandated English
language disclosures for large public companies by January 2025, a significant
step towards satisfying transparency criteria for emerging market index
inclusion. This initiative has garnered preliminary approval from both the
World Bank and FTSE Russell for its potential to ease market frictions and
attract international capital.

 

"Dat Xanh Group ("DXG") (+7.8% in March; 2.1% of NAV), a major residential
property developer, benefitted from the midcap property recovery in March,
aligning with our expectations for the sector's rebound. This was driven by
the anticipated early implementation of the amended Land Law and government
initiatives to streamline land clearance processes. Our analysis suggests a
turning point for the company, with flagship projects Gem Skyworld and Gem
Riverside, collectively comprising c.4,500 units in HCMC, acting as near-term
share price catalysts. We forecast 2024 pre-sales of approximately US$150mn, a
stark contrast to almost zero in 2023. Residential projects are slated to
deliver another c.6,000 apartments in the next three years. Together, these
projects underpin DXG's vision for sustained growth, balancing immediate
profitability with long-term value creation."

 

 VEIL Performance

*All quoted data as of 28 March due to a public holiday on 29 March.

 

·    As of 28 March, VEIL's NAV increased by 3.0% over the previous month
against a gain of 2.5% for its reference index, the Vietnam Index ("VNI"),
both in total return USD terms. The Company's NAV per share was US$9.60 and
its total NAV was US$1.9bn.

·    VEIL's share price increased 0.5% in March and 5.4% year-to-date,
both in USD terms.

·    VEIL's three-month NAV per share performance in USD terms is +10.7%,
+15.9% over one year and +2.9% over three years. Over the same time periods,
the performance of the VNI was +12.0%, +16.7% and +5.4%, respectively.

·    In GBP terms, VEIL's NAV increased 3.1% over the previous month and
11.7% year-to-date. The Company's NAV per share was £7.60 as of 28 March and
its total NAV was £1.5bn. The GBP share price increased by 0.7% for the month
and 6.3% year-to-date.

·    The share price discount to NAV as of 28 March increased to 22.1%,
compared with 20.2% at the end of February. On 31 December 2023 the discount
was 18.1%.

·    The Company purchased 1,596,935 shares in March, compared with
740,269 shares purchased in February. Year-to-date to 28 March, 2,723,307
(1.4% of shares outstanding as of 1 January 2024) were purchased.

The accretion to NAV per share from the share purchases was 0.34% year-to-date
to 28 March.

·    The VND depreciated 0.6% against the USD in March and 2.1%
year-to-date. The VND depreciated 0.1% against the GBP in March and 1.3%
year-to-date.

 

 

Top Ten Holdings (59.6% of NAV)

 

     Company                  Sector               NAV %  VNI %  Weight vs Index %  Monthly Return %  One-year Return %
 1   Hoa Phat Group           Materials/Resources  9.4    3.4    +6.0               -2.0              40.0
 2   Asia Commercial Bank     Banks                8.8    2.1    +6.7               0.7               31.6
 3   Vietnam Prosperity Bank  Banks                8.4    3.0    +5.4               -1.8              -6.8
 4   Vietcombank              Banks                7.0    10.2   -3.2               -2.2              16.8
 5   FPT Corporation          Software/Services    6.6    2.8    +3.8               6.8               65.0
 6   Techcombank              Banks                4.6    3.2    +1.4               13.1              65.3
 7   Mobile World Group       Retail               4.6    1.4    +3.2               9.8               24.9
 8   Military Bank            Banks                3.7    2.5    +1.2               5.0               58.4
 9   SSI Corporation          Brokerage            3.4    1.1    +2.3               5.2               85.5
 10  PetroVietnam Gas         Energy               3.3    3.5    -0.2               3.2               -8.7

     Vietnam Index            -                           -                         2.5               16.7

Source: Bloomberg, Dragon Capital

NB: All returns are given in USD terms to 28 March 2024

 

 

For further information, please contact:

 

Vietnam Enterprise Investments Limited

Rachel Hill

+44 122 561 8150

+44 797 121 4852

rachelhill@dragoncapital.com (mailto:rachelhill@dragoncapital.com)
 

 

Jefferies International Limited

Stuart
Klein

+44 207 029 8703

stuart.klein@jefferies.com (mailto:stuart.klein@jefferies.com)

 

Buchanan

Charles Ryland / Henry Wilson / George Beale

+44 20 7466 5111

veil@buchanan.uk.com (mailto:veil@buchanan.uk.com)

 

h2Radnor

Iain Daly

+44 20 3897 1830

idaly@h2radnor.com (mailto:idaly@h2radnor.com)

 

 

LEI: 213800SYT3T4AGEVW864

 

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