Monthly Investor Report

RNS Number : 3076V

VietNam Holding Limited

10 January 2013

 



VietNam Holding Limited (the "Company")

Investor Report

A report detailing the activities of the Company for the month of December 2012 has been issued by VietNam Holding Asset Management Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website at http://www.vietnamholding.com/latest-publications.aspx and a summary of the report is included below.

Investor Report Summary

Vietnam News

2012 was an eventful year in Vietnam - GDP growth for the full year figure was 5.03%, down from 5.89% in 2011 and 6.78% in 2010.  The government is aiming for GDP growth of 5.5% in 2013.

Inflation for the full year was a welcome 6.81% (down from 18.13% in 2011), thereby allowing the State Bank to reduce key interest rates by 100bps shortly before Christmas.  This was the fifth reduction in interest rates during the year.  Lending growth in 2012 was just 7% compared to 11% in 2011.

There were a number of pleasant surprises in 2012.  The Vietnam Dong actually appreciated very slightly against the greenback, to end the year at around 20,800.  This was due in part to a much improved trade balance, and the first trade surplus, of US$284m, in twenty years.

VietNam Holding Insights

VietNam Holding's NAV per share rose by 20.2% to USD 1.320 as of year-end. Our two main investment themes continue to be the main drivers of our benchmark outperformance. The domestic consumption portfolio value increased by 43.5% last year, while the agriculture portfolio increased by 30.1%.

The overall market's annual performance of 17.7% for the VNI can mostly be attributed to the large-caps, namely the 35 companies which make up 80% of the total market valuation. The share price of these large-caps increased by an aggregate 20.6%. Their weighted average trailing P/E is 16.84x, well above the VNI's 11.49x.  By contrast, the 279 listed companies, which make up the remaining 20% of the VNI, saw an average share price increase of a meagre 6.1% and have an average P/E of 5.1x. Or in other words: the 35 large-caps together made only 7.6% more profits than all the 279 smaller companies combined, but the large-caps' shares increased by over 3 times as much as the small and mid-cap's. This wide valuation disparity between large and small/mid caps listed on HOSE reflects the combination of the domestic investor being drawn to the well-known and thus mostly large companies and foreigners' bias towards large-caps.

In VNH's portfolio, 9 companies are large-caps and make up 41% of the portfolio value. Their weighted average trailing P/E is 9.00x, substantially less than the average 16.84x for their large cap peers. The remaining 17 small and mid-cap companies, which make up 54% of VNH's holdings, have an average trailing P/E of 5.89x. The fact that VNH has outperformed the VNI by 2.5% in 2012 is a credit to our theme selections, which make up 70% of our portfolio. It also validates our mid and small-cap centric approach. Furthermore, our asset allocation continues to result in an attractive overall trailing portfolio P/E of 7.22x, a full 37% below the overall markets.

For more information please contact:
VietNam Holding Asset Management Limited
Gyentsen Zatul	Telephone: [phone]
- Investor Relations
Oriel Securities Limited (Nominated Adviser and Broker)
Joe Winkley	Telephone: [phone]

 

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