VietNam Holding Ltd (LSE:VNH, FRA:2YL)'s net asset value per share doubled in dollar terms and rose 78% in sterling terms to 333p, according to its annual report for the year to 30 June 2021.
As of 29 September, the latest available date before approval of the Vietnam focused investment trust’s accounts, the estimated NAV per share was 347.3p and the share price was 295p, meaning the discount to NAV narrowed from 20.4% at the year end to 15.1%.
Chairman Hiroshi Funaki said the board was continuing to focus on narrowing the discount and has utilised three main discount control measures: marketing; share buybacks and tender offers.
Looking at Vietnam's economy, Funaki said the country’s gross domestic product grew close to 3% and is estimated to increase by close to 4% in 2021.
“This is nearer to its remarkable multi-decade growth average even though like many countries it has been grappling with the rapid spread of the Delta variant.
“Although the nation has struggled somewhat with this fourth wave, the pace of vaccinations is picking up with 1 million doses a day being given recently, and there are plans in place to lower quarantine restrictions for vaccinated arrivals.”
The combination of investment manager Dynam Capital’s active stock selection and investment management process and Vietnam's equity market being one of the best performing stock markets in the world, boosted the company's NAV per share and share price, putting the company firmly at the top of various performance tables.
With 30% of the adult population now having received at least one dose, and an estimated 6% two doses, he said it is hoped that higher vaccination numbers will allow Vietnam to open up travel and inbound visits from foreign investors. "This might go some way to encourage more foreign participation in the stock market, which has been eclipsed by the surge in domestic investor interest”.
He also noted that the company has announced its support for the Paris Agreement and committed to the Task Force on Climate-related Financial Disclosures. Furthermore Dynam has also become a member of the Asia Investor Group for Climate Change and that the estimated average carbon-footprint of the company's investment portfolio over the last two years was 35% lower than the equivalent index.
In its section of the report, Dynam said 11 positions were sold and 13 added, with its main investment approach remaining focused on three broad themes, “industrialisation (best-in-class manufacturers, international logistics); urbanisation (purposeful real estate, transportation, clean energy and clean water); and domestic consumption and its enablers (sustainable retail, domestic logistics, products and finance)”.
Dynam acknowledged that Coronavirus (COVID-19) “remains as a significant risk” to Vietnam in the short-term, with the vaccination rollout still is in the early stages.
“We think the stubborn nature of the Delta variant will mean that Q3 and Q4 2021 corporate earnings are inevitably weakened. That said, we expect Vietnam to bounce back strongly in 2022, and think domestic consumption will drive the growth of the economy moving forward.
“The portfolio in 2022 may be different to that in 2021 in terms of some of the key names and themes, but we are targeting EPS growth of more than 20% across the portfolio and remain committed to maintaining our significantly lower carbon footprint than the equivalent index.”
Dynam said it will watch for emerging themes coming out of the pandemic, and aims to position the portfolio for growth within a three to five-year investment horizon. This "means looking through short-term noises and volatility in search of longer-term value derived from robust compounding growth of well-managed companies with proven sustainable business strategies”.