Vietnam Holding Limited (LON:VNH) has said domestic demand in the South East Asian country, including that derived from online shopping, is “rebounding much faster than expected” from disruption caused by the coronavirus pandemic.
In an investor report, the closed-end fund said Vietnam’s external exposure to tech supply chains has “helped offset some weakness in traditional manufacturing sectors” during the pandemic, and that while its portfolio’s net asset value (NAV) was down 2.6% month-on-month it was “optimistic about Vietnam’s fast-growing use of e-commerce and believe it will be a cornerstone of the country’s economic road to recovery”.
The fund also said ICT firm FPT Corp, the largest weighting in its portfolio, was “well-positioned for the heightened focus on tech and e-commerce”, saying spending in ICT is widely expected to rebound in 2021 while growing content consumption in Vietnam also boded well for FPT.
VNH also said another one of its portfolio groups, online parcel delivery group Viettel post, was continuing to benefit from “online growth and upsurge in goods delivery in Vietnam, particularly given its extensive postal coverage and large client base”.
"[Viettel] has a critical competitive advantage since it manages Viettel Telecom’s stores and point of sales, which has a subscriber base of around 67 million as of year-end 2019. To put that into context, that is almost 70 percent of the country’s population", the fund said, adding that the portfolio firm could also benefit from the Viettel Group’s newer digital services and expected rise in cashless payments in Vietnam.
Finally, the fund said its third largest holding, Mobile World Group, which operates Vietnam’s fifth most popular website, has “stood out for innovatively matching local needs and thoroughly looking after its stakeholders during the pandemic”, and they expected the company to “make further strides in its online grocery business expansion” in the second half of 2020.
Shares in Vietnam Holding were trading at 159p in early afternoon on Friday, a 14.9% discount to its current NAV of 186.8p.