RCS - Vietnam Enterprise - Quarterly Insights

Vietnam Enterprise InvestmentsAnnouncement

12/02/2026 07:02

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RNS Number : 7503S  Vietnam Enterprise Investments Ltd  12 February 2026

12 February 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 2026, From Reform to Delivery

Tuan Le, Lead Portfolio Manager

 

As we begin the Year of the Horse, our base case is that it will be a year
when fundamentals reassert themselves. Earnings growth is expected to remain
supportive, and the market should increasingly reward outcomes. Following the
conclusion of the January 2026 Party Congress, which marks the beginning of
the next five-year term, the strategic direction is clear. The hard work will
be turning this intent into results.

Vietnam enters 2026 with an enviable combination that is not common across
emerging markets: a stable macro backdrop, contained inflation, broad-based
profit recovery, and an explicit push to improve both physical infrastructure
and equity market plumbing. Macro stability remains supportive, with USD/VND
expected to remain broadly stable and inflation below 4%. External volatility
will remain, but the centre of gravity will shift back to company outcomes and
fundamentals.

For an active manager, that is the environment we wait for. It is also why we
are more optimistic about 2026 than at any point in recent years, because the
return potential is less dependent on macro surprises and more on what
companies can prove in earnings, margins, and cash conversion.

Macro stability, earnings breadth, and market plumbing

Vietnam's growth model can be summarised as coordination rather than
concentration, aligning state capacity, private enterprise, and foreign
capital within a clearer framework. From an active equity perspective, three
signals matter most:

·    The investment cycle is becoming central to the growth model. Public
investment, if implemented consistently, does two things that are
equity-relevant. It lifts near-term demand through infrastructure, logistics,
and industrial activity. It also raises productivity over time by lowering
friction costs and improving the return on private capital. As policy moves
from intent to throughput, dispersion rises, and stock selection matters more
than sector calls. For VEIL, the opportunity is not in chasing headline
beneficiaries, but in owning the businesses where value accrues and cash
conversion is credible.

·    Earnings are the anchor. The VN-Index 4Q25 results were among the
strongest on record, with NPAT rising 45% YoY. For full-year 2025, NPAT rose
27% and revenue expanded 15%. Looking ahead, sustained NPAT growth of 16 - 18%
is expected in 2026. In our experience, a broad earnings cycle is a more
reliable support for valuation than any single macro indicator. That matters
for VEIL because earnings breadth expands our investible universe materially,
and it allows us to build conviction positions beyond the usual index leaders,
where mispricing can be larger and persistence can be higher.

·    The market's mechanics are improving, gradually but meaningfully. For
global investors, the most important change is that the market is becoming
easier to access and more reliable to operate in. Shortening the
IPO-to-listing timeline to 30 days is one example. Work to improve clearing
and settlement is another, because it strengthens confidence in the trading
process itself. None of this changes the investment case overnight, but it
does help reduce friction, support liquidity, and improve price discovery.

How this translates into VEIL's portfolio

We would frame our positioning through three lenses.

·    Banks as the transmission mechanism. If Vietnam sustains healthy
credit growth with improving asset quality, banks remain central to the
earnings cycle. But "banks" is not a view, the question is which franchises
can compound book value through disciplined provisioning, stable funding, and
consistent fee income. We prefer banks with clear competitive advantages,
improving capital positions, and sound risk control. That preference is
reflected in VEIL's overweight exposure to leading banks, including positions
in VP Bank, BIDV, Vietinbank, Techcombank and Vietcombank.

·    Domestic consumption. We focus on businesses where the path to profit
is visible through market share gains, unit economics, and operational
performance. In consumer sectors, a small number of winners often take
disproportionate value, and the market can underestimate the duration of that
advantage. This is why we like businesses where earnings momentum can be
underwritten through tangible drivers, rather than sentiment, and why Mobile
World is one of our top holdings, where scale and execution matter more than
narrative.

·    Investment cycle beneficiaries. Infrastructure and industrial
upgrading are priorities, but the equity outcome depends on where value
accrues. We favour companies with visible revenue, repeatable project
delivery, and the ability to protect margins when input costs or timelines
move. Working capital discipline is critical. A growing order book is only
valuable if it converts into cash without destroying returns.

Risks that could change the view

The risks we are watching are policy follow-through, external conditions, and
earnings durability.

·    Public investment throughput risk. The investment-led framework
depends on on-the-ground progress, not announcements. If disbursement lags
meaningfully, second-order beneficiaries will disappoint and confidence in the
broader cycle could weaken.

·    FX and global liquidity. Vietnam can tolerate volatility, but a sharp
tightening in global funding conditions, or an external shock that hits
exports, would quickly feed through to sentiment, imported inflation, and
valuation support.

·    An earnings cycle that proves less durable than the market now
expects. If margins compress materially or demand weakens, the re-rating case
becomes harder to sustain. This is why we focus on balance sheet strength and
pricing power, because they give companies options when conditions tighten.

Conclusion

2026 is more likely to reward outcomes over narrative. For the portfolio, that
means staying concentrated in businesses with visible earnings, resilient
balance sheets, and attractive valuations. We are optimistic because earnings
breadth is improving, dispersion is rising, and the market backdrop
increasingly suits what VEIL is built to do - own high-quality companies that
can perform through the cycle.

Top Ten Holdings (51.8% of NAV)

      Company           Sector             NAV Weight %  VNI Weight %  Weight vs Index %  FY 2025

                                                                                          Return %
 1   Vingroup          Real Estate         9.1           15.7          (6.6)              710.8
 2   Vinhomes          Real Estate         8.1           6.1           2.0                200.5
 3   Mobile World      Consumer Disc.      7.7           1.6           6.1                42.5
 4   VP Bank           Financials (Banks)  4.9           2.7           2.2                48.5
 5   BIDV              Financials (Banks)  4.7           3.3           1.4                1.6
 6   Vietinbank        Financials (Banks)  3.9           3.3           0.6                33.7
 7   Techcombank       Financials (Banks)  3.7           3.0           0.7                40.9
 8   Vietcombank       Financials (Banks)  3.4           5.8           (2.4)              (8.0)
 9   Khang Dien House  Real Estate         3.3           0.4           2.9                (7.0)
 10  Hoa Phat Group    Materials           3.0           2.4           0.6                15.2

      VEIL NAV         -                   -             -             -                  24.5
      Vietnam Index    -                   -             -             -                  38.8

 

Source: Bloomberg, Dragon Capital

NB: All returns are given in total return USD terms as of 31 December 2025

 

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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