Investor Presentation April 2016
VietNam Holding (VNH) Fund Information Value investment approach 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-Business Experienced local team Investment Themes Domestic Consumption Urbanization London: VNH:LN Tickers Bloomberg: VNH LN Equity Reuters: VNHq.L ISIN KYG9361X1043 Investment Manager VietNam Holding Asset Management 2
VNH Performance 1-Year Performance Comparison 20% +15.4% +14.9% 10% +0.8% 0% -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 sustainability issues Sources: Bloomberg, VNHAM / 31 March 2016. 3
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 standards New Party leadership with strong commitment to continue reforms Banking and real estate more regulated to maintain healthy growth Derivatives market to be introduced in 2016 Favorable measures for local value-add by supporting industries 4
Real Estate Market Recovery Ho Chi Minh City Residential Market, Annual Sales by Segments Number of units sold 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 infrastructure (metro and highway systems) FDIs accelerate urbanization 5 Source: CBRE Q4-2015.
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 241 Japan 196 Malaysia 187 Hong Kong 163 Indonesia 155 Thailand 149 0 100 200 300 400 500 600 700 800 900 6 Sources: Bloomberg, GSO, fDiIntelligence, VNHAM.
Global Competitiveness: Moving from 75 th to 56 th Vietnam Global Competitiveness Rank 2012 2013 2014 2015 1 10 19 28 37 Ranking 56 th 46 55 70 th 68 th 64 75 th 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 primary education 7 Source: World Economic Forum.
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 included. 8 Source: Bloomberg / 31 December 2015.
Stock Market Performance From 31 March 2015 to 31 March 2016 10% 4.2% 5% 0.8% 0% -5% -5.1% -6.5% -10% -9.4% -9.9% -8.5% -11.1% -12.2% -13.3% -13.5% -15% -14.5% -20% -19.9% -23.1% -25% Vietnam: Malaysia Philippines Indonesia Thailand India China VNAS Local Currency USD adjusted 9 Source: Bloomberg / 31 March 2016.
Stock Market Valuation Regional Valuation India (1.6%) 3.0 2.5 Philippines (1.8%) Indonesia (2.0%) China (2.0%) Thailand (3.3%) 2.0 Price to Book 1.5 Malaysia (3.1%) Vietnam (3.5%) 1.0 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 Index (VNAS); Main bourses of other markets used; Size of bubble is dividend yield (%) 10 Source: Bloomberg / 31 March 2016 / Local Currencies.
VNH Investment Themes 31 December 2013 31 March 2016 3.5% 3.3% 2.5% Theme Allocation Percentage of NAV 19.5% Consumer 18.5% Urbanization 40.2% 42.8% Other 18.5% Agri-Business 31.9% Cash 19.3% 11 Source: VNHAM / 31 March 2016.
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 Valuation Comparison Portfolio EPS Growth VNAS P/Es VNH P/Es 14 30% 11.8 11.6 11.6 11.5 22.7% 11.2 12 10.7 25% 9.7 10 17.7% 20% 8 15% 6 4.9 10% 6.7% 4 5% 2 0% 0 2014 2015 2016F Large Cap Mid Cap Sm Cap Total Market 12 Source: Bloomberg, VNHAM / 31 March 2016.
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 residential developer for middle-income buyers 10% 5% Increasing land bank via M&A activities 0% -5% A professional real estate brand -10% -15% Mar-15 Apr-15 Jun-15 Jul-15 Sep-15 Oct-15 Dec-15 Jan-16 Mar-16 Sustainable development strategy VN All Share Real Estate (exl. KDH) KDH Experienced management team Focusing on core competencies Real Estate Industry Impressive recovery in 2015 Favorable macroeconomic support Confidence back to the buyers Sustainable growth in 2016-2017 Sources: Bloomberg, VNHAM/ 31 March 2016. 13
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 of fruit puree & juice concentrate 15% 10% 8-10% of passion fruit export share 5% Close to 100% of Gac fruit exports 0% -5% Diversified customer base in about 50 export markets -10% Integrated value chain from seedlings to consumption -15% Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Growth potential through a large new factory VN All Share Food & Beverage (excl. NAF) NAF Largest buyer is Flagfood AG in Zug Foods / Agriculture Industry Increasing demand for healthy and pure fruit juices Potential benefits from FTAs for exporters Tax benefits for agribusiness in mountain rural areas Farming sub-contracted to minorities with price gtees Sources: Bloomberg, VNHAM/ 31 March 2016. 14
Traphaco (TRA) Shareholding Year Equitized 1999 / Listed 2008 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 in traditional herbal medication 450% Restructured distribution enhances market access 300% GreenPlan program strictly controls agro chemicals 150% Active cooperation: farmers, government, scientists 0% Addition of an independent Board member -150% Dec-07 Dec-08 Jan-10 Jan-11 Jan-12 Feb-13 Feb-14 Feb-15 Mar-16 Consistent track record for high EPS growth VN All Share Healthcare (excl. TRA) TRA Herbal medicine industry in Vietnam Herbal medicine history for countless generations Increasing demand for herbal products International distribution potential Government development programs until 2020 TRA is a misfit for SCIC’s pharma consolidation plans Sources: Bloomberg, VNHAM/ 31 March 2016 15
Active Engagement Program Mandate Ra pid 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 grade Divest Total grade Divest Total grade Divest grade grade grade # of companies w/t changed Conviction level 14 12 20 # of companies w/t changed Conviction level re. ESG 5 1 1 3 3 3 2 1 1 Regarding E&S issues 1 1 1 1 1 1 Regarding G issues 4 1 1 2 2 2 1 1 16
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% 17 Source: Bloomberg. Peer Group: Weighted Average of DWS Vietnam Fund, Vietnam Equity Holding, Vietnam Enterprises Investment Limited, PXP Vietnam Emerging Equity Fund, and Vietnam Opportunities Fund; ETF Group: Weighted Average of Van Eck Market Vector and DB X-Tracker FTSE Vietnam Index.
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 2016. 18 Peer Group: Vietnam Enterprise Investment Limited, Vietnam Opportunity Fund, and DWS Vietnam Fund.
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