Monthly Investor Report

RNS Number : 7023S

VietNam Holding Limited

10 July 2020

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month June 2020 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.

Taking Stock

Six months on since the World Health Organisation learned of a new disease spreading in Wuhan, China, one thing certain is that Covid-19 is accelerating several already existing trends. Digital transformation in Vietnam is no exception, with annual online spending in the country more than doubling in recent years. 

Many of the government's swift and effective public health responses throughout the pandemic have been enabled by information technology. The country, one of only a few in the world to have no Covid-19 related deaths, has put its high penetration of mobile phones and internet access to great use with, for example, its National Public Services Portal which was launched at the end of last year. It registered significant surges in traffic from the start of the outbreak and continues to help the government promote social inclusiveness, sustainability and a strong sense of community during a time of crisis. The government was already committed to a digital transformation agenda that included its eDocument Exchange Platform, as well as a new focus on digital payments technology, the latter of which is also part of a national financial inclusion strategy that was approved back in January.

Even though the Vietnam All Share Index dipped by 3.3 percent in June due to profit-taking, and the VNH portfolio was down 2.6 percent, we are optimistic about Vietnam's fast-growing use of e-commerce and believe it will be a cornerstone of the country's economic road to recovery.

Vietnam's external exposure to tech supply chains has helped offset some weakness in traditional manufacturing sectors, while domestic demand, including that derived from increased online shopping, is rebounding much faster than expected.

Vietnam's June Manufacturing PMI's broke the 50 mark for the first time in five months, with HSBC being one of many institutions to raise their 2020 growth forecasts for the country due to its lauded handling of the pandemic. HSBC raised theirs to 3.0 percent from the previously set 1.6 percent. This compares with negative forecasts for much of the developed world.

Viettel post (VTP), an online parcel delivery business which is now in our top-ten holdings (4.8 % of NAV) is a prime example of this positive momentum. The company continues to benefit from the online growth and upsurge in goods delivery in Vietnam, particularly given its extensive postal coverage and large client base. It has a critical competitive advantage since it manages Viettel Telecom's stores and point of sales, which has a subscriber base of around 67 million as of year-end 2019. To put that into context, that is almost 70 percent of the country's population. VTP should also benefit from the Viettel Group's newer digital services and Vietnam's expected rise in cashless payments. Voso, VTP's e-commerce marketplace, and MyGo, its ride-hailing service, are poised to benefit from the upcoming mobile money programme, which the Prime Minister has approved to pilot in the second half of 2020.

FPT Corp, the largest weighting in VNH's portfolio, is another company well-positioned for the heightened focus on tech and e-commerce. Global spending in information and technology is widely forecast to rebound in 2021, and that will be positive for FPT Software. The ongoing growth in content consumption in Vietnam also bodes well for FPT.

Mobile World Group (MWG) operates the country's fifth most popular website and is the leading multiproduct-omnichannel. The company has stood out for innovatively matching local needs and thoroughly looking after its stakeholders during the pandemic. We expect it to make further strides in its online grocery business expansion during H2 2020.

For more information please contact:

Dynam Capital Limited  

Craig Martin                                                                                             Tel: [phone]

[e-mail] | www.dynamcapital.com

www.vietnamholding.com

finnCap

Nominated Adviser and Corporate Broker       Tel: [phone] 

William Marle / Giles Rolls

 

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