Monthly Investor Report

RNS Number : 8869E

VietNam Holding Limited

12 July 2021

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of June 2021 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.

Riding the road to recovery

June proved to be another soaring month for both Vietnam's economy and the Fund. Despite the latest wave of Covid-19 cases slowing down some of the momentum seen in Vietnam's Manufacturing sector this year, GDP was still higher than expected in Q2, expanding 6.6%, with the Industry and Construction sector growing 8.4% YoY in H1 2021 compared with 3.0% in H1 2020.

International trade increased significantly in the first half of 2021 with exports rising by +28.4% YoY and imports +35.6 YoY. By the beginning of July, factories in the main industrial hubs of Bac Giang and Bac Ninh had resumed working, and we believe external demand, particularly from the EU, the US and China, will further enhance the country's exports and production in H2 2021.

VNH continued to post record-high gains for another consecutive month and ended the financial year up almost 100%. Also, with its NAV up +4.8%, it outperformed the VNAS amongst record index levels and domestic daily volumes, thanks mainly to notable gains in the securities brokerage and industrial sectors. The Fund particularly benefited from its overweight holdings in two securities companies: VCI, up +31.6%, and HCM, +30.5%. HCM's impressive results in 1Q of VND321bn, an increase of +219%, speak for themselves. Valuations remain attractive for the earnings growth outlook, and we expect listed companies to record even higher EPS increases in Q2, largely due to the low base in 2020. The Fund's overweight position in Industrials also proved positive, with port operation and logistics company Gemadept, GMD, up +16.3% and Airports Corporate of Vietnam, ACV, up 13.0%.  Although the recovery for ACV will continue to be impacted by COVID-19 restrictions, GMD could benefit from a recovery in the US and EU.

Gemadept's deep seaport - Gemalink - showed good throughput volume of 330k TEUs in 6M, while the volume growth for the Hai Phong port posted a positive 5M growth rate of 39% YoY. GMD's logistic business is forecast for stronger growth, given the need to use cold storage for seafood transporting, as well as the increased freight demand, which ultimately has stemmed from the open trade agreements Vietnam has been establishing with other countries and its memberships in the World Trade Organization and Association of Southeast Asian Nations (ASEAN). We see the increase in international trade in Vietnam as an important foundation for paving a sustainable road to recovery. As a low-cost manufacturing hub, the country is expected to continue to grow sturdily and despite the pandemic's disruption on supply chains, its ports have benefited as an alternative to China given its location and efficient workforce. Plus, with recent expansion in its electronics industry, as well as rapid developments in its autos and petrochemicals sectors, the steady flow of foreign manufacturers setting up in Vietnam is helping it renew the significant growth experienced before the pandemic. Foreign investment, indeed, has helped the economy remain among the most resilient and vibrant in the world throughout the pandemic.

At the end of the month the Fund received full proceeds from the redemption of its bonds in private logistics company ABA, a leading cold-chain logistics company. The investment was a profitable one for the Fund earning a double-digit rate of return, despite the fact that the company remains unlisted. As a result, at the end of June, the Fund held only liquid quoted securities and cash.

July has started off with heightened volatility in the equity markets due to profit taking, and as Vietnam continues to deal with the increase in COVID-19 cases. Ho Chi Minh City was placed under lockdown on 9th July.

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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