July - 2015 - Vietnam Asset Management (VAM)

Transcription

July - 2015
Table of Content
1. About Us
•
Corporate Introduction
•
Investment Philosophy and Process
•
Track Record
2. Term Sheets for Funds
• Vietnam Emerging Market Fund (Cayman)
• Vietnam Emerging Market Fund SICAV (UCITS Compliant)
3. Vietnam Growth Story
•
Equity Market Overview
•
Macroeconomic Picture
2
About Us
Corporate Introduction
VAM Team
Investment Philosophy and Process
Fund Performance
3
Vietnam Asset Management Ltd. (VAM)
•
Was established in May 2006
• Successful 8-year performance track record
•
Bottom-up stock selection and high-conviction portfolio construction
•
High standards in compliance, risk management and documentation
•
Proprietary system with large database of industry and company analyses
•
Strategic shareholder:
• Strategic partners:
4
VAM Team
Nguyen Xuan Minh, CFA (Co-Founder, Executive Chairman & Fund Manager)
• Nearly 20 years of fund management experience in Singapore and Vietnam
• Was Senior Vice President of Franklin Templeton Investments managing Asian funds
• Board member of Vietnam Airlines and Techcom Securities. Founding member of coming CFA Society of
Vietnam
• CFA Charterholder. A licensed fund manager in Vietnam. Speaks Vietnamese, English and Russian
Thieu Thi Nhat Le, MBA (CEO)
• 12 years experience in management with 6 years in top executive management at VAM
• Master of Business Administration from Maastricht School of Management (the Netherlands)
• Expected to be a licensed fund manager in Vietnam by end of 2015. Speaks Vietnamese and
English
Dao Loc Thanh (Investment Director)
• 8 years experience in investment analysis, fund management and equity trading in Vietnam
• Has extensive knowledge of the Vietnam stock markets
• Bachelor degree in Electronics and Telecommunications from Vietnam National University
• A licensed fund manager in Vietnam. Speaks Vietnamese and English
Nguyen Thi Thu Ha, CFA (Senior Investment Analyst)
• 8 years experience in investment analysis, portfolio management and M&A advisory in Vietnam
• Master of Banking and Finance from Ho Chi Minh City University of Economics
• CFA Charterholder. A licensed fund manager in Vietnam. Speaks Vietnamese and English
5
Investment Philosophy
Bottom-up stock selection with focus on valuation. We like companies
that have strong growth potential, professional & visionary management, sound
balance sheet, low- to no debt, strong free cash flow and cheap valuation.
Concentrated portfolio, high-conviction style. On average we hold
about 12-15 stocks in our non-SICAV funds. In the SICAV fund we will likely
hold 22-25 stocks. We hold only companies which we know well, that have
strong fundamentals, attractive valuations and good corporate governance.
Active portfolio management, zero indexing. Our investment decisions
are based on the individual stocks’ own merits rather than their index
weightings.
Long-term horizon. Generally we invest for the long term, but valuation is
still key to our investment decisions.
6
Investment Process
•
In-house research and analysis of companies
and sectors. Do not rely on brokers.
•
Proprietary company analysis and fund
management system.
•
Following 100+ public companies (out of 667
listed companies) representing 90%+ of total
market cap.
•
5-year earnings forecast with sensitivity
analysis and using various valuation
methodologies.
•
Regular company visits (3-5 visits per week)
and frequent update of analyses (at least 1
update / year for all analyzed companies, and 23 updates / year for each core holdings).
•
Cross checks conducted with industry experts
and other stake holders of analyzed companies.
7
Proprietary VAM Company Analysis System (VCAS)
VAM’s VCAS is among the very first in-house analysis and database system
to be developed by a Vietnam-based asset manager
1. Company Analysis
•
Centralize analysis work by VAM analysts on 100+ public companies (representing 90%+ of total
market cap);
•
Output data can be retrieved as and when needed;
•
Significantly reduce time working on spreadsheets, hence analysts can focus more on qualitative
analysis and meetings with companies;
•
Analyses are safely retained in VCAS and easily transferred in the rare event of analyst turnover.
2. Trading: Help prevent unauthorized trading with multi-layer confirmation requirement.
3. Reporting: Automatically export reports in various forms such as Fund report, Sector report, Portfolio
Management report, etc.
4. Investors Relation: Centralize Clients’ information for easy reference as and when needed.
8
Performance of VAM Fund - VEMF Cayman
Yearly Returns (%)
NAV Performance vs. Peers and Benchmarks
16
Year
2007
(FebDec)
2008
VEMF
VN Index
(USD)
FTSE
Vietnam
Index (USD)
14
12
13.0
-11.20
10
-44.2
-68.8
-62.5
(15Jan-Dec)
2009
49
48.4
39.7
2010
-18.9
-7.2
-14.8
2011
-28.2
-32.8
-51.0
8
6
4
2
0
2012
24.9
18.7
16.0
2013
35.6
20.6
13.6
2014
YTD2015
5.4
-5.9
* As of 29 May 2015
6.7
2.3
8.8
-8.0
VAM's VEMF
VAM's VVSF
VN-Index (USD)
Vietnam Opportunity Fund
Vietnam Holding
Vietnam Growth Fund
Vietnam Emerging Equity Fund
Vietnam Enterprise Investments Ltd
FTSE Vietnam UCITS ETF 1C
Market Vectors Vietnam ETF
(Since Feb 2008 – May 2015)
* Peer comparison chart is usually released with one month delay due
to late NAV reporting of VAM's peers.
9
Source: LCF Rothschild, VAM
Vietnam Emerging Market Fund (Cayman)
Key Terms and Fees
Investment Policy and Strategy
10
Cayman Fund - Key Terms and Fees
Domicile / Launch Date
Cayman Islands / February 2007
Category
Open-ended
Frequency
Monthly NAV and Subscription/Redemption
Symbol
ISIN: KYG 936131005 CUSIP: G93613100
Bloomberg: VAMVEMF KY Equity Reuters: 65092798
Eurekahedge: EH27582
Investment Strategy
Focus on value and growth – Vietnam equities
Fund Manager
Vietnam Asset Management Ltd. (VAM)
Custodian Bank
Deutsche Bank AG Vietnam
Fund Administrator
Deutsche Bank AG Singapore
Auditor
Grant Thornton
Benchmark
VN-Index (in USD term)
Minimum Initial Investment
US$100,000
Fees
Management fee: 2% p.a.
Performance fee: 15% on a high water-mark basis
Redemption fee: 0.5 – 1% (no redemption fee after 1 year)
11
11
Cayman Fund - Investment Policy and Strategy
Investment Objective
To achieve superior long-term financial returns from capital appreciation and dividend
income.
Investment Strategy
The Master Fund shall seek to make investments in companies believed by the Directors
to have good management, sound fundamentals, and attractive valuations that are relative
to the investment risks assumed. The Master Fund’s assets may be invested for varying
periods of time in money market funds, debt securities issued by Vietnamese government
and administrative entities, by Vietnamese companies or by companies established in
jurisdictions other than Vietnam which have significant operations in Vietnam.
Asset Allocation (% of fund NAV)
- Equities and equity-related securities in Vietnam: 0 – 100%
- Cash and Fixed income instruments: 0 – 100%
Investment Restriction
- Not to invest more than 20% of the Fund’s NAV in any one company
- Not to invest more than 40% of the Fund’s NAV in any single industry
Investment Benchmark : VN Index (VNI, USD)
12
12
Vietnam Emerging Market Fund SICAV
Key Terms and Fees
Investment Policy and Strategy
13
SICAV Fund - Key Terms and Fees
Domicile / Launch Date
Luxembourg / June 2014
Open-ended UCITS SICAV, with daily NAV and Subscription/Redemption
• Single fund with four share classes
A Shares (Institutional and HNW, EUR) and B Shares (Retail, EUR)
C Shares (Institutional and HNW, USD) and D Shares (Retail, USD)
•
Structure
Symbols
A Shares
LU1042536018
• IPCVEMA LX
• A1XE8U
B Shares
•
ISIN Code
• Bloomberg ID
• Securities No
•
UCITS IV Management Company
IPConcept (Luxemburg) S.A.
Fund Manager
VAM (Vietnam)
Custodian Bank/Fund Administrator/
Registrar and Transfer Agent
DZ PRIVATBANK S.A., Luxemburg
Auditor
KPMG Luxemburg S.à r.l.
Minimum Initial Investment
EUR500,000
Minimum Subsequent Investment
C Shares
LU1042536281
• IPCVEMB LX
• A1XE8V
D Shares
•
LU1218444351
• IPCVEMC LX
• A14RPQ
•
EUR5,000
USD500,000
USD5,000
EUR100,000
EUR1,000
USD100,000
USD1,000
Upfront Load
Up to 1%
Up to 3%
Up to 1%
Up to 3%
Management fee
Up to 1.64% p.a.
Up to 2.14% p.a.
Up to 1.64% p.a.
Up to 2.14% p.a.
Performance & Redemption fee
Performance fee: 18% over 5% hurdle on high-water-mark basis
Redemption fee: Up to 1%
•
14
LU1218444435
• IPCVEMD LX
• A14RPR
14
SICAV Fund - Investment Policy and Strategy
Investment Objective
To achieve a reasonable performance in due consideration of the investment risk.
Investment Strategy
The Fund will invest in equities and equity-related securities of companies that are based
in Vietnam or that have substantial operations, sales or asset exposure to the
economy, assets or currency of Vietnam. The Fund may invest in public equities as well as
convertible debts and any other equity-linked instruments of listed and unlisted companies
in Vietnam. At the same time, the Fund will also invest into fixed income instruments for
liquidity management purpose.
Asset Allocation (% of fund NAV)
- Equities and equity-related securities in Vietnam: 51% at minimum
- Cash and Fixed income instruments: 49% at maximum
Investment Restriction
The Fund is not allowed to invest in units of other UCITS and UCIs.
Performance Benchmark : Vietnam Index (VNI, EUR)
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15
Vietnam Equity Market Overview
Market Overview
Regional Markets’ Valuation
16
VN Index (HOSE) Timeline
Peaked at 1155.7
(09 Mar 2007);
Market cap of US$31bn
Returns Snapshot:
We launched our
flagship fund VEMF
Cayman (Feb 2007)
•
2013: 22%*
•
2014: 8.1%
•
YTD2015: 6.6%**
Current level (26 June 2015) at 581.75
Market cap US$56bn
with 664 listed companies
2005: Market cap first
reached US$1bn ;
Consisted of 42 listing
companies
We launched VEMF
SICAV (Jun 2014)
Hit bottom low at 244 (04 Mar 2009)
Market cap of US$27bn
*outperformed all other markets in Southeast Asia ; **as of 26 June 2015
Source: VNDirect, HOSE, HNX
17
Vietnam Equity Market Overview
Sector breakdown by market cap
– June 2015
Regional Market Valuation
Valuations Bloomberg
2015 PE
(*)
Code
Others,
20.3%
Materials,
5.2%
Real
Estate,
11.7%
Banks,
28.3%
Energy,
15.4%
Food,
Beverage
&
Tobacco,
19.1%
PEG
Div Yield
(%)
ROE
Market
Cap
US$bn
Philippines PCOMP : IND
17.7
1.5
1.8
13.8
198.5
Malaysia FBMKLCI:IND
15.0
1.8
3.2
12.1
306.6
Thailand
SET:IND
13.4
1.0
3.0
10.7
431.5
Indonesia
JCI:IND
13.2
0.9
2.1
11.3
390.5
Singapore
FSSTI:IND
12.8
1.5
3.4
9.1
431.9
11.0
0.7
3.9
15.0
49.7
Foreign Net Inflow Value (US$mn)
1800
1641
1500
1200
900
600
300
0
756
405
196
213
84
321
185
222
Vietnam VNINDEX:IND
(*) as of June 26, 2015
Source : HoSE & HNX, Bloomberg, VAM’s VCAS
18
Market at a Glance in 2014 – 2015: What Lies Ahead?
Market at a Glance in 2014
•
143 SOEs were privatized;
•
SOEs divested from non-core business worth of
VND4trillion (~US$185mn);
•
First two local ETFs were introduced to the market.
2015 – What Lies Ahead?
•
Target to equitize 280+ companies in 2015 and to finish
equitization of total 532 SOEs in 2016;
•
New investment products are expected to be introduced to
the market: Derivatives; Pension Fund; Real Estate
Investment Trust (REIT);
•
Foreign Ownership Limit (FOL) is approved to have certain
increase in some sectors;
•
Apply several regulations to increase market transparency
and stricter risk management for Vietnamese equity
market.
*source: Government Online News, Vietnam Financial News
19
Why Vietnam?
Favorable Demography; Political Stability; Rich
Natural Resources
Improving Marco Economic Environment
Increasing Manufacturing Shift From China
Booming Domestic Consumption
Property Market Warming Up
Progress on Current Issues
20
Favorable Demography, Political Stability, Rich Natural Resources
Attractive Population Demography (2015F, ‘000 people)
Young Population, 65% at Working Age, 95% Literacy Rate
•
Favorable Demography: a young population
of 92M with ~85% Vietnamese (only 15% in
other ethnicities), 65% at working age, 95%
literacy rate.
•
Competitive Labor Cost: equivalent to ½ of
Chinese or Filipino labor cost.
•
Political Stability: Ranked 3rd in ASEAN and
BRICS, only behind Singapore and Brunei;
Competitive Labor Cost
Minimum Monthly Wage (US$)
•
Net exporter of oil by volume.
•
Mines for tungsten, titanium, bauxite, iron
ore, etc.
300
250
•
200
potential for fishery and tourism industries.
150
100
50
Coast line of over 3200kms, hence enormous
•
World’s No.1 and No.2 exporter of
pepper, coffee and rice; No.4 exporter of
0
seafood.
Source: United Nations (Population Division) - 2015, Philippines Department of Labor and Employment-Jan2015, World Bank-2013
21
Improving Marco Economic Environment
Macro
YTD2015*
2015f
2014
2013
2012
2011
GDP Growth (YoY, %)
6.3
6.2
6.0
5.4
5.0
6.0
Inflation (YoY, %)
1.0
5.0
1.8
6.0
6.8
18.1
Credit Growth (YoY, %)
6.1 (YTD)
15-17.0
11.8
12.5
8.9
10.9
Export Growth (YoY, %)
9.3
10.0
13.6
15.4
18.3
33.3
Import Growth (YoY, %)
17.7
N/A
12.1
15.4
7.1
24.7
Trade Balance (U$bn)
(3.7)
(2.5-3.0)
2.1
0.9
0.3
-9.5
Disbursed FDI (U$bn)
6.3
12.5
12.4
11.5
10.5
11.0
Oversea Remittances (U$bn) (e)
2.0
14.0
12.1
11.0
10.0
9.0
Foreign Reserves (U$bn) (e)
38.0
40.0
36.0
30.0
23.6
13.5
VND Depreciation (%)
2.0
2.0
1.0
1.0
0
10.0
Source: GSO, Vnexpress, Vneconomy, Vietnam BBC, Vietnam News; *as of June 2015
22
Increasing Manufacturing Shift From China
World's no.8 in FDI Attraction
•
•
Ranked 6th among top 10 markets for private sector
capital destinations in Asia-Pacific region (2014).
30
Ranked 2nd in most popular investment destination
25
in Asia-Pacific region based on capital investment
received (2014).
•
Disbursed FDI (US$bn)
Committed FDI (US$bn)
20
15
10
Attractive destination for global leading firms to
5
shift their factories to: Intel (US$1bn), Samsung
0
(US$7bn), LG (US$1.5bn).
•
Free Trade Agreements (FTA) due to be signed in
2015:
•
*Committed FDI in 2008 was US$66.5bn
Top 3 pick for MNCs in Frontier Market
Sentiment Index – June 2014
Vietnam and South Korea (VKFTA) (tariff
barriers removed on more than 90%
products, including e-commerce and legal
institutions); - signed May 2015;
•
Vietnam – Customs Unions of BelarusKazakhstan-Russia (VCUFTA) – signed May
2015;
•
Vietnam – European Union FTA (EUVFTA);
•
Trans-Pacific Partnership (TPP).
Source: Frontier Strategy Group (WSJ) - 2014, Financial Times - 2014 PWC - 2014, GSO
23
Booming Domestic Consumption
•
Ideal demography; Fastest growing middle and
Rising Individual Wealth
GDP per Capita (US$)
2500
2300
affluent class (MAC) in Southeast Asia: expected to
2000
soar from 12M now to 33M by 2020.
•
Ranked 9th globally among the most optimistic
1500
countries – with a Consumer Confidence Index (CCI)
1000
score of 106 (2014).
•
Average 5 years (2010-2014) retail sales growth of
500
17.7%; Retail sales growth reached 7-year high in
0
•
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015f
Jan2015.
Low penetration rate for basic services and products.
3,000
2,500
Regional Healthcare Expenditure
per Capita - 2013 (US$)
2,507
400
350
Regional Number of Motor Vehicles per 1000
361
people - 2013 (except 2-wheelers)
300
2,000
250
1,500
200
1,000
150
500
107
0
111
122
264
423
206
80
100
50
23
100
46
0
Source: GSO, Nielsen – Feb2015, Boston Consulting Group
24
Warming Up Property Market
Absorption Rate of Apartment Sale
•
•
•
Absorption rate of Apartment Sale in HCMC
50%
reached 4-year peak at 22% in 4Q2014.
40%
Unsold real estate inventory value declined
30%
46% as of 1Q2015, in compared to 1Q2013.
20%
Amended Foreigner Ownership Limit on
10%
Housing is expected to further stimulate the Mid
HCMC
Ha Noi
0%
to High-end segment.
•
Continue to disburse the remaining
US$1.18bn of the Government’s support
•
VND bn
package of ~ US$1.4bn for affordable house
140,000
segment in 2015. Disbursed US$226mn so far.
120,000
Quarterly Unsold Real Estate Inventory Value
Attractive credit packages (Loans up to 70100,000
95% unit value; Interest rate 7-8% p.a. for the
first 2 years; Loan period from 20-25 years)
80,000
offered to support reputable developers.
60,000
Source: Savills (1Q2015), Ministry of Construction (May 2015)
25
Progress on Current Issues

NPLs
•
VAMC had bought US$6.1bn as of end 2014;
•
In 6M2015, VAMC purchased US$1.9bn, equivalent to 59% of the whole
year’s plan;
•
SBV targets to bring NPLs down to below 3% system-wide by September
2015. By 1Q2015, the system-wide NPL ratio stood at 3.81%.

Banking Restructure
•
SBV aims to reduce the number of joint-stock banks from 28 currently to 15
by 2017 through M&A;
•
Banks to be consolidated in 2015:
- Mekong Bank acquired by Maritime Bank;
- Southern Bank acquired by Sacombank;
- Saigon Bank acquired by Vietcombank;
- Nam A Bank acquired by Eximbank;
- Dong A Bank to merge with ABBank (planning);
- PGBank to merge with VietinBank;
- MekongHouse Bank acquired by BIDV Bank;
•

Inefficient SOEs
Forcing nationalization of weakest banks (nationalized 2 banks in 1H2015).
•
Pushed hard for privatization process (divested US$197mn in 2014 ;
US$149mn in Q12015);
•
Forced to divest from non-core business .
26
Disclaimer
This report has been prepared by Vietnam Asset Management Limited (“VAM”) or an affiliate thereof
and has been prepared on the basis of information obtained from sources VAM considered to be
reliable, but VAM does not make any representation or warranty, express or implied, as to its
accuracy, completeness, timeliness or correctness. VAM may use certain assumptions or models in
the preparation of this report and different assumptions may provide substantially different results.
No representation is made that any investment or recommendation contained herein is suitable or
appropriate for the recipient and does not constitute an advertisement, solicitation or offer to buy or
sell securities, futures, options or other financial instruments in Vietnam or any other
jurisdiction. This report shall not be a substitute for the exercise of the recipient’s judgment in
making an investment decision and VAM accepts no liability for investment losses.
VAM, its affiliates, related companies and its respective directors and employees, will from time to
time have long or short positions in, act as principal in, and buy or sell, the securities, referred to in
this research.
VAM, its affiliates, related companies and its respective directors and employees accept no liability
for any direct, special, indirect, consequential, incidental damages or any other loss or damages of
any kind arising from any use of the information herein or further communication thereof, even if
VAM or any other person has been advised of the possibility thereof.
Copyright 2015 Vietnam Asset Management Limited. No part of this report may be reproduced or
distributed without the prior consent of Vietnam Asset Management Limited. All rights
reserved. This report may only be distributed as permitted by applicable law.
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28
Appendix
Board of Directors
Current Portfolio & Sector Weight – VEMF Cayman
Current Portfolio & Sector Weight – VEMF SICAV
29
Appendix - Board of Directors
Nguyen Xuan Minh, CFA (Executive Chairman)
• Senior Vice President – Franklin Templeton
• 18 years in fund management
• Master of Petroleum Engineering (Russia) & Master of Finance (Australia)
• CFA charter holder (USA) and licensed Fund Manager in Vietnam
• Speaks Vietnamese, English, and Russian
Esmond Choo (Non-Executive Director)
• Executive Director of UOB Kay Hian in charge of Equity Capital Markets
• 26 years experience in Insurance and Securities businesses in Asia Pacific
• Former Director - RHB Cathay Securities & Sedgwick (Singapore)
• Associated Member of Institute of Chartered Accountants – Australia
• Speaks English and Mandarin
Nguyen Xuan Tung, MSc (Non-Executive Director)
• Many years of experience working in financial analysis field in Australia and Vietnam
• Master degree in Finance (Distinction) from Monash University (Australia)
• A licensed fund manager in Vietnam
•Speaks Vietnamese and English
Thieu Thi Nhat Le, MBA (Executive Director)
• 12 years experience in management with 6 years in top executive management at VAM
• Master of Business Administration from Maastricht School of Management (the Netherlands)
• Expected to be a licensed fund manager in Vietnam by end of 2015
•Speaks Vietnamese and English
30
Current Portfolio & Sector Weight – VEMF Cayman
Current Portfolio (as of June 2015)
Holdings
Sector
Sector weighting against VN-Index (USD)
Jun-15
%
-20%
Stock 1
Stock 2
Real Estate
12.2%
Materials
10.2%
-10%
0%
May-15
10%
20%
30%
Materials
Real Estate
Pharmaceuticals & Biotechnology
Stock 3
Real Estate
7.6%
Stock 4
Materials
7.3%
Automobiles & Components
Energy
Food & Staples Retailing
Media
Stock 5
Energy
6.6%
Stock 6
Food, Beverage & Tobacco
6.0%
Stock 7
Energy
6.0%
Stock 8
4.9%
Technology Hardware & Equipment
Health Care Equipment & Services
Consumer Services
Software & Services
Household & Personal Products
Commercial Services & Supplies
Consumer Durables & Apparel
Stock 9
Retailing
3.6%
Transportation
Stock 10
Energy
3.5%
Total Top 10 Holdings
67.8%
Other Stocks
3.6%
Cash
28.6%
Telecommunication Services
Diversified Financials
Utilities
Capital Goods
Insurance
Source: VAM
31
Current Portfolio & Sector Weight – VEMF SICAV
Current Portfolio (as of June 2015)
Holdings
Sector
Sector weighting against VN-Index (EUR)
Jun-15
%
-20%
Stock 1
Materials
9.6%
Stock 2
Materials
8.3%
-10%
May-15
0%
10%
20%
Materials
Real Estate
Stock 3
Real Estate
Automobiles & Components
7.8%
Transportation
Stock 4
Real Estate
7.0%
Capital Goods
Food & Staples Retailing
Stock 5
Energy
6.1%
Stock 6
F&B
4.9%
Stock 7
Capital Goods
4.6%
Stock 8
4.6%
Media
Technology Hardware & Equipment
Health Care Equipment & Services
Software & Services
Consumer Services
Household & Personal Products
Commercial Services & Supplies
Stock 9
Consumer Durables & Apparel
4.4%
Diversified Financials
Stock 10
Materials
4.2%
Total Top 10 Holdings
61.3%
Other Stocks
29.7%
Cash
9.0%
Insurance
Retailing
Telecommunication Services
Energy
Utilities
Source: VAM
32