Monthly Investor Report

RNS Number : 2368Z

VietNam Holding Limited

13 September 2022

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of August 2022 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  and a summary of the report is included below.

Manager Commentary - A Brief History of Time

The last few weeks alone have shown how events, whether they be the passing of world leaders or national days of celebration, can cause reflection on the past and present, and in Vietnam's case consider how this brief period of time has put the country's unique growth into context. On September 2nd the country joyfully celebrated the 77th anniversary of when its revolutionary leader Ho Chi Minh declared independence from colonial powers. A far cry from last year's National Day, which was dimmed by the Delta variant and related restrictions, this year's commemoration reminded many of 'Doi Moi', the open-door policy introduced during the National Party Congress in 1986, and how it has contributed to the country's renowned resilience and growth evident even throughout the pandemic. By no coincidence 1986 was also the year when Mikhail Gorbachev, the last leader of the Soviet Union, introduced his Glasnost and Perestroika reforms. His death last month was a reminder of how fast the winds of change can blow and puts Vietnam's rapid ascent as a global trade and manufacturing hub into context.

While Vietnam has faced its fair share of bumps and setbacks, it has managed to become one of the most open economies in the world as well as one of the few to pave a strong road to recovery in what continues to be an unprecedentedly volatile 2022. August was no exception. As rising inflationary risks, extreme weather and various disruptions stemming from the war in Ukraine continued to escalate global headwinds, Vietnam made its way through the month with further import and export growth and an increasing number of new manufacturing projects announced.

Vietnam's equity market also managed to recover in August and appeared relatively resilient to global shocks, with Q2 earnings growth leading to even more attractive valuation levels.  VNH's NAV was up +4.4% with a notable recovery of retail stocks in the portfolio, MWG, PNJ and DGW. MWG, which is primarily active in computer and electronics retailing made a whopping 21% return in August. The efficient restructuring of its Bach Hoa Xanh (BHX) stores, a key driver of MWG's success, has been right on track and the firm's management expects the grocery chain to reach EBITDA break-even by the end of 2022. A potential future IPO of BHX could trigger a rerating of the whole group. Banking stocks, the biggest sector in the portfolio, also performed well, and we expect that to continue into 2023 thanks to their attractive valuation and stable growth.

August also highlighted Vietnam's foreign investment in manufacturing tech products, with new projects set up by the likes of Apple, Foxconn and South Korean conglomerates such as Samsung and Lotte proving the country's climbing status in the global value chain. Apple continues to move more production from China to Vietnam and in August Foxconn, a key Apple supplier, leased 50.5 hectares of land in Bac Giang Province with plans to build a US$300m factory employing up to 30,000 workers.

Vietnam recorded a US$3.96bn trade surplus for the first eight month of 2022 and continues to gain more share in the global export market considering its more attractive position relative to many neighbouring nations and its successful vaccination rollout and policy directions on environment and corporate governance. From a macro perspective, Vietnam has crucially managed to weather the inflation crisis better than some nations partly due to the fact that it consumes less energy than most Western countries and since 50% of its energy mix is made up of domestically sourced renewables, including hydro, solar and wind, and natural gas. John Kerry, the US's special presidential envoy for climate, recently visited Vietnam again to meet with government officials and business leaders to build consensus on key actions to address the climate crisis and accelerate the transition to a clean energy economy. Updating the country's infrastructure in this respect will require collective action and remain a critical priority as Vietnam continues to both progress its goal of becoming a modern industrialised economy and seeking to fulfil its commitment to be Net-Zero by 2050.

For more information please contact:

Dynam Capital Limited  

Craig Martin  Tel: [phone]

[e-mail] | www.dynamcapital.com

www.vietnamholding.com

finnCap

Corporate Broker and Financial Advisor     Tel: [phone] 

William Marle

 

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