Monthly Investor Report

VietNam Holding Limited

26 November 2024

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of October 2024 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: Sustaining strong growth in a shifting world

As we wind down a year dominated by geopolitical conflicts and national elections around the world, the story in Vietnam for now remains removed from ever-evolving global uncertainties. To start, 'China plus one' keeps getting better for the country's economy. In October, it maintained its robust economic run in 2024, with another record high trade surplus of US$23.3bn for the first 10 months of the year (10M 2024). Although growth in electronics and wood products slowed, other crucial export industries such as apparel and footwear showed improvement.

Additionally, in a report presented by the Prime Minister at the 8th session of the 15th National Assembly, the government said it estimates GDP growth in 2024 to reach 6.8%-7.0%, higher than the plan of 6.0%-6.5% set at the beginning of the year. It now aims to achieve GDP growth that surpasses the plan for 7.0-7.5% in 2025 in order to rank 31st-33rd globally (in terms of GDP) by this time next year. It announced ambitious targets for the period 2026-2030, with GDP growth aimed at 7.5%-8.5%, compared to 6.5%-7.0% for 2021-2025.

The country's General Secretary, To Lam, said "Vietnam is entering an era of national advancement". His statement and the grand plan for the period of 2026-2030 demonstrates the Vietnamese leadership's strong determination to drive socio-economic development through 2030.

VNH also stayed on its positive trajectory, having won both the Citywire and Investment Week investment company awards - for best emerging market fund, and outperforming the index year-to-date, 15.7% versus 9.6% for the market. In an interview, Craig Martin, chair of Dynam Capital, VNH's investment manager, discussed the US election, AI and Vietnam's fastest-growing sectors.

"Banks are a fascinating play on the broader economic growth in a country like Vietnam. Not every opportunity is captured in the stock market, but banks play to all those opportunities. Plus, Vietnam is under-banked. Until about two years ago, there were more Facebook accounts than bank accounts, but now that's changing. Vietnamese banks are actively looking at digitalisation tools and drawing more people into the banking system, so it's high growth and yet the banks themselves are very attractively priced on maybe one times price-to-book. There is excellent value and good growth. If you're very selective, you can find some excellent opportunities in the banking sector."

Although there is no doubt that global trade will shift under the new Trump administration, we believe Vietnam's position in Southeast Asia's emerging industrial stage will remain strong on a global scale. Vietnam has established itself as a manufacturing behemoth over the past decade, attracting billions in foreign direct investment (FDI) from companies looking to diversify production beyond China. It also is worth noting that nearly 40% of all ASEAN exports to North America come from Vietnam. In addition, Vietnam's semiconductor industry is establishing itself as participant in the global technology supply chain, thanks to the government's consistent support and well-defined strategy. For example, Samsung and Intel have increased their investments in Vietnam in response to US restrictions on Chinese technology, thereby increasing the capacity of an industry that is expected to generate US$100bn in revenue by 2050.

Several of the companies in our portfolio come from the services sector so are business-to-business and leveraging on these opportunities in Vietnam. Consequently, we see top-level growth and only a modest increase in their underlying operational cost structure, which is resulting in a high return on capital employed. So, while external geopolitical and economic risks may continue to loom, the Fund remains well-positioned for the growth expected for the rest of 2024 and into 2025.

For more information please contact:

Dynam Capital Limited                  

Craig Martin                                                                                       Tel: [phone]

[e-mail] |www.dynamcapital.com

www.vietnamholding.com

Cavendish Capital Markets Limited

Corporate Broker and Financial Advisor                                            Tel: [phone]      

 

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