VietNam Holding Limited · LSE:VNH
VietNam — Investor Presentation (April 2016)
32 slides from VietNam's investor presentation, April 2016
Slide 1: Investor Presentation April 2016
Investor Presentation April 2016
Slide 2: VietNam Holding (VNH)
VietNam Holding (VNH) Value investment approach Fund Information Long-term growth: focus on megatrends Launch 15 June 2006 Conviction portfolio: mid-cap centric Listing London Stock Exchange: AIM Dynamic portfolio management Sustainability ESG Integration 10 year track record of top-performance Agri
Slide 3: VNH Performance
VNH Performance 1-Year Performance Comparison 20% +15.4% +14.9% 10% 0% +0.8% -10% VNH NAV VNH Share Price VNAS Index USD Adjusted VNH Performance Drivers: Theme-based asset allocation Value disciplines guide portfolio rebalancing Mid-cap centric and higher EPS growth Active engagement on sustainabil
Slide 4: Vietnam Policy Update
Vietnam Policy Update Open room up to 100% for foreign investors in certain sectors SOEs reform / privatizations and IPOs SOEs are required to be listed on UpCom 90 days after IPO IPO Pipeline in Telecom and Airlines sector SCIC to divest from 10 companies Strengthening corporate governance
Slide 5: Real Estate Market Recovery
Real Estate Market Recovery Number of units sold Ho Chi Minh City Residential Market, Annual Sales by Segments Legal basis for foreign ownership of residential units Sustainable growth in both retail & office sectors More mortgages with affordable interest rates Increasing middle class New infrastru
Slide 6: Foreign Direct Investments (FDI)
Foreign Direct Investments (FDI) FDI into Vietnam and % FDI/GDP (2000-2015) 15 14% 12% 12 10% 9 8% 6 6% 4% 3 2% - 0% Implemented FDI Capital (USD bn) (LHS) % FDI/GDP (RHS) Vietnam ranked the 5th by number of FDI projects in Asia Pacific (2014) China 932 India 641 Singapore 409 Australia 352 Vietnam
Slide 7: Global Competitiveness: Moving from 75th to 56th
Global Competitiveness: Moving from 75th to 56th Vietnam Global Competitiveness Rank 2012 2013 2014 2015 1 10 19 28 37 Ranking 46 56th 55 70th 68th 64 75th 73 82 91 100 2015 #48 in access to financing through local equity market #46 in venture capital availability #35 in domestic market size #27 in
Slide 8: Stock Market Capitalization
Stock Market Capitalization Market Cap as % of GDP (2015) Malaysia Thailand Philippines Indonesia China India Vietnam (VN-Index) 0% 20% 40% 60% 80% 100% Note: Market capitalization of main stock exchange in each country is used; Vietnam’s Market Cap % of GDP is 31% if the Hanoi Stock Exchange is inc
Slide 9: Stock Market Performance
Stock Market Performance From 31 March 2015 to 31 March 2016 10% 5% 4.2% 0.8% 0% -5% -5.1% -6.5% -10% -9.4% -9.9% -8.5% -11.1% -12.2% -15% -13.3% -13.5% -14.5% -20% -19.9% -25% -23.1% Vietnam: Malaysia Philippines Indonesia Thailand India China VNAS Local Currency USD adjusted Source: Bloomberg / 31
Slide 10: Stock Market Valuation
Stock Market Valuation Regional Valuation India (1.6%) 3.0 2.5 Philippines (1.8%) China (2.0%) Thailand (3.3%) Indonesia (2.0%) 2.0 Price to Book 1.5 Malaysia (3.1%) 1.0 Vietnam (3.5%) 0.5 0.0 7.5 9.5 11.5 13.5 15.5 17.5 19.5 21.5 23.5 25.5 Price to Earnings per Share Note: Vietnam: VN All Share Ind
Slide 11: VNH Investment Themes
VNH Investment Themes 31 December 2013 31 March 2016 2.5% 3.3% 3.5% Theme Allocation 19.5% Percentage of NAV Consumer 18.5% 40.2% Urbanization 42.8% Other 18.5% Agri-Business 31.9% Cash 19.3% Source: VNHAM / 31 March 2016. 11
Slide 12: Small/Mid Caps vs. Large Caps
Small/Mid Caps vs. Large Caps Portfolio Weighting VNH Value Approach 2% Mid-cap centric portfolio 25% High EPS growth Turn-around investment in mid-caps 73% SME valuations increasing Large Cap Mid Cap Small Cap Portfolio EPS Growth Valuation Comparison 30% 14 VNAS P/Es VNH P/Es 22.7% 11.8 11.6 11.6
Slide 13: Khang Dien House (KDH)
Khang Dien House (KDH) Shareholding Equitized 2007 / Listed 2010 Year 2013 2014 2015 2016F Market Capitalization USD 184.9 M P/E n/a 12.6 10.1 11.5 Free Float 58.1% Foreign Ownership 48.6% Investment Performance EPS Growth 2015 Annualized Total Return 16.2% 29.2% 25% Investment Case 20% 15% Leading
Slide 14: Nafoods Group (NAF)
Nafoods Group (NAF) Shareholding Equitized 2010 / Listed 2015 Year 2013 2014 2015 2016F Market Capitalization USD 39.3 M P/E n/a n/a 17.1 12.8 Free Float 62.1% Foreign Ownership 10.2% Investment Performance EPS CAGR (2013-2015) Annualized Total Return -4.0% 97% Investment Case 20% A leading exporter
Slide 15: Traphaco (TRA)
Traphaco (TRA) Shareholding Equitized 1999 / Listed 2008 Year 2013 2014 2015 2016F Market Capitalization USD 119.5 M P/E 13.5 12.4 13.5 12.7 Free Float 82.2% Foreign Ownership 45.8% Investment Performance EPS CAGR (2011-2015) Annualized Total Return 25.7% 15.4% Investment Case 600% Industry leader i
Slide 16: Active Engagement Program
Active Engagement Program Mandate Rapid Growth of VNH’s Director Engagement Program Create awareness of key issues on ESG Apply global best practices Dialogue focused on ESG progress Reclassification of Conviction Level based on ESG Criteria 2013 2014 2015 Up Down Up Down Up Down Total Divest Total
Slide 17: NAV Performance Comparison
NAV Performance Comparison Generating high risk-adjusted returns by combining rigorous financial analysis with interactive sustainability research 5 Years NAV Performance 160% Vietnam Holding Peer Group (weighted average) VNAS USD adjusted ETFs (weighted average) 120% 80% 40% 0% -40% -80% Source: Bl
Slide 18: Discount Management
Discount Management Share Price Discount to NAV 0% VNH Peer Group (weighted average) -5% -10% -15% -20% -25% -30% Share buyback program: USD 5.6M in 2015 Pro-active investor relations Potential reissue of treasury share Improving shareholder transparency Source: Bloomberg and Morningstar, 31 March 2
Slide 19: Investment Case
Investment Case Vietnam Fundamentals remain strong despite regional slowdown Government policy achieved growth with stability Market supported by banking and real estate recovery Corporate earnings growth: 2016 EPS projections: 8.8% FTAs and strong inflow of FDIs create long term benefits VNH 10 yea
Slide 20: Contact
Contact VietNam Holding Asset Management Ltd. Cayman Islands Collas Crill Corp. Services Willow House, Cricket Square Grand Cayman, KY1-1107 +1 215 325 1334 info@vnham.com Ho Chi Minh City - Representative Office Floor 8, Nam A Bank 201-203 CMT8, Dist. 3 Vietnam +848 3929 1511 VietNam Holding Asset
Slide 21: Appendix
@ VIETNAM HOLDING LTD. Appendix 21
Slide 22: Vietnam Macroeconomic Picture
Vietnam Macroeconomic Picture 2012 2013 2014 2015 2016F GDP Growth 5.2% 5.4% 6.0% 6.7% 6.7% Inflation 6.8% 6.0% 1.8% 1.3% 3.0% Export Growth 18.2% 15.4% 13.6% 8.3% 10.5% Import Growth 7.4% 18.3% 12.1% 11.9% 13.0% Trade Balance USD 0.7 bn USD 0.9 bn USD 2.0 bn -USD 3.2 bn -USD 5.2 bn FDI Disbursement
Slide 23: Newly signed FTAs to boost trade turnover and GDP
Newly signed FTAs to boost trade turnover and GDP Vietnam Imports & Exports (2010 – 2015) 180 40% 150 30% 120 USD bn 90 20% Consistent import and export growth 60 10% Vietnam exports grew 8.1% in 2015 despite 30 global trade stagnation 0 0% 2010 2011 2012 2013 2014 2015 Imports (LHS) Exports (LHS) 1
Slide 24: Banking Sector: The Worst is Over
Banking Sector: The Worst is Over Abundant liquidity after deleveraging process; Loan to Deposit Ratio (LDR) down from 109% in Loan to Deposit Ratio (LDR) 2011 to 90% in Q4-2015 110% Healthier credit growth with lower lending rate 105% 100% NIM bottoming out 95% NPLs down from 17% to around 8.1% to
Slide 25: EPS Growth Analysis
EPS Growth Analysis Regional Peers EPS growth (2013 -2015) 20% 15% 10% 6.4% 5% 1.8% 0% -5% Vietnam Indonesia India Philippines China Thailand Malaysia -10% -8.4% -8.1% -15% -14.3% -20% -25% -24.5% -30% -26.7% 2013 2014 2015 VN-Index (Vietnam) EPS growth stable in 2013 – 2015 6.4% EPS growth in 2015
Slide 26: 2015 Export Growth Comparison
2015 Export Growth Comparison 20 0 VN Vietnam’s exports to China + 14.8% YoY in 2015 Vietnam’s exports to others + 7.2% YoY in 2015 Sources: Bloomberg, Asia Development Bank, GSO Vietnam. 26
Slide 27: Vietnam gaining Market Share of total Imports to China
Vietnam gaining Market Share of total Imports to China Change in parts and components share versus change in import share, 2006 - 2014 The figure includes a sample of economies in developing Asia that accounted for at least 1% of PRC imports in 2014. The horizontal axis is the change in the share of
Slide 28: VNHAM Investment Process
VNHAM Investment Process Investment ESG Analysis Portfolio Universe Proposal Risk Mgmt Portfolio Review & Selection & & HOSE 307 Construction Rebalance & Decision Engagement HNX 366 UpCom 256 Valuation 20-35 stocks • Macro Themes Target Screening • Company visits • Asset • Economic Cycle • ESG Key I
Slide 29: Portfolio Composition
Portfolio Composition Key Metrics % of NAV invested in Equities 96.5% Trailing P/E 11.2 Positions 24 Forward P/E 9.3 Median Market Cap USD 119.6 M Forward PEG 0.8 Average Investment USD 5.2 M Dividend Yield 2.9% Industrial Goods & Services (15.0%) Health Care (15.8%) Retail (12.7%) Construction & Ma
Slide 30: Portfolio Rebalancing
Portfolio Rebalancing Top 10 Companies: % of NAV Comparison 31 March 2015 31 March 2016 1 Traphaco 7.3% 1 Traphaco 9.6% 2 Hau Giang Pharma 7.3% 2 Vinamilk 7.6% 3 Binh Minh Plastic 6.7% 3 Binh Minh Plastic 7.5% 4 Vinamilk 6.2% 4 FPT Corporation 7.4% 5 Danang Rubber 6.0% 5 Viconship 6.9% 6 Hung Vuong
Slide 31: Vietnam Fund Universe
Vietnam Fund Universe NAV Performance over different periods Period #1 Ranking Fund #2 Ranking Fund VNH Share Price VNAS Performance 1 year VNH: 15.4% 9.9% 14.9% 0.8% 2 years VNH: 15.2% 6.6% 29.4% -11.9% 3 years VNH: 59.2% 37.3% 61.0% 11.9% 4 years VNH: 97.9% 56.7% 89.5% 22.7% 5 years VNH: 116.8% 74
Slide 32: Disclaimer
Disclaimer This presentation ("Update") is for information only and does not constitute or form part of any offer, inducement or an invitation to sell, acquire or issue, or any solicitation of any offer to purchase or subscribe for, any shares or securities including any ordinary shares (“Ordinary S