Vietnam Enterprise Investments Ltd Red.Shs · LSE:VEID
Vietnam Enterprise Investments Ltd Red.Shs — Vietnam Enterprise Investments Ltd (VEIL) — Investor Presentation (March 2024)
30 slides from Vietnam Enterprise Investments Ltd Red.Shs's investor presentation, Mar 14, 2024
Slide 1: Vietnam Enterprise Investments Ltd (VEIL) March 2024 Webinar
Vietnam Enterprise Investments Ltd (VEIL) March 2024 Webinar
Slide 2: Speakers
Speakers Tuan Le Anh VEIL Lead Portfolio Manager Tuan joined Dragon Capital in 2006 as a Senior Analyst Tuan became Deputy Portfolio Manager of VEIL in 2010, befroe becoming Deputy Portfolio Manager of a segregated mandate managed by Dragon Capital for a large sovereign wealth fund, before takin
Slide 3: Agenda
Agenda 01 2024 Outlook: Portfolio Manager’s View 02 Global and Vietnam Macro Sensitivities 03 Vietnam Market View 04 Q&A
Slide 4: 2024 Outlook: Portfolio Manager's View
2024 Outlook: Portfolio Manager’s View
Slide 5: Visibility Of Earnings: 2024 Outlook
Visibility Of Earnings: 2024 Outlook Total Borrowing Growth (%YoY) Vietnam’s 2024 growth drivers 2.3% 3.8% 12.4% 2.3% #1 government’s priority: economic expansion 1Q23 2Q23 3Q23 4Q23 Quarterly Revenue by Sector Higher credit growth, 1Q23 2Q23 3Q23 4Q23 focus on real business demand rather than +3.4%
Slide 6: Visibility Of Earnings: 2024 Outlook
Visibility Of Earnings: 2024 Outlook Revenue growth NPAT growth Vietnam’s 2024 growth drivers 9-11% 16-18% #1 government’s priority: economic expansion Accelerating recovery Gross profit improvement Higher credit growth, focus on real business demand rather than Higher certainty through restructurin
Slide 7: VEIL: Portfolio Pre-positioning For 2024 Recovery
VEIL: Portfolio Pre-positioning For 2024 Recovery VEIL - Sector Allocation FOL Stocks Earnings Growth VEIL VNI Unit: % 25.6% 2024F Bank 40.2 16.7 +22.3% 40.7 Residential Real Estate 13.7 +12.7% 10.1 Steel 12.6 +71.2% 4.0 Retail 7.5 2.5 +152.1% 2.7 Tech 6.4 6.4 +19.5% 2.9 Industrial Park 3.9 +14.3% 2
Slide 8: VEIL: Portfolio Matrix
VEIL: Portfolio Matrix EPS PE PB ROE VEIL Portfolio wt Market Cap. Growth (x) (x) (%) (%) (USD mn) (%) 29/02/2024 2024 2024 2024 2024 HPG Vietnam’s largest and fully-integrated steel producer 9.9 7,313 79.1 15.0 1.6 11.1 ACB Best private bank in terms of asset quality 9.0 4,412 18.5 5.8 1.2 24.0 VPB
Slide 9: In-depth: Hoa Phat Group (HPG) – Steel Manufacturer
In-depth: Hoa Phat Group (HPG) – Steel Manufacturer Investment Rationale Bottomed Out ASP (US$/T) Sales Volumes Ramps Up 9.9% of VEIL vs 3.6% of the VNI 700 14,000 MT Long Steel HRC Strong corporate governance and pioneer of Long Steel HRC USD/T 12,000 the VN steel industry 650 10,000 1# BOF Ste
Slide 10: In-depth: Asia Commercial Bank
In-depth: Asia Commercial Bank Investment Rationale The highest portion of retail ACB’s NPL vs Banking Sector (%) lending(%) 9.0% of VEIL vs 2.2% of the VNI ACB Sector 1.7 1.7 1.7 Founded in 1993, ACB is a leader among private ACB MBB VPB TCB 1.4 65 1.4 banks, with total asset size of $26bn, and 1
Slide 11: In-depth: Khang Dien House
In-depth: Khang Dien House Investment Rationale Among a few names to have 2023 Biggest landbank in HCMC (ha) 2.5% of VEIL vs 0.6% of the VNI presales (USD mn) 400 Founded in 2001, KDH is a leader residential developer dominating HCMC with total asset size 159 of $1bn. Well known for good and pru
Slide 12: In-depth: Mobile World – The Leading Retailer
In-depth: Mobile World – The Leading Retailer Investment Rationale BHX: Reaching critical point in business model Store expansion to restart 4.2% of VEIL vs 1.3% of the VNI 4% Ending # Stores +400 2,398 BHX: Adjusted PBT Margin Stores 2% Best-in-class management leading the retail transformation o
Slide 13: VEIL Share Price Performance: Active Buybacks
VEIL Share Price Performance: Active Buybacks VEIL share price performance since listing in LSE 12.0 In the last 24 months, USD the Board has repurchased 5.5% 10.0 of shares outstanding 8.0 6.0 Total Share Total Share Buyback in 2022: Buyback in 2023: 6.8mn 5.7mn 4.0 (~USD 61mn) (~USD 40mn) Total Sh
Slide 14: Global Macro Sensitivities
GLOBAL MACRO SENSITIVITIES DRAGON CAPITAL LS
Slide 15: Rates: Global Rates Expected To Decrease
Rates: Global Rates Expected To Decrease No further hikes expected, .. Several months earlier than typical timing Cuts may begin in 3Q24 from macro indicators Policy rates Timing of the first rate cut 6 5 Market Based on Inflation 4.25 & Jobs Fed 4 4 Based on Inflation ECB Market 3 & Jobs 3.25 2 FED
Slide 16: Exports: Restocking & The Rise of AI-Enabled Devices (1)
Exports: Restocking & The Rise of AI-Enabled Devices (1) Inventory level/sales - No. Of Months 2.0 Manufacturers 1.9 Retailers 1.8 Merchant Wholesalers 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 16 Vietnam
Slide 17: Exports: Restocking & The Rise of AI-Enabled Devices (2)
Exports: Restocking & The Rise of AI-Enabled Devices (2) Retail Electronics’ Indicators 80.0 Vietnam: Telephones, mobile phones 60.0 Vietnam: Computers, electrical products South Korea: Exports of Semi Conductor 40.0 20.0 - (20.0) (40.0) (60.0) Jan-18 Jun-18 Nov-18 Apr-19 Sep-19 Feb-20 Jul-20 Dec-20
Slide 18: Vietnam Macro Sensitivities
VIETNAM MACRO SENSITIVITIES
Slide 19: Economic Policies: Previous Easing Flowing Into The Economy
Economic Policies: Previous Easing Flowing Into The Economy Accommodative M2: (1) money injection Mortgage Rates Dropping Sharply + (2) public investment 17.0 14.0 Public investment is releasing dormant 15.0 money into the economy 13.0 13.0 12.0 11.0 11.0 9.0 10.0 7.0 9.0 5.0 8.0 Bottomed in 1Q23 3.
Slide 20: Residential Sales Picked up Slightly in 2H23
Case Study: Residential Sales Picked up Slightly in 2H23 Condominium Sales In Ho Chi Minh City Condominium Sales In Hanoi City 35,000 40,000 Newly Launched Units Sold Units Newly Launched Units Sold Units 30,000 35,000 Sold Units 30,000 Sold Units 25,000 H2 2023: 4,930 units H2 2023: 3,363 units +10
Slide 21: Tourism: Numbers Return Rapidly
Tourism: Numbers Return Rapidly Tourism 2200 2000 1800 1600 1400 1200 1000 Rest 800 600 Korea 400 200 China 0 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Source: IMF, Bloomberg, GSO 21 Vietnam Enterprise Investments Limited: Webinar March
Slide 22: Economic Activity: Proxies Suggest Recovery
Economic Activity: Proxies Suggest Recovery Electricity Consumption Imports & Export Activities 15% 50 YoY 40 Exports (YoY) Imports (YoY) 10% 30 2017-23 avg: 6.1% 5% 20 0% 10 0 -5% -10 -10% -20 -15% -30 1Q 23 2Q 23 3Q 23 4Q 23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Source: SB
Slide 23: Macroeconomic Indicators
Macroeconomic Indicators Item Unit 2022 2023E 2024F GDP $bn 408.8 430.0 463.0 ► Growth % 8.0 5.1 6.0 – 6.5 Exports $bn 371.3 354.7 389.4 ► Growth % 10.5 -4.6 9.8 Import $bn 358.9 326.4 359.7 ► Growth % 7.8 -9.5 10.2 Trade Balance $bn 12.4 28.0 29.8 Disbursed FDI $bn 22.4 23.2 24.2 Inflation % 3.2 3.
Slide 24: Vietnam Market View
VIETNAM MARKET VIEW
Slide 25: Market Forecasts and Valuations
Market Forecasts and Valuations 02/29/2023 unit 2020 2021 2022 2023E 2024F Foreign Flows (USDm) 1,200 Revenue % 2.2 22.0 12.3 1.5 13.0 1,000 Growth 800 EPS Growth % 5.6 37.1 -1.4 -4.4 22.7 600 PER x 13.7 14.5 9.1 11.7 10.5 400 PBR x 2.3 2.6 1.5 1.5 1.5 200 - ROE % 17.6 20.5 17.2 14.2 15.3 (200) Net
Slide 26: Roadmap to Market Upgrade
Roadmap to Market Upgrade Roadmap to Market Upgrade Sensitivity Analysis on Potential Capital Flow 3Q 29 Aug 2022, Shortened Total AUM tracking in $bn 2022 Settlement Time to T+2.5 from T+3 (Passive + Active) Vietnam’s Expected Weight (%) 600 800 1,000 Published Decrees and Circulars to 2024 address
Slide 27: Valuations
Valuations Good Valuation And Accommodative Policies Likely Limit Downside and Offer A Value Entry Point 4.0 28 26 3.5 24 3.0 22 20 2.5 18 2.0 16 1.5 14 3 12 4 1.0 1 2 Banking Crisis Covid Current 10 Post WTO Fever & GFC 0.5 8 Jan-09 Jul-11 Jan-14 Jul-16 Jan-19 Aug-21 Feb-24 Jan-09 Jul-11 Jan-14 Jul
Slide 28: Q&A
Q&A
Slide 29: Thank You For Listening
THANK YOU FOR LISTENING
Slide 30: Disclaimer
Disclaimer This presentation has been prepared by Dragon Capital Management (HK) Limited (“Dragon Capital”) for the information of registered participants and attendees in the live webinar hosted by Vietnam Enterprise Investments Limited on 14 March 2024. The information provided herein has been pre
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