VietNam Holding Limited (the "Company")
Investor Report
A report detailing the activities of the Company for the month of March 2013 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:
Initial estimates for GDP growth in 1Q2013 are 4.89%, compared with 4.75% in the same period last year. Good news also on the inflation front: prices declined by 0.2% MoM in March, thereby taking the YoY figure for inflation to 6.64%. This allowed the central bank to shave another 100bps off both the refinance and discount rates; the former is now at 8%, the latter at 6%. That is the seventh consecutive act of monetary loosening since mid-2012, but the first this year.
The foreign invested sector continues to be the main source of Vietnam's export strength with a net trade surplus of US$3.12bn in 1Q2013. The foreign invested sector is indeed looking rather robust. Both FDI inflow pledges (of US$2.93bn in 1Q2013) and disbursements (of US$2.7bn in 1Q2013) increased over the same period last year, by 7.1% and 2.2% respectively. Leading the charge in the manufacturing sector is Samsung. In March the company commenced construction on its second large facility in northern Vietnam, this time in Thai Nguyen province. Expected to be Samsung's largest mobile phone production facility anywhere in the world, it will assemble various Galaxy handsets, with production expected to commence in November this year. Samsung already has a large facility in Bac Ninh province. In 2012 alone it generated exports of US$12.7bn.
VNH Insights:
An update of the evolution of the market segment valuations in 2013:
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HCMC Stock Market |
VNH Portfolio |
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As of |
Large Caps |
SMEs |
Total Market |
Large Caps |
SMEs |
Total Portfolio |
30-Sep-12 |
15.23x |
4.40x |
10.18x |
10.15x |
5.65x |
7.10x |
31-Dec-12 |
15.77x |
5.43x |
11.49x |
9.95x |
5.87x |
7.22x |
31-Mar-13 |
22.12x |
5.47x |
13.83x |
12.36x |
7.53x |
8.49x |
The table above continues to track the valuation gap between the large caps, which make up 80% of the market capitalization of the VNI, and the rest of the market. We have further refined the market segmentation by analysing the group of listed companies, which make up the "next 10%" of the market capitalization: 31 companies with an average 2012 P/E of an impressive 19.25x. VNH's portfolio companies in this group are valued at a more modest 8.58x P/E.
As of March 31, 2013, VNH's portfolio valuation at 8.49x was 37% lower than the VNI's because
a) VNH's portfolio contains much fewer of the overvalued large-caps;
b) our value approach has led us to a mid-cap centric portfolio;
c) the small-caps in VNH's portfolio have a higher valuation than their market peers because they are more profitable - as evidenced by the earnings strength of VNH's portfolio, which at a 5-year average annual EPS growth of 21.4% is well above the market's 7.6%.
April 25 is the next VNH warrants exercise date - strike price: US$ 1.196.
For more information please contact: |
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VietNam Holding Asset Management Limited |
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Gyentsen Zatul |
Telephone: +41 43 500 28 10 |
- Investor Relations |
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Oriel Securities Limited (Nominated Adviser and Broker) |
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Joe Winkley |
Telephone: +44 20 7710 7600 |