VinaCapital Vietnam Opportunity Fund Limited AccumUSD · LSE:VOF
VinaCapital Vietnam Opportunity Fund Limited AccumUSD — VinaCapital Vietnam Opportunity Fund — Numis Emerging Markets / Asia Conference 2021
24 slides from VinaCapital Vietnam Opportunity Fund Limited AccumUSD's conference presentation, Feb 10, 2021
Slide 1: VinaCapital Vietnam Opportunity Fund (VOF)
VinaCapital Vietnam Opportunity Fund (VOF) Numis Emerging Markets / Asia Conference 2021 Andy Ho Managing Director Chief Investment Officer February 2021 1| Classified: Public
Slide 2: Vietnam's unique opportunity
Vietnam’s unique opportunity 97 MILLION 6.5% GDP #1 FDI STABILITY POPULATION YOUNG , 2021 FORECAST, NEXT WAVE OF FDI , STABLE , PRUDENT UPWARDLY MOBILE , FASTEST GROWING IN FACTORY RELOCATIONS GOVERNMENT, ANTI - SPENDING REGION OUT OF CHINA CORRUPTION EFFORTS 2| Source: VinaCapital research, 2021 Cl
Slide 3: Investment Objective; About VinaCapital; Investment Philosophy
Investment Objective VOF’s objective is to achieve medium to long-term returns through investment in assets either in Vietnam or in companies with a majority of their assets, operations, revenues or income in, or derived from, Vietnam. About VinaCapital Investment Philosophy ● Founded in 2003, today
Slide 4: Vietnam Long-Term Growth Story Improved in 2020!
Vietnam Long-Term Growth Story Improved in 2020 ! 4| Classified: Public
Slide 5: Confident consumers drive domestic demand
Confident consumers drive domestic demand “V-Shaped” Recovery in Domestic Demand 9.4% 10% 5% 0% Jan & Feb Mar Apr May Jun July Aug Sep Oct Nov Dec -5% -10% -15% -20% -23.0% -25% Nominal Retail Sales (yoy) • Vietnam Consumer Confidence, #2 in the World after India (Nielsen) • Confidence in the Govern
Slide 6: Vietnam's next FDI wave will significantly boost GDP growth
Vietnam’s next FDI wave will significantly boost GDP growth FDI companies will help build Vietnam’s local suppliers by: ✓ Second executives to Vietnamese firms ✓ Transfer knowledge & Best practices ✓ Long-term procurement contracts In the past, FDI companies built up local suppliers in: Singapore, T
Slide 7: Apple starts building a local supply chain in Vietnam
Apple starts building a local supply chain in Vietnam Apple will manufacture its $350, Airpods Studio Earphone product in Vietnam For the first time, Apple will manufacture in Vietnam before perfecting production in China Apple is embarking on a “Multi-Year Process” to “Create a New Cluster of Compo
Slide 8: Corporate Net Profit Growth
Corporate Net Profit Growth Consensus net profit growth estimates Consensus Net Profit Growth for 2020 Estimates Vietnam Indonesia Malaysia 20 Philippines Singapore Thailand 67.5 10 56.156.9 46.0 36.9 0 33.0 29.8 21.0 23.0 18.0 17.7 -10 -2.7 -5.3 -20 -17.3 -25.1 -35.9 -30 -41.6 Dec-19 Feb-20 Apr-20
Slide 9: Foreign Investor Flow
Foreign Investor Flow Net foreign flow in 2020 Accumulative net foreign flow into Vietnam Vietnam Indonesia Malaysia Philippines Thailand 2,000 USD mn -876 W/o Block 1,000 trade -2,513 0 -3,220 (1,000) (2,000) -5,782 (3,000) Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 USD mn Net foreign flow -8,287 Total Blo
Slide 10: VNI in 2020
VNI in 2020 Performance of VN Index and Daily Turnover 2020 1,200 1200 COVID ONSET OUTBREAK 30 Jan to 10 Apr 21 Jul to 31 Aug 1,100 1000 A classic event-driven bear market: shorter duration, faster recovery 1,000 800 900 600 800 400 700 200 Daily Turnover in USDm (RS) 600 0 Dec-19 Jan-20 Feb-20 Mar-
Slide 11: Vietnam Market Outlook
Vietnam Market Outlook • For 2021: a higher VNI at year-end • Key draws: ➢ Economic resiliency ➢ Greater earnings certainty ➢ A cheaper market ➢ Low foreign investor positioning ➢ MSCI upgrade watch ➢ Risk-on sentiment ➢ Support measures to remain ➢ USD weakness 11| Source: VinaCapital Classified: P
Slide 12: A Cheaper Market
A Cheaper Market ASEAN MARKET P/E (x) VN Index Indonesia Malaysia Philippines Singapore Thailand 28.4 25.1 27.5 19.7 19.7 18.1 18.5 17.3 16.1 16.2 16.0 15.5 15.3 14.0 14.0 11.5 12.1 12.0 2020F 2021F 2022F 12| Source: Bloomberg and IMF, as at 31 December 2020. Classified: Public
Slide 13: MSCI Upgrade Watch
MSCI Upgrade Watch MSCI FRONTIER MARKET: Pre-Kuwait’s upgrade to EM • Vietnam’s MSCI FM 100 weight would increase to ~29%. • Vietnam upgrade to EM? Possibly 1H22… 13| Source: MSCI FM 100, FiinPro Classified: Public
Slide 14: 2020: VOF Performance Highlights
2020: VOF Performance Highlights $1.1 BILLION +27% $50 MILLION 11 CENTS NAV 31 DEC 2020 NAV TOTAL RETURN SHARE BUYBACK 3 DIVIDEND PAID $6.29 PER SHARE 1 ( VN INDEX +17.5%) 2 DISCOUNT <8% ANNUAL YIELD 2% 4 1. Total NAV and NAV per share, USD terms 2. Source: Bloomberg. VN Index total returns, NAV per
Slide 15: VOF delivers long term outperformance
VOF delivers long term outperformance 2020 VOF performance vs. VN Index (%) 40% 35.9% 30% 27.3% 24.6% 20% 17.4% 10% 0% -10% -20% -30% -40% 31-Dec-19 31-Aug-20 31-Jan-20 30-Jun-20 31-Jul-20 31-Dec-20 30-Apr-20 30-Nov-20 31-Mar-20 31-Oct-20 31-May-20 29-Feb-20 30-Sep-20 VN Index ($TR) VOF Listed Equit
Slide 16: VOF portfolio and Sector Allocation
VOF portfolio and Sector Allocation 1.1% 4.0% Construction materials 21.1% Real estate & construction 20.6% 15.5% Financial services 17.1% Food & beverage 8.9% Infrastructure 7.4% NAV: USD1.1bn Pharmaceuticals & health care 6.2% 31 Dec 2020 Consumer discretionary 5.8% 15.2% Information technology 2.
Slide 17: Private Equity: significant transactions during FY2020
Private Equity: significant transactions during FY2020 PE: Thu Cuc International PE: Ngoc Nghia USD21.4m General Hospital USD26.2m PE: Petrolimex Aviation USD8.5m PE: IN Holdings USD25.4m 17| Classified: Public
Slide 18: Public Equity: A concentrated portfolio of high-quality companies
Public Equity: A concentrated portfolio of high-quality companies New names initiated… …while others sold 18| As at 30 September 2020 Classified: Public
Slide 19: Top holdings: Public Equity
Top holdings: Public Equity NAV Top 10 Public Equity Holdings Sector %NAV USDm 1 Hoa Phat Group (HPG) Construction Materials 194.9 18.2% 2 Khang Dien House (KDH) Real Estate and Construction 96.9 9.0% 3 Airports Corporation of Vietnam (ACV) Infrastructure 76.9 7.2% 4 Phu Nhuan Jewelry (PNJ) Consumer
Slide 20: Recap: VOF's investment strategy
Recap: VOF’s investment strategy 01 Growth Capital 02 Minority Protections • Capital to support expansion and growth • Volatility and weak corporate governance is pervasive • Sectors benefitting from the growing domestic economy • Downside protections coupled with clear exit mechanisms • Long term i
Slide 21: VOF's Private Equity approach to investing
VOF’s Private Equity approach to investing Due diligence Performance rights commitment Management Downside involvement Target IRR protection +20% Corporate Milestone governance / disbursement ESG Exit plan 21| Classified: Public
Slide 22: ESG factors into our investment process
Environmental, Social and Governance factors into our investment process 13% of Asia-Pacific investors incorporate ESG factors into their decisions or take concrete actions to improve their VinaCapital is a signatory to the portfolio’s ESG performance UN’s Principles for Responsible Investing Privat
Slide 23: Risks, opportunities and resiliency
Risks, opportunities and resiliency Exogenous Risks: Opportunities: • COVID-related issues (global 2nd wave; • Investing into future leaders virus mutation; vaccine rollout) • Access to a deep pipeline of deals • Geopolitical tensions • Leadership or political transition • Strong domestic economy an
Slide 24: Disclaimer
DISCLAIMER The information contained herein has been prepared by VinaCapital Group 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 authority or any inves
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