VEIL Vietnam Enterprise Investments Limited

15 April 2024

Vietnam Enterprise Investments Limited

("VEIL" or "the Company")

Monthly Update

VEIL is a London-listed investment company investing primarily in listed equities in Vietnam and a FTSE 250 constituent. The Company's unaudited performance for March 2024 to 28 March*, in which NAV per share rose 3.0% (in USD terms), is set out in this notice.

Tuan Le, Lead Portfolio Manager of VEIL commented:

"VEIL's NAV increased 3.0% in USD terms in March, driven mainly by a resurgence in the retail (+10.5%) and mid-cap property (+10.7%) sectors. This led to a 0.5% gain over the Company's reference index, the Vietnam Index ("VNI"), which rose despite facing several obstacles in March.

"On 18 March, the VNI declined 1.6%, around rumours that Vietnam's President would resign following Party regulatory violations, which was confirmed on 20 March. Prior to the official confirmation, major foreign news agencies had speculated upon the resignation. Thus, when the news was officially confirmed, it did not come as a surprise. Historically, domestic investors typically do not overreact to personnel changes; if they do, it is only in the short term. The market brushed this event aside, rising 3.5% from 19 to 28 March.

"The event can be seen in the context of the ongoing efforts and determination of the General Secretary of Vietnam to maintain the Party's integrity above all else. While leadership transitions pose challenges, Vietnam's business environment and economic activities have historically proven resilient.

"Vietnam recorded 5.7% GDP growth in Q1 2024, the highest first-quarter expansion in five years. The industrial sector was a large contributor to this growth, up 6.2%, with exports rising 17.0% year-on-year in the first quarter and imports increasing by 13.9%. The services sector rose by 6.1% year-on-year, revealing dispersion in the economic recovery, with domestic-oriented sectors lagging export industries. Meanwhile, as Chinese tourists returned, tourism-related services maintained an upward trajectory as quarterly inbound visitors reached 4.6 million. This marks a 72% year-on-year increase and is 3.2% above Q1 2019 levels.

"The State Securities Commission of Vietnam published a draft circular proposing the removal of prefunding requirements. It also mandated English language disclosures for large public companies by January 2025, a significant step towards satisfying transparency criteria for emerging market index inclusion. This initiative has garnered preliminary approval from both the World Bank and FTSE Russell for its potential to ease market frictions and attract international capital.

"Dat Xanh Group ("DXG") (+7.8% in March; 2.1% of NAV), a major residential property developer, benefitted from the midcap property recovery in March, aligning with our expectations for the sector's rebound. This was driven by the anticipated early implementation of the amended Land Law and government initiatives to streamline land clearance processes. Our analysis suggests a turning point for the company, with flagship projects Gem Skyworld and Gem Riverside, collectively comprising c.4,500 units in HCMC, acting as near-term share price catalysts. We forecast 2024 pre-sales of approximately US$150mn, a stark contrast to almost zero in 2023. Residential projects are slated to deliver another c.6,000 apartments in the next three years. Together, these projects underpin DXG's vision for sustained growth, balancing immediate profitability with long-term value creation."

 VEIL Performance

*All quoted data as of 28 March due to a public holiday on 29 March.

·    As of 28 March, VEIL's NAV increased by 3.0% over the previous month against a gain of 2.5% for its reference index, the Vietnam Index ("VNI"), both in total return USD terms. The Company's NAV per share was US$9.60 and its total NAV was US$1.9bn.

·    VEIL's share price increased 0.5% in March and 5.4% year-to-date, both in USD terms.

·    VEIL's three-month NAV per share performance in USD terms is +10.7%, +15.9% over one year and +2.9% over three years. Over the same time periods, the performance of the VNI was +12.0%, +16.7% and +5.4%, respectively.

·    In GBP terms, VEIL's NAV increased 3.1% over the previous month and 11.7% year-to-date. The Company's NAV per share was £7.60 as of 28 March and its total NAV was £1.5bn. The GBP share price increased by 0.7% for the month and 6.3% year-to-date.

·    The share price discount to NAV as of 28 March increased to 22.1%, compared with 20.2% at the end of February. On 31 December 2023 the discount was 18.1%.

·    The Company purchased 1,596,935 shares in March, compared with 740,269 shares purchased in February. Year-to-date to 28 March, 2,723,307 (1.4% of shares outstanding as of 1 January 2024) were purchased.

The accretion to NAV per share from the share purchases was 0.34% year-to-date to 28 March.

·    The VND depreciated 0.6% against the USD in March and 2.1% year-to-date. The VND depreciated 0.1% against the GBP in March and 1.3% year-to-date.

Top Ten Holdings (59.6% of NAV)

Source: Bloomberg, Dragon Capital

NB: All returns are given in USD terms to 28 March 2024

For further information, please contact:

Vietnam Enterprise Investments Limited

Rachel Hill

+44 122 561 8150

+44 797 121 4852

rachelhill@dragoncapital.com         

Jefferies International Limited

Stuart Klein                                                                                                                        

+44 207 029 8703

stuart.klein@jefferies.com 

Buchanan

Charles Ryland / Henry Wilson / George Beale

+44 20 7466 5111

veil@buchanan.uk.com

h2Radnor

Iain Daly

+44 20 3897 1830

idaly@h2radnor.com

LEI: 213800SYT3T4AGEVW864