Monthly Update

Vietnam Enterprise Investments Ltd

17 August 2023

 

17 August 2023

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 NAV performance for July 2023 is set out in this notice.

Company Performance

·    As of 31 July, VEIL's NAV increased 9.7% over the previous month against a rise of 8.8% for its reference index, the Vietnam Index ("VNI"), both in total return US dollar terms. The Company's NAV per share was US$9.50 and its total NAV was US$1.9bn.

·    VEIL's share price increased 12.9% in July and has risen 20.0% year-to-date, both in US dollar terms.

·    VEIL's three-month NAV per share performance in US dollar terms is +16.9%, -0.9% over one year and +67.6% over three years. Over the same time periods, the performance of the VNI was +16.0%, +1.3% and +56.6%, respectively.

·    In GBP terms, VEIL's NAV increased 8.4% over the previous month and 13.0% year-to-date. The Company's NAV per share was £7.38 as of 31 July and its total NAV was £1.5bn. The sterling share price increased by 11.6% for the month and 12.2% year-to-date.

·    The share price discount to NAV as of 31 July was 11.4%, compared with 14.0% at the end of June and 10.7% as of 31 December 2022.

·    The Company repurchased 129,339 shares in July, compared with 583,504 shares repurchased in June. Year-to-date to 31 July, 2,035,928 (1.0% of shares outstanding as of 1 January 2023) have been repurchased.

·    The Vietnamese dong ("VND") depreciated 0.4% against the US dollar in July and has depreciated 0.2% year-to-date. The VND depreciated 1.6% against the pound sterling in July and has depreciated 6.9% year-to-date.

Dien Vu, Portfolio Manager of VEIL commented:

"VEIL's outperformance of the VNI in July came as five out of the Company's top ten holdings posted double-digit gains for the month. Mobile World Group ("MWG"), which the Manager believes had been oversold in the last year, led the way, rising 24.6%. The company reduced perceived phone inventory problems through aggressive sales initiatives, in turn decreasing inventory days for phones and consumer electronics from 80 to 61. As a result, its iPhone market share increased from 31% to 42% and non-iPhones from 52% to 58%. The Manager anticipates that MWG's earnings will recover in step with domestic consumption.

"Retail sales rose 7.1% year-on-year in July and the CPI was up 0.5% month-on-month and 2.1% year-on-year, primarily driven by food and energy prices. The July Purchasing Manager's Index ("PMI") figure of 48.7 was still in contraction territory, but the highest level in five months. Likewise, exports and imports rose to their highest levels in four months, albeit still declining 3.5% and 9.9% year-on-year, respectively. YTD, total exports to end of July reached US$194.7bn and imports US$179.5bn, making Vietnam's trade surplus US$15.2bn. In 2022, Samsung's exports from Vietnam reached US$65bn, constituting 17.4% of Vietnam's total exports. The Manager expects that exports and the PMI should receive a further boost from the upcoming release of Samsung's new series of smartphones scheduled for release in August.

"In a significant move, South Korea's newly elected president chose Vietnam for his inaugural overseas trip, reasserting the two countries upgrade to a 'comprehensive strategic partnership' last year. More than 200 Korean corporations accompanied the president, resulting in more than 110 Memorandums of Understanding being signed across multiple sectors. This in turn should support FDI, for which South Korea's activities in Vietnam have already totalled US$83bn across 9,700 projects. LG Innotek recently announced a US$1.0bn expansion to an existing project which boosted July's registration figures. FDI pledges have now reached US$16.2bn so far in 2023 and disbursements US$11.6bn, up 4.5% and 0.1% year-on-year, respectively.

"With the market rising 8.8% in July and daily liquidity across Vietnam's three exchanges rising to US$907m (up 46% since May), this marked a resurgence in investor sentiment which the Manager believes may in-part be fuelled by the Government's enhanced emphasis on public investment. The acceleration in public disbursement to 37.9% of the annual plan in the first seven months represents an encouraging signal for investor confidence, surpassing 2022's figure of 27.4% within the same period.

"The month also saw a revival in the residential property sector led by Vinhomes ("VHM") and Khanh Dien House ("KDH") both posting double-digit returns. VHM's major sales launch in July exhibited strong absorption rates of 90% for its 2,000 units. Meanwhile KDH, with one of the largest landbanks in Ho Chi Minh City, achieved a share price increase of 21.2% due to investor anticipation of a major new project launch."

Top Ten Holdings (66.7% of NAV)

	Company	Sector	NAV %	VNI %	Monthly Return %	One-year Return %
1	Asia Commercial Bank	Banks	12.1	1.9	3.6	10.0
2	Vietnam Prosperity Bank	Banks	11.7	3.1	11.1	14.1
3	Hoa Phat Group	Materials/Resources	8.5	3.4	7.4	29.2
4	Vietcombank	Banks	7.4	9.1	7.7	42.7
5	Mobile World Group	Retail	6.0	1.7	24.6	-12.5
6	FPT Corporation	Software/Services	5.0	2.0	15.3	18.9
7	Vinhomes	Real Estate	5.0	5.8	14.0	3.6
8	Becamex IDC	Real Estate	3.9	1.8	1.8	9.5
9	PetroVietnam Gas	Energy	3.6	4.1	8.8	-6.9
10	Khang Dien House	Real Estate	3.5	0.6	21.2	-1.5
	Vietnam Index	-		-	8.8	1.3

Source: Bloomberg, Dragon Capital

NB: All returns are given in USD terms

For further information, please contact:

Vietnam Enterprise Investments Limited

Rachel Hill

Phone: [phone]

Mobile: [phone]

[e-mail]         

Jefferies International Limited

Stuart Klein                                                                                                                        

Phone: [phone]

[e-mail] 

Buchanan

Charles Ryland / Henry Wilson / George Beale

Phone: [phone]

[e-mail]

LEI: 213800SYT3T4AGEVW864

 

END