VietNam Holding Limited · LSE:VNH
VietNam — Shareholder Meeting (September 2016)
40 slides from VietNam's shareholder meeting presentation, Sep 15, 2016
Slide 1: Annual General Shareholders' Meeting
2006-2016: 10 Years Responsible Investment Annual General Shareholders’ Meeting Zurich, 15 September 2016
Slide 2: Program
Program Keynote Address Investment Case Update General Meeting Businesses Voting VNH Foundation Results of the AGM Adjourn Apéro 2
Slide 3: VNH Performance
VNH Performance 50% VNH NAV VNH Share Price VNAS Index USD Adjusted 40% 30% 20% 10% 0% -10% Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 VNH Performance Drivers: Consistently lower portfolio valuation Disciplined portfolio management Mid-cap centric and
Slide 4: Vietnam back in the Spotlight
Vietnam back in the Spotlight The Economist, 6 August 2016 Financial Times, 29 July 2016 Wall Street Journal, 20 July 2016 Economy Watch, 12 August 2016 4
Slide 5: Recent Developments and Challenges
Recent Developments and Challenges Government's fiscal deficit still prominent: 6.5% of GDP Enhanced privatization: Vinamilk, SABECO, HABECO NPLs under control but sustained banking sector oversight is required to mitigate risks Increased requirements for listed companies to disclose financial data
Slide 6: Stock Market Performance
Stock Market Performance From 31 August 2015 to 31 August 2016 30% 26.6% 25% 20.3% 21.3% 20% 19.4% 15.9% 15% 12.0% 10.7% 10.2% 10% 9.7% 7.4% 8.3% 7.5% 5% 0% -5% -3.8% -10% -8.1% Indonesia Vietnam: Thailand Malaysia Philippines India China VNAS Local Currency USD adjusted Source: Bloomberg / 31 Augus
Slide 7: Stock Market Valuation
Stock Market Valuation Regional Comparison 3.5 India (1.5%) 3.0 Philippines (1.7%) 2.5 Price to Book China (1.9%) Indonesia (1.8%) 2.0 Thailand (3.1%) 1.5 Vietnam (2.5%) 1.0 Malaysia (3.0%) 0.5 0.0 7.5 12.5 17.5 22.5 27.5 Price to Earnings per Share Note: Vietnam: VN All Share Index (VNAS); Main bou
Slide 8: EPS Growth Analysis
EPS Growth Analysis Regional Peers EPS growth (2013 -2015) 20% 10.1% 10% 1.8% 0% Vietnam Indonesia India Philippines China Thailand Malaysia -10% -8.4% -9.4% -20% -14.3% -23.8% -30% -30.0% -40% 2013 2014 2015 VN-Index (Vietnam) EPS growth stable in 2013 – 2015 Higher 2016 EPS growth expected to prio
Slide 9: VNH Investment Themes
VNH Investment Themes 31 Aug 2015 31 Aug 2016 Theme Allocation 3% 5% Percent of NAV 3% 3% Consumer 22% Urbanization 41% 23% 43% Other Agri-Business 32% Cash 26% Source: VNHAM / 31 August 2016. 9
Slide 10: VNH Portfolio Rebalancing
VNH Portfolio Rebalancing Top 10 Companies: % of NAV Comparison 31 Aug 2015 31 Aug 2016 1 Traphaco JSC 8.0% 1 Traphaco JSC 11.6% 2 FPT Corp 7.6% 2 Phu Nhuan Jewelry JSC 8.2% 3 Vietnam Container Shipping JSC 7.1% Thien Long Group Corp 7.9% 3 4 Viet Nam Dairy Products JSC 7.1% Vietnam Dairy Products J
Slide 11: Thien Long Group (TLG)
Thien Long Group (TLG) Shareholding Equitized 1981 / Listed 2010 Year 2013 2014 2015 2016F Market Capitalization USD 187 M P/E 8.5 9.6 14.8 19.4 Foreign Ownership 21% EPS CAGR (2013-2015) 13.1% Free Float 4% Annualized Total Return 91.4% 1000% Investment Case 900% 800% Leading producer and distribut
Slide 12: Traphaco (TRA)
Traphaco (TRA) Shareholding Equitized 1999 / Listed 2008 Year 2013 2014 2015 2016F Market Capitalization USD 173M P/E 13.5 12.4 13.5 20.1 Foreign Ownership 47% EPS CAGR (2011-2015) 15.4% Free Float 82% Annualized Total Return 29.9% 1050% Investment Case 900% Industry leader in traditional herbal med
Slide 13: VNH/VNHAM ESG Activities in 2015-2016
VNH/VNHAM ESG Activities in 2015-2016 Established VNH and VNHAM Board Joint ESG Committee Directors’ Engagement Program: 23 meetings with 21 investee companies, resulting in two exits over corporate governance issues Responsible voting at 2016 Annual General Meetings for every portfolio company 10th
Slide 14: Climate Impact Assessment of VNH Portfolio
Climate Impact Assessment of VNH Portfolio Sectors allocation for the VNAS portfolio Sectors allocation for the VNH portfolio Sector allocation analysis Material sector accounted for 46% of VNH portfolio’s emissions Utilities and material combined responsible for nearly 80% of total emissions of the
Slide 15: Vietnam Fund Universe
Vietnam Fund Universe NAV Performance over different periods to 30 June 2016 Period VNH #2 Ranking Fund VNH Share Price VNAS USD-adjusted 1 year 28.0% 18.2% 18.1% 7.7% 2 years 39.5% 22.6% 45.5% 9.2% 3 years 74.0% 49.0% 71.6% 26.2% 4 years 121.7% 75.8% 101.2% 34.8% 5 years 155.8% 95.4% 176.4% 44.8% F
Slide 16: Investment Case
Investment Case Vietnam Fundamentals remain strong amid regional slowdown Government policy achieved growth with stability Market supported by lifting of foreign ownerships FTAs and strong inflow of FDIs create long term benefits VNH 10 year track record of consistent outperformance Value investment
Slide 17: General Meeting Business
General Meeting Business Ordinary Business Resolution 1 - Report of the Directors & Auditors and Audited Accounts Resolution 2 - Re-election of Director, Min-Hwa Hu Kupfer Resolution 3 - Re-election of Director, Prof. Rolf Dubs Resolution 4 - Re-election of Director, Nguyen Quoc Khanh Resolution 5 -
Slide 18: General Meeting Business: Share Buyback Review
General Meeting Business Share Buyback Review Since Beginning of Share Since last AGM Repurchase Program (September 2015) (September 2010) Number of Shares 14.98 million 4.38 million repurchased % of outstanding 26.63% 7.47% Shares repurchased Average Discount at 24.10% 16.27% Share Buybacks Number
Slide 19: General Meeting Business: Share Repurchase Program
General Meeting Business Special Business Resolution 6 - Share Repurchase Program Renewal of authorities to repurchase up to 10% of Ordinary Shares in issuance Extension of Program until next AGM Holding repurchased shares in Treasury Transfer only at discount less than the weighted average discount
Slide 20: General Meeting Business: Re-domiciling the Company
General Meeting Business Special Business Resolution 7 – Re-domiciling the Company Authorise the Directors to continue the process of re-domiciling the Company to Luxembourg Enhance VNH's investment proposition and potentially raise share liquidity Minimal disruptions expected for Shareholders Overa
Slide 21: AGM Voting
AGM Voting Counting of votes submitted at the AGM and beforehand via proxy 21
Slide 22: VNH Foundation
VNH Foundation Motivated by a dedication to social responsibility for the young people of South East Asia, the foundation is the creation of the founder of VIETNAM HOLDING and VIETNAM HOLDING ASSET MANAGEMENT LTD. The VNH FOUNDATION locates and supports charitable projects that will help meet the ne
Slide 23: VNH Foundation
VNH Foundation Projects supported so far by the VNH Foundation Cooperation with University Hospital of Basel: Medical training to DaNang Building and operation of an Orthopedic Hospital orphanage in southern Thailand Donated entire operating room for orthopedic surgeries. Treats, among other, deform
Slide 24: Danang Orthopedic and Rehabilitation Hospital (DORH)
Danang Orthopedic and Rehabilitation Hospital (DORH) Project was launched 9 years ago VNHF’s initial donation of a state-of-the-art orthopedic operating equipment Capacity increased from 780 to a 4’000 operations per year operations per year. MDs from Basel University Hospital & Orthoklinik Dornach
Slide 25: Blue Dragon Foundation
Blue Dragon Foundation Blue Dragon Children’s Foundation is an Australian charity working in Hanoi with children in crisis Activities: street kids, children with disabilities, children from rural families living in Hanoi on the streets, who are victims of human trafficking and slavery, mostly to Chi
Slide 26: AGM Results
AGM Results Announcement of AGM results by Chairperson 26
Slide 27: Contact
Contact VietNam Holding Asset Management Ltd. Ho Chi Minh City Zurich Floor 8, Nam A Bank Gartenstrasse 19 201-203 CMT8, Dist. 3 CH - 8002 Vietnam Switzerland +848 3929 1511 +41 43 500 2810 www.vietnamholding.com | [email protected] blog.vietnamholding.com 27
Slide 28: VietNam Holding (VNH)
VietNam Holding (VNH) Value investment approach Fund Information 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 outperformance Agri-
Slide 29: VNH History 2006-2016
VNH History 2006-2016 2015 Second Warrants Issue 2013 First Continuation Vote 2012 Issue of Bonus Warrants 2010 Introduction of Share Buyback Program 2009 Signing of UN PRI 2007 Foundation established First VNH Forum 2006 Launch 29
Slide 30: Vietnam Country Profile
Vietnam Country Profile Population 94.3 million - 15th largest Transition economy - 10+ year lag to China Demographic dividend - Median age 29.6 years Labor education - Literacy 94.5% Resources - Minerals, Oil & Gas, Tourism etc. Homogenous population - 85.7% ethnic Kinh Trade stability - ASEAN+3 Ma
Slide 31: Macroeconomic Picture
Macroeconomic Picture 2012 2013 2014 2015 2016F* GDP Growth 5.2% 5.4% 6.0% 6.7% 6.3% Inflation 6.8% 6.0% 1.8% 1.3% 4.5% Export Growth 18.2% 15.4% 13.6% 8.3% 7.3% Import Growth 7.4% 18.3% 12.1% 11.9% 4.3% Trade Balance USD 0.7 bn USD 0.9 bn USD 2.0 bn -USD 3.2 bn USD 1.4 bn FDI Disbursement USD 10.5
Slide 32: Foreign Direct Investments (FDI)
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) Registered and Disbursed FDI 2016 (US$bn) 16 12 8 4 0 Jan Feb Mar Apr May Jun Jul Aug Registered FDI Disbursement FDI (YTD) Sour
Slide 33: Stock Market Capitalization
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 inc
Slide 34: Investment Approach
Investment Approach Market Segments Large Cap Mid Cap Small Cap 8% 4% 3 Weekly investment committee meetings 23% 123 Very disciplined portfolio management 71% 17 Strict conflict of interest avoidance 69% 70 25% 5 Mid-cap centric portfolio 30 VNAS Weighting VNH Weighting VNAS Companies VNH Companies
Slide 35: VNHAM Investment Process
VNHAM Investment Process Investment Investment ESG Analysis Universe Proposal Policy & Risk Mgmt Portfolio Portfolio Selection & & HOSE 309 Construction HNX 378 & Decision Management Compliance UpCom 319 Valuation 20-35 stocks • Investment Target Screening • Company visits • Asset • Economic Cycle •
Slide 36: FPT Corp (FPT)
FPT Corp (FPT) Shareholding Equitized 2002 / Listed 2006 Year 2013 2014 2015 2016F Market Capitalization USD 904M P/E 8.0 10.1 11.0 10.5 Foreign Ownership 49% EPS CAGR (2013-2015) 3.6% Free Float 70% Annualized Total Return 29.4% 200% Investment Case 150% Industry leader in IT and telecommunication
Slide 37: Nafoods Group (NAF)
Nafoods Group (NAF) Shareholding Equitized 2010 / Listed 2015 Year 2013 2014 2015 2016F Market Capitalization USD 43M P/E n/a n/a 17.1 23.2 Foreign Ownership 11% EPS CAGR (2013-2015) 97.0% Free Float 62% Annualized Total Return 12.5% 70% Investment Case 60% 50% A leading exporter of fruit puree & ju
Slide 38: Century Synthetic Fiber Corporation (STK)
Century Synthetic Fiber Corporation (STK) Shareholding Equitized 2000 / Listed 2015 Year 2013* 2014* 2015 2016F Market Capitalization USD 48M P/E n/a n/a 20.1 13.5 Foreign Ownership 12% EPS CAGR (2013-2015) -5.5% Free Float 69% Annualized Total Return -17.9% Investment Case (*): STK listed since 9/2
Slide 39: Discount Management
Discount Management NAV & Share Price Performance Discount 300% 50% 250% VNH NAV Performance VNH Share Price Performance VNH Daily Discount 25% 200% 150% 0% 100% 50% -25% 0% -50% -50% Share buyback program: USD 8.6m in FY 15-16 Active investor relations Potential reissue of treasury shares: 9.6 mill
Slide 40: Disclaimer
Disclaimer This presentation ("Update") is for information only and does not constitute or form part of any offer, inducement or an invitation to sell, acquire or issue, or any solicitation of any offer to purchase or subscribe for, any shares or securities including any ordinary shares (“Ordinary S
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