VinaLand — Edmond de Rothschild Emerging Markets Funds Conference 2013
32 slides from VinaLand's conference presentation, Mar 7, 2013
Slide 1: Manager's VinaLand Limited update
Manager’s VinaLand Limited update David Blackhall – Managing Director Edmond de Rothschild Emerging Markets Funds Conference 2013 6-7 March 2013 London 1
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared by VinaCapital Investment Management Limited (the “Company") and is subject to updating, completion, revision, further verification and amendment without notice. The information contained herein has not been approved by any listing author
Slide 3: Contents
Contents 1. Vietnam macroeconomics 2. Vietnam real estate market 3. Historical performance and highlights 4. EGM outcome and re-organisation strategy 5. Appendix 3
Slide 4: Vietnam: 2013 should see an improvement in GDP growth
Vietnam: 2013 should see an improvement in GDP growth Current situation GDP growth, YTD year-on-year, % • The economy grew by 5.03% in 2012 lower than 5.9% in 2011. • Weak GDP performance is linked to a very tight monetary policy: 8.00% 7.00% • Credit growth 6% as compared to 14% in 2011. 6.00% • Ti
Slide 5: Inflation continues its downtrend
Inflation continues its downtrend Current situation • In 2012 inflation was brought under control. CPI inflation in 2011-2012, M/M • CPI rose 6.8% YOY as compared to 18% in 2011. 2.50 2.2 2.00 • Inflation fell primarily because: 1.4 1.50 1.1 1.2 • Tighter monetary policy. 0.9 0.8 1.0 0.9 1.00 0.6 •
Slide 6: VND stability continues
VND stability continues Current situation • As at 31 December 2012, the exchange rate was 20,880. VND/USD rate, 2010-2012YTD • The SBV kept the reference rate (20,828) within VND'000 Official Rate VCB Sell Free market Sell 21.2 the +/- 1% bandwidth throughout the year. 21.1 • The free market rate al
Slide 7: Interest rates: The downward trend continues
Interest rates: The downward trend continues • 2012 began with a cap rate of 14% for VND deposits and lending rates over 20%. • With inflation trending down throughout the year, the SBV engineered a series of rate cuts which brought the cap to 9% and the refinancing rate to 10% by Q3. • By mid year,
Slide 8: Select macro indicators
Select macro indicators Key Indicators 2008 2009 2010 2011 2012 2013F GDP growth (%) 6.2 5.3 6.8 5.9 5.0 5.7 CPI (%) 23.0 6.52 11.75 18.1 6.81 7.5 Trade deficit (USD Bn) (17.8) (12.2) (12.4) (9.5) 0.3 2.0 Exports (USD Bn) 62.5 56.6 71.6 96.3 114.6 139.2 Imports (USD Bn) 80.3 68.8 84.0 105.8 114.3 14
Slide 9: Contents
Contents 1. Vietnam macroeconomics 2. Vietnam real estate market 3. Historical performance and highlights 4. EGM outcome and re-organisation strategy 5. Appendix 9
Slide 10: Vietnam real estate market update – main sectors
Vietnam real estate market update – main sectors • Condominium sector – Very slow sales over the previous 12 months due to over-supply and expensive mortgage finance. Prices have been under pressure as developers compete across most sub sectors. – VNL has very small exposure in this sector. Since Qu
Slide 11: Vietnam real estate market update – residential sector
Vietnam real estate market update – residential sector • Unsold inventory of apartments: ~18,000 units in HCMC and Hanoi Supply/Demand of Condominiums – Q4 2012 (source JLL Vietnam). Prices generally down across all sub- HCMC Hanoi segments Completed supply 53,000 35,000 Uncompleted supply 28,000 51
Slide 12: Contents
Contents 1. Vietnam macroeconomics 2. Vietnam real estate market 3. Historical performance and highlights 4. EGM outcome and re-organisation strategy 5. Appendix 12
Slide 13: Fund overview
Fund overview Fund & Portfolio summary (31 Dec 2012) NAV $516.3 m NAV per share $1.07 Market cap $228.0 m (31 January 2013) Hanoi Shares outstanding 482,448,227 Current assets 35 8% Hanoi region Divestments 11 full, 1 partial and residential unit sales Debt level Fund: Nil Projects: 16% of NAV Portf
Slide 14: NAV vs. Share price performance
NAV vs. Share price performance as at 25 February 2013 1.75 9.4% 9.5% 1.50 21.3% 21.5% 1.25 1.07 1.00 27.7% 27.3% 0.75 0.50 41.6% 0.50 41.8% (20 Feb 2013) 0.25 0.39 - Apr-06 Feb-07 Apr-07 Feb-08 Apr-08 Feb-09 Apr-09 Feb-10 Apr-10 Feb-11 Apr-11 Feb-12 Apr-12 Feb-13 Jun-06 Aug-06 Jun-07 Aug-07 Jun-08
Slide 15: Divestment history
Divestment history VNL projects fully divested Cost Net proceeds from exit to VNL 70 Millions 60 29% IRR 50 40 30 23% IRR 20% IRR 22% IRR 3% IRR 16% IRR 20 10% IRR 16% IRR 10 10% IRR 9% IRR -2% IRR - Hilton Hanoi Central Golden *Mandarin Bai Dong Oasis *Quoc Te Bai Dai S-Tower Legend *Nguyen Du Tota
Slide 16: Top 10 holdings
Top 10 holdings VNL top ten holdings VNL VOF Site area % of VNL VNL NAV Investment Location Sector Current status ownership ownership (ha) NAV (USD) 1 Century 21 South Residential 75.00% 25.00% 30.1 13.8% 74.1 Planning / licensing underway 2 Danang Beach Resort Central Residential 75.00% 25.00% 260.
Slide 17: Contents
Contents 1. Vietnam macroeconomics 2. Vietnam real estate market 3. Historical performance and highlights 4. EGM outcome and re-organisation strategy 5. Appendix 17
Slide 18: Extraordinary General Meeting - outcome
Extraordinary General Meeting - outcome An EGM was held on 21 November 2012. Shareholders supported with a two thirds majority both recommendations put forth by the Board regarding the continuation of the Company. • The Ordinary Resolution established the framework to restructure the Company includi
Slide 19: EGM outcome – key terms of the re-organisation
EGM outcome – key terms of the re-organisation • To ensure alignment, the fees payable to the investment manager have been amended and incorporated into the restated investment management agreement – Reduced management fees from 2% of the NAV to fixed annual amounts for each year of the new three ye
Slide 20: VNL re-organisation and strategy
VNL re-organisation and strategy New strategy Complete statutory Only proceed with Expedite exits - best works Finalise licensing Return of capital to possible valuation existing development to facilitate & approvals shareholders to facilitate exits subdivision/exits • No new investments. • Only pro
Slide 21: Strategy implementation – pipeline exit progress
Strategy implementation – pipeline exit progress Several pipeline divestments, with negotiations well advanced, are summarised below to provide an indication of the current status. Since the EGM on 21st November 2012, The Nguyen Du project was sold and the exit completed in January 2013. Additionall
Slide 22: Enhancement of corporate governance
Enhancement of corporate governance Post the EGM the VNL Board has commenced the implementation of a number of changes The total of seven Board members was reduced to six in January 2013, with plans underway to reduce to five in 1H 2013 The first AGM will be held in 2H 2013 and then each subsequent
Slide 23: Appendix
Appendix • Returning capital methodology • Portfolio valuation methodology • Comparison : Vietnam versus ASEAN countries • Top 10 projects profile
Slide 24: Returning capital methodology
Returning capital methodology The method by which capital is returned to shareholders will be dependent on: • Timing of execution of the realisation program • Surplus cash available for distribution • Share price discount to NAV • Prevailing shareholder feedback at the time Share Buybacks Methods fo
Slide 25: Portfolio valuation methodology
Portfolio valuation methodology Valuation Committee • The valuation process is overseen by the Board’s Valuation Committee, comprised of independent non- executive directors of the Board. Timing of revaluations • Assets are held at cost until they receive an investment license or similar legal docum
Slide 26: Comparative data: Vietnam versus ASEAN countries
Comparative data: Vietnam versus ASEAN countries Macro Indicators Cambodia China Indonesia Malaysia Philippines Thailand Vietnam GDP Growth (%) 6.6 7.9 6.1 5.1 6.0 4.7 5.0 Inflation (%) 4.0 2.8 4.4 2.0 3.5 3.0 6.8 Budget deficit (% GDP) (6.2) (2.9) (2.2) (4.4) (2.4) (2.7) (4.8) Exports growth (%) 10
Slide 27: Top 10 projects profile – Century 21
Top 10 projects profile Century 21 Project summary Century 21 Century 21 was acquired in 2006 because of its prime location, close to a new traffic corridor Sector Residential (24ha) and commercial (6ha) Thu Thiem to the CBD. The Thu Thiem tunnel which was part of the Ho Chi Minh City East-West Urba
Slide 28: Top 10 projects profile – Pavilion Square
Top 10 projects profile Pavilion Square Project summary CBD Located in District 1 of Ho Chi Minh City, this mid to higher-end ‘for sale’ freehold residential Sector Mixed-use (residential and retail). project with a retail centre is situated in the city centre. Site compensation is underway and Pavi
Slide 29: Top 10 projects profile – Times Square Hanoi
Top 10 projects profile Times Square Hanoi Project summary The site is positioned in a strategic location with excellent exposure opposite the National Sector Mixed-use (residential, retail, hotel and office) Hanoi Old Quarter Convention and Exhibition Centre, which has been hosting many national an
Slide 30: Top 10 projects profile – My Gia Township
Top 10 projects profile My Gia Township Project summary The My Gia site was acquired to offer the first modern township in Nha Trang, a fast-growing Sector Township tourism destination in central Vietnam. While Nha Trang’s seaside strip is largely built up, the city has no master-planned township of
Slide 31: Top 10 projects profile – Trinity Park
Top 10 projects profile Trinity Park Trinity Park Project summary Formerly called HUD Dong Tang Long, this site was acquired in 2007 in order to serve the Sector Residential (including school). high demand in Ho Chi Minh City for mid-range housing, and in 2012 the strategy remains the same. The proj
Slide 32: VinaCapital Group
VinaCapital Group 17th floor, Sun Wah Tower 115 Nguyen Hue, District 1, Ho Chi Minh City, Vietnam P: (84 8) 3821 9930 F: (84 8) 3821 9931 Email: ir@vinacapital.com Website: www.vinacapital.com Ho Chi Minh City Hanoi Danang Nha Trang Phnom Penh Singapore 32
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