2016 INVESTOR CONFERENCE October 2016 Park Hyatt Saigon, Ho Chi Minh

Transcription

1 2016 INVESTOR CONFERENCE October 2016 Park Hyatt Saigon, Ho Chi Minh VinaCapital Vietnam Opportunity Fund Andy Ho Chief Investment Officer Managing Director

2 VOF overview Launched Migrated from AIM to the LSE Main Board on 30 th March A closed-end fund, domiciled in Guernsey. High-conviction, multi-asset strategy. Focus on sectors that benefit from domestic consumption and infrastructure growth in Vietnam. Net Assets USD850.4m or USD4.08/share (+25.9% CY2016 YTD), Market Cap USD650m (30 Sep 2016). VOF is one of the largest and most liquid Vietnam closed-end funds. Discount to NAV 23.6% (30 Sep 2016), current estimate 22% (7 Oct 2016) Ongoing share buyback programme has returned $242m 1 to investors over the past 5 years. Managed by an experienced, institutionalised team across asset classes including private equity, listed equities and real estate. Fully independent, non-executive board with deep experience in Vietnam and other emerging markets. As at 30 Sep 2016, VOF has spent USD242 million overall repurchasing 116 million shares which have been cancelled and total voting rights in the Company are now 208,646,258 2

3 Why VOF

4 VOF strategy VOF s strategy takes advantage of market inefficiencies by investing in public and private equity. 1 50% of VOF is invested in a high conviction portfolio of c.20 quoted investments, unconstrained by index weightings. 2 Strong record in private equity and privatisations Achieved a weighted average gross IRR of over 20% 1 across 40 specific fully realised private equity deals 2 3 Unique ability to invest in SOE privatisations on a selective basis. 4 Legacy real estate portfolio is being reduced, with several large exits recently completed. Note: The private equity track record is for the private equity portfolio within VOF; returns are only for 40 specific fully realised deals in the private equity portfolio 1 Weighted average gross returns based on total equity invested. Net returns are unavailable because the private equity investments are part of a multi-asset strategy portfolio from VOF. The expenses for VOF are not broken down by asset class 2 Includes SOE privatisation, private company and PIPE deals as of 31 August 2016; does not include convertible debt transactions SOE privatisations: Investments made into state-owned enterprises (SOEs) during the process of privatisation Private company: Privately negotiated investments made into a privately-held company, usually accompanied by special rights, terms and/or minority protections PIPE: Privately negotiated investment made into an OTC, public-held or listed company 4

5 Click to to edit Master title VOF style portfolio and performance Performance is driven by our conviction to large public equity holdings, private equity investments, and OTC investments (pre-ipo and privatisations). Annualised returns 4.1% 3.1% Asset class 1 FY2016 Last 3 years 1 Last 5 years 1 6.6% Capital market 25.0% 15.4% 9.8% 6.7% 7.8% 8.5% NAV USD850.4m 50.9% 12.3% Listed 22.0% 15.7% 8.8% OTC 60.2% 12.7% 13.4% Private equity (0.9%) 25.9% 21.3% Real estate projects 10.3% (9.2%) (9.2%) Listed Equity Private Equity Operating assets Bonds Real estate projects Unlisted Equity Cash and others Overseas Equity VOF NAV/share growth 16.4% 10.9% 6.0% VN Index (USD) return 3.7% 10.4% 0.5% Investments by asset class as of 30 Sep Returns are compounded monthly returns 2. Not all asset classes are stated, for a complete table of performance across all asset classes see appendix 3. Source: VOF Audited FY Reports, 30 June December VOF unaudited reports July 2015 May

6 VOF top ten holdings Investee company % of NAV Asset class Sector Description Vinamilk (VNM) 16.1 Listed Food & Beverage Leading dairy company with dominant market share 2016 earnings growth Foreign ownership premium 28% 0% Hoa Phat Group (HPG) 9.7 Listed Materials Largest steel manufacturer in Vietnam 53% 0% Sofitel Legend Metropole Hotel Hanoi 7.1 Operating asset Eximbank (EIB) 4.8 Listed Financials International Dairy Product 4.4 Private equity Food & Beverage Phu Nhuan Jewelry (PNJ) 4.4 Listed Hospitality One of Vietnam's best 5-star hotels 10% N/A Consumer Discretionary One of Vietnam's top ten commercial banks One of the top five dairy companies with potential growth The largest jewelry manufacturer and distributor in Vietnam 150% 0% 40% N/A 160% 7% Khang Dien House (KDH) 4.3 Listed Real Estate Developer of affordable town houses 100% 7% Quang Ngai Sugar JSC 3.6 OTC Food & beverage VinaLand Ltd (AIM:VNL) 2.8 Listed Petrovietnam Technical Services Corporation (PVS) Total 60.0% Real estate & construction 2.7 Listed Mining, oil & gas Diversified FMCG producer with dominant market share in soymilk VCIM-managed Vietnam real estate fund Leading oil and gas technical service provider in Vietnam. N/A N/A N/A N/A 10% 0% As of 30 Sep 2016, excludes cash and government bond holdings Source: Bloomberg, VinaCapital research 6

7 VOF listed equity holdings 1 Represent 54% of the Fund with a concentrated portfolio of conviction holdings in <20 stocks. 2 Focus on domestic consumption growth with little exposure to import/export related companies, hence less risk from macroeconomic variables such as FX and/or trade policies (TPP). 3 Investments mostly come from prior privatisations and PIPE deals, which allows VOF to take meaningful positions without impacting price given current stock market liquidity. 4 Valuation of 14x 2016 lower than market multiples but earnings growth >20%. 5 Our active stock selection strategy has generated superior returns of 41% vs 14% and doubled peers CY2016 to August. 1. Source: Bloomberg 7

8 Vietnam Stock Market

9 Click to to edit Master Vietnam title style outperforms ASEAN peers The market continues to trade at a discount but the valuation gap is expected to close as the market s breadth and depth increase. Trailing PE Source: Bloomberg, VinaCapital research THAILAND (Div yield: 3.3%) INDONESIA (Div yield: 1.8%) Trailing PE, ROE (%), September 2016 MALAYSIA (Div Yield: 3.1%) SINGAPORE (Div yield: 3.9%) CHINA (Div yield: 1.9%) PHILIPPINES (Div yield: 1.7%) VIETNAM (Div yield: 2.3%) ROE (%) 9

10 Billions Click to to edit Master Capital title markets style continue to improve Total market cap of USD69.5 billion 1 across 2 exchanges and 690 listed companies. Foreign interest continues to accelerate on expectation of further privatisations and lifting of FOL. Last price Volume 1,600 1,400 Improved liquidity as market deepens and progressive reform ,200 1, Rapid influx of hot money VNIndex Volume - RHS VNIndex Last Price - LHS MSCI EM Last Price - LHS 1. Market cap of combined bourses, Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX), as of 30 Sep VNIndex represents HOSE only. Source: Bloomberg, VinaCapital Research & Analysis 10

11 Lifting Click to of to foreign edit Master ownership title style limits has quickened pace Foreign ownership events in Q A number of companies have removed their FOL, including Vinamilk and Domesco May 2016 Feb 2016 Almost a dozen companies have taken steps towards increasing their foreign ownership limits Three companies indicated they will seek approval to allow 100% foreign ownership Oct Sep Government indicates its intention to sell stakes in several companies, which will need to increase their limits to extract full value Government clarifies companies will set their own limits 1, Saigon Securities Co(SSI) is the first to remove their foreign ownership limit June 2015 Decree 60 is released indicating foreign ownership restrictions will be reduced 1. Government clarifies companies will set their own limits up to their maximum FOLs, which corresponds to their respective business activities/industries. 11

12 Attractive Click to to investment edit Master opportunity title style in SOE privatisations Vietnam is forecast to experience some of the fastest IPO growth in the world, with a 208% increase expected between 2015 and largely driven by SOE privatisations Expected 2016 IPO pipeline Core business Market cap / Charter capital (USDm) Steady privatisation of SOEs 3 Number of privatised SOEs by year 222 Sabeco Consumer goods 3,767* Satra Group Consumer goods 3,041* 174 Vietnam Rubber Group Industrial production 1, Benthanh Group Real estate 1,113 Mobifone Telecommunicati on Vissan Consumer goods 349* Song Da Corporation Infrastructure Vinapharm Pharmaceutical 106 Vietnam Expressway Corporation Infrastructure 45 Vietjet Airlines Airline * Estimated market capitalisation. Numbers without * are estimated charter capital. 2. Source: Global M&A and IPO Activity to Accelerate Until Baker & McKenzie. 3. Source: General Statistics Office, State Bank of Vietnam, Grant Thornton Private Equity Survey, February 2016, VinaCapital Research & Analysis. 12

13 Private equity overview The fund continues to review both government and private opportunities 1 VOF s PE team has generated superior returns of over 20% over 40 fully realised investments. 2 PE is focusing on private companies particularly in the consumer and infrastructure sectors to gain exposure to Vietnam s growing middle class and the government s plan to spend USD2.5b per year over the next five years. 3 Currently 12%, the PE portion of the fund will increase to 20% in the next 1-2 years, and we are reviewing a dozen transactions worth >USD100m. Note: The private equity track record is for the private equity portfolio within VOF; returns are only for 40 specific fully realised deals in the private equity portfolio 13

14 Click to to edit Master Private title style equity investment summary In total, VinaCapital s Vietnam Opportunity Fund (VOF) has invested nearly USD780 million across 92 private equity-related transactions since inception 1 Private equity investments by transaction type 2 Private equity investments by sector 33 Investments by Type of Deal 2 Investments by Sector % 15.2% 92 deals 59.8% SOE Privatisation Private Company PIPE (in OTC & Listed Equity) 8% 13% 6% 2% 7% 92 deals 21% 16% Consumer Staples Industrials Materials Consumer Discretionary Financials Health Care Energy 13% 14% Utilities Information Technology Note: The private equity track record is for the private equity portfolio within VOF 1 Includes private company, SOE privatisation and PIPE deals as of 31 Aug 2016; does not include convertible debt transactions 2 Percent of total number of private equity deals as of 31 Aug 2016 SOE privatisations: Investments made into state-owned enterprises (SOEs) during the process of privatisation Private company: Privately negotiated investment made into a privately-held or non-listed company, usually accompanied by special rights, terms and/or minority protections PIPE: Privately negotiated investment made into an OTC, public-held or listed company 3 Percent of total number of private equity deals by GICS sector as of 31 Aug

15 Click Actively to to edit participate Master title in style private equity investments Board membership Strategic advisory & market research Leadership Recruitment & HR Business development Corporate governance Operational support VinaCapital plays an active role in investee companies, providing ongoing support in a number of areas Transaction summary Education Leading international school in Vietnam Management buy-out Exited via trade sale to Cognita Consumer goods Leading coffee producer in Vietnam SOE privatisation, stake purchased in auction Exited via trade sale to Masan Group Constriction materials Vietnam s leading ceramic tiles manufacturer Growth capital and brought in strategic investor Exited via trade sale to Siam Cement Group Agriculture leading seeds and agriculture company in Vietnam Growth capital and corporate governance Exited via trade sale to Standard Chartered Private Equity Healthcare leading private hospital operator Management buy-out Exited via trade sale to Fortis Consumer goods Vietrnam s leading soymilk producer 2015 present 50% upside based on latest mark to market Investment returns Investment: USD4.5m Gross Return: IRR 55%, multiple 4.2x Investment: USD5.0m Gross Return: IRR 19%, multiple 1.8x Investment: USD15.2m Gross Return: IRR 33%, multiple 2.4x Investment: USD30.6m Gross Return: IRR 23%, multiple 2.7x Investment: USD10.3m Gross Return: IRR 37%, multiple 2.3x Investment: USD14.7m Unrealised return: 50%, multiple 1.5x 15

16 Case study of private company (current investment): An Cuong Woodworking A leading wood-working and decorative materials company based in Ho Chi Minh City, which serves the domestic market and exports to Japan, Southeast Asia, North America and Europe Value of exports of wood and wooden products (USDm) 1 Transaction summary Return drivers & investment rationale Value creation 4, , , ,891.6 June 2016, VOF alongside DEG invested USD30 million into An Cuong Joint Stock Company The company currently offers the largest range of decorative surfaces in ASEAN with more than 1,000 variations of colours and grains that can be matched and customized with various core materials The products are primarily used for producing modern furniture with extensive applications for furniture components and made to assembly furniture Consistent growth rate of 30 35% over the past several years, annual turnover of over USD70 million in 2015 The company has dominant market share in branded MFC panels (50%) and laminate panels (70%) Wood-based materials are slowly taken over solid wood due to cost competitiveness and changing consumer habits Compelling growth prospects on the back of solid recovery in Vietnam s real estate market Introduction of independent director who has expertise in sales and marketing to help with new strategic initiative Appointment of CFO to oversee the implementation of ERP and financial reporting Active participation at board and management level to advise the founder/ceo on Company s strategic direction and financial management Appoint E&S expert to conduct full review and implement E&S action plan Furniture and Furnishing Spending in Vietnam (USDbn) Opportunity for value creation through professionalising management, financial reporting & systems, corporate governance and E&S matters Introduce and connect the company to business network and new opportunities e 2015f 2016f 2017f 2018f 2019f 1. Source: 2015 GSO Statistical Yearbook. 2. Source: BMI, PwC Estimates. 16

17 Case study of SOE privatisation (current investment): Vinatex Vietnam National Textile & Garment Group Vinatex is one of Vietnam s leading textile and garment corporations, involved in the import, export, production and distribution of textile and garment products Vietnam textile and garment exports by country (2016) 1 Transaction summary Vinatex held an IPO through a public auction in September 2014, successfully selling 47% of the company VOF acquired a 3% stake in Vinatex and brought in a strategic partner, Itochu, who also acquired a 3% stake Return drivers & investment rationale Vinatex has a strong network and infrastructure for the import, export and distribution of textiles in Vietnam and internationally Textile and garment exports accounted for USD15.6 billion year-to-date August 2016, or nearly 14% of total export value over the same time period 1 Vietnam s increasing integration into global trade through various free trade agreements will enhance the market for Vietnamese exports Value creation Obtained one board seat out of a seven-member board Assisted management in a strategic investment program to enhance vertically integrated production process Fostered relationship with Itochu to help Vinatex boost trade ties and technical knowhow Assisted management with corporate governance and financial reporting Worked with the company and other shareholders to prepare for listing 2% 2% 3% 3% 4% 9% 16% 12% 49% Vietnam exports by percent of total export value (2016) 1 5.6% 7.5% 9.8% 13.8% 19.9% 43.3% United States Japan South Korea China Germany United Kingdom Netherlands Canada Others Machinery and equipment Footwear Computers and parts Textiles and garments Telephones, mobile phones and parts Others 1. Source: Vietnam Customs Office, data represents year-to-date figures as of August

18 Case study of SOE privatisation (exited investment): DHG Pharmaceutical JSC DHG Pharmaceutical is the No.1 domestic generic drugs producer in Vietnam with 5% market share, extensive distribution network and strong management team Vietnam Drugs Expenditure (USDbn) Transaction summary Since the initial investment in 2004 through an IPO auction, VOF invested USD17m to acquire a 7.3% stake in DHG VOF exited the investment in June 2016 and realized a 75% IRR Return drivers & investment rationale Top production capacity in the industry with diversified product mix Widest distribution network among domestic pharmaceutical companies A fundamentally good company with attractive net margin of over 14% (amongst the highest in the industry) and solid balance sheet (rich cash and no debt) Proven track record of 19% net profit CAGR over Excellent management team Value creation Obtained one board seat Advised management on company strategy Worked with management to find a strategic investor (Taisho, the leading pharmaceutical company in Japan) $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 $200 $160 $120 $80 $40 $ Expenditure on local drugs Total expenditure DHG Revenue and Net Earnings (USDmn) Revenue Net Earnings 1. Source: Drugs Administration of Vietnam 18

19 Case study of private company (current investment): Novaland Group (NVLG) Novaland is a leading private residential real estate developer in Vietnam with an established reputation as a developer focusing on well-located, mid-scale projects with a large land bank and the ability to execute Residential units sold in HCMC 1 29,048 14,758 Transaction summary NVLG sought to obtain capital to expand and leverage its strong position in Ho Chi Minh City VOF invested USD15m into a convertible preferred stake in NVLG with a 5% running yield, 15% minimum IRR and significantly discounted convertible options Income and capital growth with significant downside protections to investor Return drivers & investment rationale NVLG is currently valued at USD1.4bn, with a total of 16,000 sold and pre-sold units NVLG is developing ~35 projects with over 20,000 apartments selling at prices ranging from USD100k to USD350k per unit NVLG has a large land bank of 23ha in Ho Chi Minh City, and sold more than 16,000 units from , and 23% of all residential units sold in Value creation Helped connect NVLG with VinaCapital partners for business collaboration Provided NVLG with land bank opportunities for future project development Consulted with the company on funding strategy 8,000 6,000 4,000 2,000 5,979 1, ,464 Novaland yearly units sold and new projects launched ,464 7, Novaland Other 11 7, , Units sold New project launches 1. Source: VinaCapital Research & Analysis, CBRE Vietnam 19

20 Case study of private company (current investment): Thai Hoa International Hospital Thai Hoa International Hospital is a premium healthcare facility in the Mekong Delta, with strong leadership and high quality equipment and services Doctors, beds per 10,000 population (2014) Transaction summary Thai Hoa sought capital to pay down debt and expand operations VOF invested USD9m for a controlling stake in Thai Hoa International Hospital, a leading healthcare provider located in the Mekong Delta region Return drivers & investment rationale Thai Hoa currently has 200 beds, with the ability to scale up to 300 beds in the same location The hospital employs 30 doctors, and is capable of treating over 300,000 patient visits per year The number of private hospitals is expected to grow (currently accounting for 14.5% of all hospitals) as overcrowding and poor service continue to plague the public hospital system Value creation Appointed an independent board member to help the company improve its management system Helped the company refinance its debt and created a source of funding for launching new clinics Identified and employed a CFO to enhance the company s financial systems Identified and employed a Head of Business Development Deployed a management incentive plan Mekong Delta Vietnam HCMC Doctors per 10,000 population Beds per 10,000 population Public and private hospitals breakdown 2 1,002 1,030 1,040 1,042 1,069 1, Private hospitals Public hospitals 1. Source: GSO 2014 Statistical yearbook 2. Source: Business Monitor International 20

21 Property sector overview The Fund continues to Divest of direct Real estate investments. 1 Together with VNL, which is in the process of a realisation strategy, we sold a number of projects this year, including Century 21, Pham Hung Road, and Danang Golf, which generated proceeds of USD50m and in excess of NAV. 2 DRE has reduced from approximately 15% of NAV in prior year to less than 7% currently, and cash will be recycled to PE and Listed. 3 We have visibility on continuing reductions over the next months. 13.9% DRE 11.7% Reduced to 6.9% 8.5% Operating Assets CapM and others 74.4% 84.6% 21

22 Performance & Summary

23 Capital markets (listed and OTC) performance compared to peers For CY2016 YTD and FY2017 1, VOF s capital markets portfolio outperformed its peers 2, VN Index (USD terms), ETFs and MSCIs with highest returns of 41.4% and 14.3%, respectively. 41.4% 14.3% 20.6% 17.5% CY 2016 YTD FY % 7.7% 6.7% 2.8% 7.8% 3.6% 3.2% 7.1% 4.2% 3.0% Over FY2012 FY2016, the 3-year and 5-year annualised returns of VOF s capital markets portfolio ranked first, as compared with its peers, VN Index (USD terms), ETFs and MSCIs with highest returns of 11.82% and 11.79%, respectively. VOF CM Peers Average VN index VNM ETF FTSE ETF MSCI EM MSCI VN 11.8% 11.8% 10.6% 8.3% 8.2% 6.1% 3.6% 4.0% -1.3% -2.1% -2.9% -4.7% -4.6% 3-year annualised returns 5-year annualised returns -0.6% 1. Source: Numis Securities Country Funds Parity report as of 31 Aug Calendar year performance per Numis. Fiscal year to date performance based on NAV per share in USD terms. 2. Capital Market peers include VNH, VEIL, VEH and the VN Index. 23

24 Millions of shares Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Click to to edit Master title style VOF discount management and share buyback programme Since implementing the buyback programme VOF has reduced its discount, and the main board listing has increased both trading and liquidity VOF share price, NAV and shares bought back 30 Sep 2016 (USD, millions) NAV/share USD4.08 Discount 23.6% Share price USD Share buyback commenced Oct 2011 Month Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 VOF NAV 1 $689.2m $691.5m $694.4m $671.8m $687.9m $723.3m $747.0m $756.3m $796.8m $809.6m $851.2m $850.4m NAV/share/ share price Share b/back $3.18 / $2.58 $3.21 / $2.40 $3.24 / $2.39 $3.16/ $2.23 $3.25/ $2.41 $3.42/ $2.55 $1.9m $2.6m $1.8m $4.1m $2.7m $0.5m 0 $2.7m Discount % 25.2% 26.2% 29.4% 25.9% 25.5% 21% 22.8% 26.1% 23.2% 26.8% 23.6% April 2016 $3.53/ $2.79 May 2016 $3.62/ $2.80 June 2016 $3.82/ $2.82 July 2016 $3.88/ $2.98 August 2016 $4.08/ $2.99 Sep 2016 $4.08/ $ VOF NAV USDm, inclusive of share buybacks 2. Discount based on Bloomberg closing price of last trading day of NAV month reported 3. Source: Bloomberg 30 Sep

25 Summary Positive outlook for Vietnam and VOF. Economy An economy that is outperforming its peers Free trade agreements that open up over 75% of the world s GDP to trade with Vietnam Domestic consumption growth that will favour domestic companies VOF A unique multi-asset strategy that take advantage of the inefficiencies in Vietnam s investment environment Proven track record in public and private markets Real estate exits continue in 2016 and 2017 Stable political regime that continues to support investment and is committed to lifting Foreign Ownership Limits Improved corporate governance Improved liquidity following move to the Main Market. All-share trackers have been buying in June Current discount to NAV is an opportunity for value 25

26 Why Vietnam

27 Why Vietnam Vietnam s growth is driven by rising domestic consumption and rapid infrastructure development. Demographics 94 million people with an average age under 30 High GDP growth One of the best performing emerging markets with 6.7% GDP growth (2015), 2016 expected to remain strong Rising foreign investment FDI inflows continue to support job creation, domestic consumption, industrialisation and enhance exports International trade Several free-trade agreements will bolster economic growth Privatisations and market development Capital markets will continue to deepen and broaden through IPOs and large scale privatisations of SOE s 27

28 Click to to edit Successful Master title revitalisation style of the economy Vietnam s 2016 GDP growth is projected to continue at 6.3%, making it among the highest performers in the world; meanwhile inflation remains manageable GDP is growing at impressive pace GDP growth and inflation Vietnam s GDP is outpacing most Asian frontier and emerging markets 1 GDP forecast, % India 7.5% 18.1% Bangladesh 6.6% China 6.5% Vietnam 6.3% 12.6% 11.8% Philippines Sri Lanka 5.0% 6.0% 8.4% 6.6% 6.5% 6.8% 6.0% 6.7% 6.0% 6.3% Indonesia Pakistan 4.5% 4.9% 7.5% 7.0% 7.1% 5.7% 5.4% 6.4% 6.2% 5.2% 5.4% 1.8% 0.6% 4.0% Malaysia Thailand Korea 2.7% 3.0% 4.4% F Taiwan 1.5% Real GDP Growth Inflation 1 IMF World Economic Outlook, April 2016, emerging and frontier market classifications based on MSCI classifications Source: IMF, ADB, General Statistics Office, VinaCapital Research & Analysis 28

29 Click to to A young, edit Master educated title style and inexpensive workforce The affluent middle-class will double to 21m people by Labour costs are among the lowest in the region. Average monthly wage by country In USD, 2014 $453 $403 $369 Vietnam labour costs half that of China resulting in manufacturing jobs moving to Vietnam $253 $249 Vietnam s young, productive population has been a catalyst in attracting foreign direct investments and driving growth Net foreign inflows (USDbn) 8 6 Strong FDI inflows supported by remittances from overseas diaspora and a positive trade balance accounts for a healthy FX reserve $ Malaysia China Thailand Indonesia Philippines Vietnam Source: World Bank, General Statistics Office, Ministry of Agricultural & Rural Development, VinaCapital Research & Analysis Kenya Philippines Vietnam Nigeria Sri Lanka Bangladesh Source: General Statistics Office, Ministry of Planning & Investment, VinaCapital Research & Analysis 29

30 High-value export economy Steady export growth Exports value (USD billion) Well balanced export markets Exports by market, % 5% 9% 11% 21% 21% Europe USA China Japan Korea Others F Diverse export base with an increasing shift to high-tech products Exports by product category (USD billion), 2015 Manageable trade deficit Trade balance (USD billion) Crude oil Vehicles Wood & Wooden Products Machine & Equipment Footwears Commodities Computers & Electronics Textiles & Garments Cellphones & Accessories Others F Trade Balance Exports Growth Imports Growth 50% 40% 30% 20% 10% 0% -10% -20% Source: General Statistics Office, Vietnam Customs, Ministry of Planning & Investment, VinaCapital Research & Analysis 30

31 E F Click to to edit Master Overall, title style improving macroeconomics FX reserves strengthening off positive trade flows USD billion Inflation remains stable thanks to low commodity prices YoY CPI MoM CPI (2) (1) Gross Reserves (LHS) Months of Imports (RHS) YoY CPI MoM CPI VND remains one of the most stable currencies against the USD compared to regional peers Non-performing loans are declining, but structural issues remain Percentage of total outstanding loans 160% 6.0% 150% 140% 130% 120% 110% 100% 90% 80% % 4.0% 3.0% 2.0% 1.0% 0.0% Indonesian Rupiah Malaysian Ringgit Philippines Peso Thai Baht Vietnam Dong Source: General Statistics Office, State Bank of Vietnam, Vietnam Customs, Bloomberg, VinaCapital Research & Analysis 31

32 Click to to edit Master VOF title portfolio style management team Andy Ho, MBA Chief Investment Officer and Managing Director 8 years at VinaCapital, currently MD of VOF and Chief Investment Officer of VinaCapital. Former Director of Investments at Prudential Vietnam, management positions at Dell Ventures and Ernst & Young in both the US and Vietnam. MBA from MIT Sloan School of Management, BS from the University of Colorado, USA Certified Public Accountant. Duong Vuong, CFA Deputy Managing Director, Capital Markets 2 years at VinaCapital, currently responsible for VOF s capital market and PIPE investments. 20 years of experience including the last 9 years in Vietnam. Former Research Head at PXP Vietnam Asset Management, Senior Investment Analyst at ADIA in Abu Dhabi and Banks Analyst for Merrill Lynch in London. Supported by a director and investment manager accompanied by research team. Khanh Vu, M.Com Investment Director 5 years at VinaCapital, currently investment director (PIPEs) and member of VOF s investment committee. Over 14 years of managerial experience in corporate finance, asset management, investment banking, and risk and compliance. Previously at Macquarie Bank based in New York and Sydney. Prior to that, he was with Deloitte and Arthur Andersen based in Sydney. Masters degree from University of New South Wales, Sydney. Loan Minh Dang, MBA Deputy Managing Director, Private Equity 8 years at VinaCapital, responsible for private equity investments and sourcing. Former Audit Manager for KPMG Vietnam and on the Management and Financial Accounting team at Unilever Vietnam. MBA from University of Hawaii, Vietnamese Certified Public Accountant and UK ACCA member. Supported by a director and two managers accompanied by research team. Supported by a 10 member research team, including CFA charter holders or MBA qualified 32

33 Contact details VinaCapital 17 th Floor, Sun Wah Tower 115 Nguyen Hue Street District 1 Ho Chi Minh City Vietnam Andy Ho Managing Director andy.ho@vinacapital.com Khanh Vu Investment Director khanh.vu@vinacapital.com Ho Chi Minh City Hanoi Danang Singapore 33