Monthly Investor ReportSource: RNS
VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month January 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.
Investor Report Summary
The Fund's Net Asset Value per share declined by 5.6% in January, underperforming the Vietnam All-Share Index which fell by 3.6%. January had started well, and optimism ahead of the Lunar New Year (Tet) holiday took the markets to a two-month high, but the spread of the coronavirus (nCoV) from China spooked Vietnam's equity markets and over the two trading days at the end of the month, the markets fell by 6.1%. The Vietnam stock markets were in their infancy during the SARS outbreak in 2003, which had a significant impact on Vietnam and South East Asia as a whole, so comparisons are hard to make. Train and road travel across Vietnam's northern border with China has been curtailed as have international flights between the two countries. The airline and tourism sectors are likely to be hit hard for as long as such travel bans are in place, but other short-term and mid-term impacts are more difficult to discern in any meaningful way at this stage. That said, valuations and fundamentals matter less to domestic investors in Vietnam than the fear of the unknown, and volatility may continue for some time.
There were only a few positive performers in the month, with Saigon Cargo Services (5.9% NAV) and Thien Long Group (3.9% NAV) rising by 5.3% and 2.4% respectively. The increases are after several months of declines in these two stocks (they declined by 12.9% and 25.5% respectively in 2019) despite having robust and stable customer bases. Some of the Fund's larger holdings were also caught in the broader selloff: FPT (12.5% NAV) fell 11.0%, Khang Dien House (5.9% NAV) fell 7.3% and Dat Xanh Group (4.0% NAV) fell 20.5%.
Prior to adjusting for any impact of the Coronavirus, we forecasted an EPS growth of around 17.1% for the portfolio holdings in 2020. Single-digit Price/Earnings Ratios of 9.7x for 2020 and 7.8x for 2021 mean that there is some buffer for any slow-down in earnings' growth. People are getting back to work after the start of the Lunar New Year (the Rat) and businesses will begin to review their plans and strategies. We have already met with several of our portfolio companies this year and core growth in the portfolio remains strong, however we will continue to closely monitor the developments.
We are looking to compose and manage a portfolio that we hope will reward investors for their patience in the next three to five years, as growth compounds. In addition, we continue to emphasise the benefits of good ESG standards to our portfolio companies, and we are pleased to see many of them improving their transparency through better Investor Relations, provision of training for board members, and seeking ways to address climate change.
For more information please contact:
Dynam Capital Limited
Craig Martin Tel: +84 28 3827 7590
Nominated Adviser and Corporate Broker Tel: +44 20 7220 0500
William Marle / Giles Rolls
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