At the moment Vietnamese banks account for a total of 32,5 percent of PYN Elite’s portfolio. Our top picks are HDB, CTG, and TPB.
We increased our weighting in banks already before the corona crisis due to banks’ importance for the Vietnamese stock market. Many banks had improved their earnings in 2019 but they still lagged behind the VN index.
In Europe, there’s been a lot of talk about the financial sector’s future growth and quality of banks’ balance sheets. Things are different in Vietnam where the banks are the true growth stories. They are not to be picked for being good dividend stocks because the banks are investing their profits for the future growth.
In recent years our key banking stocks have recorded annual growth in earnings and revenue up to 30-40 percent. This year will also be a decent one, despite the Covid-19. Many of Our banks are expecting earnings growth as much as 20 percent in 2020 and this will lead to P/E ratios around 5 or 6.