12 December 2023

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 NAV performance for November 2023 is set out in this notice.

Company Performance

·    As of 30 November, VEIL's NAV increased 8.7% over the previous month against a gain of 8.0% for its reference index, the Vietnam Index ("VNI"), both in total return USD terms. The Company's NAV per share was US$8.37 and its total NAV was US$1.7bn.

·    VEIL's share price increased 7.2% in November and has declined -4.0% year-to-date, both in USD terms.

·    VEIL's three-month NAV per share performance in USD terms is -10.7%, +9.4% over one year and +8.7% over three years. Over the same time periods, the performance of the VNI was -10.9%, +8.0% and +8.9%, respectively.

·    In GBP terms, VEIL's NAV increased 4.1% over the previous month and has increased 1.2% year-to-date. The Company's NAV per share was £6.61 as of 30 November and its total NAV was £1.3bn. The GBP share price increased by 2.7% for the month and has declined 8.8% year-to-date.

·    The share price discount to NAV as of 30 November was 19.5%, compared with 18.4% at the end of October and 10.7% as of 31 December 2022.

·    The Company repurchased 691,730 shares in November, compared with 1,207,118 shares repurchased in October. Year-to-date to 30 November, 5,484,906 (2.7% of shares outstanding as of 1 January 2023) have been repurchased. The accretion to NAV per share from the share repurchases is 0.59%.

·    The Vietnamese dong ("VND") appreciated 1.2% against the USD in November and has depreciated 2.7% year-to-date. The VND depreciated 2.4% against the GBP in November and has depreciated 7.7% year-to-date.

Dien Vu, Portfolio Manager of VEIL commented:

"The VNI recovered 8.0% in November following a 17.5% decline in September and October. In addition to global markets rallying, sentiment also improved after the State Bank of Vietnam ("SBV") ceased SBV-bill issuance on 9 November as uncertainties over currency depreciation subsided, resulting in a net injection of approximately US$7.5bn into the banking system. Some state-owned commercial bank deposit rates are now at pre-pandemic levels of 4.8%, with abundant liquidity in the system. The Manager believes this to be the reason for the 14.1% month-on-month rise in daily turnover to US$794mn across Vietnam's exchanges as investors moved out of term deposits and sought higher returns in the capital markets.

"On 27 November, Vietnam upgraded its diplomatic relations with Japan to its highest level of Comprehensive Strategic Partnership. This is a step up from the Strategic Partnership status established in 2009 and has the potential to amplify foreign direct investment ("FDI") from Japan, which has increased annually for the past decade. Accumulated Japanese FDI was US$29bn in 2012 and increased to US$80bn at the end of 2022. The manager believes this will support some of VEIL's portfolio holdings, including FPT Corporation ("FPT") and Duc Giang Chemicals ("DGC").

"FPT generated US$700mn in revenue from global outsourcing in the first three quarters of 2023, with approximately 40% of this coming from Japan. Domestically, the upgrade will help fulfil Japan's future need for a digital presence, with FPT, Vietnam's leading software outsourcing and technology company, likely to benefit most. FPT's revenue is forecast to grow by 20% in 2024, with outsourcing showing a solid growth of 25% from Japan.

"VEIL has recently increased its position in DGC as both a long-term play on the semiconductor industry and a short-term focus on the anticipated recovery in yellow phosphorus prices, which fell 36% in the first nine months of 2023. This decline was due to significant inventory digestion and production cuts at semiconductor companies. However, the demand from leaner semiconductor inventory and gradually improving consumer electronics demand is driving the price back up.

"Residential developers experienced a broad-based rally due to optimism that current legal impediments, including the Land Law revision, will see substantial progress by H1 2024. This included VEIL portfolio companies such as midcap developers Khang Dien House ("KDH") (+10.5% month-on-month), Dat Xanh Group (+21.6%), and Phat Dat Real Estate (+31.5%).

"KDH's recent Privia project launch in HCMC saw a near 90% uptake of the first phase of 1,024 units. KDH have sound legal status on their projects, which are ready to launch when the property market starts warming up. In addition to the Privia project, KDH recently started breaking ground on a six-hectare mixed-use project (200 low-rise and 600 mid-rise units) in cooperation with Singaporean developer Keppel Land.

"VEIL strategically topped up in infrastructure construction company Vinconex ("VCG"), which was up 21.0% month-on-month. VCG currently looks set to benefit from upcoming Government infrastructure projects, including the north-south expressway, the expansion of the existing HCMC airport in 2024 and the development of the new HCMC international airport, which the Government is aiming to have phase one completed by 2025."

Top Ten Holdings (58.4% of NAV)

Source: Bloomberg, Dragon Capital

NB: All returns are given in USD terms

For further information, please contact:

Vietnam Enterprise Investments Limited

Rachel Hill

Phone: +44 122 561 8150

Mobile: +44 797 121 4852

rachelhill@dragoncapital.com         

Jefferies International Limited

Stuart Klein                                                                                                                        

Phone: +44 207 029 8703

stuart.klein@jefferies.com 

Buchanan

Charles Ryland / Henry Wilson / George Beale

Phone: +44 20 7466 5111

veil@buchanan.uk.com

Radnor Capital Partners

Iain Daly

Phone: +44 20 3897 1830

id@radnorcp.com

LEI: 213800SYT3T4AGEVW864