VinaCapital Vietnam Opportunity Fund reports an NAV total return for the year ended 30 June 2020 of -1.5% in US dollar terms but +1.2% in sterling terms and a fall in its share price from $4.34 to $4.07. The VN Index fell by 12.7% over this period. The dividend is being maintained at 5.5 cents.
Despite good success in controlling the virus, the pandemic has weighed on Vietnam’s economy, with tourism (8% of GDP) hit hard. GDP growth is forecast to come in at 3% this year. Nevertheless, money is still flooding into the country, with $12.2bn invested in the first six months of 2020 (up 17.5% on the previous year).
The manager’s provides detailed information on a number of companies which we will not reproduce here. However, we suggest that you read the annual report when it becomes available. Notable points include a 37% uplift in the share price of steel producer Hoa Phat Group over 2020 – this is VOF’s largest holding; a 10.8% fall in the share price of Airports Corporation of Vietnam (COVID-related); a post period-end recovery in the value of their stake in Orient Commercial bank, after a Japanese bank made a significant investment in the company; and the resolution of a dispute between the chairman and an investor in Coteccons construction – again after 30 June.
Two new unquoted investments were made totalling $37.5m; the first into Ngoc Nghia, a leading consumer packaging company; and the second into IN Holdings, a leading hospitality / events operator in Ho Chi Minh City. After the financial year end, VOF also completed a private equity investment in Thu Cuc International General Hospital, the leading private hospital group in Hanoi.
After the financial year end, VOF sold International Dairy Products (IDP), its largest private equity investment (7.1% of NAV), to free up $77m and add 14 cents to the NAV.
VOF : Vietnam Opportunity reports solid results