VietNam Holding Limited ("VNH" or the "Company")

Monthly Investor Report

A report detailing the activities of the Company for the month of May 2021 has been issued by Dynam Capital Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website and a summary of the report is included below.

Zooming through the mighty month of May

Vietnam was the best performing stock market in the world in May, with the benchmark VN All Share Index up more than 32% over the first five months of 2021, in spite of a fourth outbreak of Covid-19. The Fund had an even better month, ending as the UK's top-performing Investment Trust by NAV on the London Stock Exchange. The strong rise in Vietnamese stocks selected by VNH also made it the UK's the second highest rising Investment Trust by share price increase. 

FPT, the Fund's largest holding, saw its stock price rally 60% this year alone, as a leader in Vietnam's thriving IT sector which is estimated to grow to US$52 billion in value by 2025. The company, which is also championing software and outsourcing services to Fortune 500 companies, reflects the digital transformation happening in Vietnam, where internet penetration reached 69% in 2020 and 70.3% in 2021. This is amongst the highest in Asia, and although behind China and Japan at 107% and 77% respectively, we believe double digit growth lies ahead. For FPT, fast internet means customers can stream content over their rapidly growing Pay TV business, which has around 55% penetration in Vietnam, less than China's 76% and South Korea's 99%, but cheaper access to fast internet can contribute greatly to economic growth. Considering Vietnam's software engineers on average cost one third of the level of those in India and China, the opportunity for a Vietnamese company, such as FPT, to be internationally competitive is also immense. FPT already serves many Japanese and US companies, which are trying to move their activities to the cloud and upgrade their technologies to adapt to new customer usage patterns.

Vietnam's digitalization story filters into other sectors, and banks were also a main driver of performance in May as many of them transform their brand identity, marketing strategies and product offerings to connect with a younger group of consumers seeking a more convenient way to access digital financial services. Those banks in our portfolio have seen their stock prices increase thanks in part to strategic decision making by their senior management. For example, positive news on STB's legacy debt solving progress, released in its 2021 AGM, supported its stock price performance in May. CTG's high dividend payment and robust earnings growth prospect have supported its market sentiment as well. MB bank's whopping profit growth of +107% YoY in 1Q21 and dividend plan were also behind its stock price performance. We expect more to come at VPB given its deal to sell 49% of its subsidiary FE Credit to SMBC is due to complete in 3Q21 and likely followed by a private placement to a foreign strategic partner by the end of 2021.

Other drivers in the digitalisation momentum currently taking place in Vietnam include education and government regulations. FPT, for example, trains around 40,000 software engineers a year at its campuses across the country, creating a deepening pool of talent for domestic and foreign companies alike. We envision engineering jobs within growth areas, such as Artificial Intelligence, Blockchain, and Cloud computing, to continue to be readily available. The government is also pushing hard for digital technologies as a way to scale Vietnam's development as a modernising industrial nation and is planning to promote e-payment and e-government. Soft infrastructure is as important as hard infrastructure, and both can have a multiplier effect on economic growth, in our view. Digitalisation is helping Vietnam stay on course to reach its 30-year track record of 6.5% growth. Its stock market ranks as the second most liquid in South-East Asia, recently recording more than $1bn of transactions a day, with almost 500,000 new stock market accounts opened in the last 12 months. These new investors are increasingly digitally connected, smartphone and app-enabled, and keen to embrace the new industrial revolution. The Fund is up around 90% this financial year and the forecast growth in portfolio EPS for 2021 is over 40% at less than 11x price-earnings.

For more information please contact:

Dynam Capital Limited                  

Craig Martin                                                                                       Tel: +84 28 3827 7590

info@dynamcapital.com |www.dynamcapital.com

www.vietnamholding.com

finnCap

Corporate Broker and Financial Advisor                                            Tel: +44 20 7220 0500      

William Marle