July 2018

— 08.08.2018

In July, the Vietnamese market remained weak for the fourth consecutive month following strong foreign net sell. VN Index lost 0.46% despite the recovery in the second half of the month thanks to support from 2Q positive results of some big caps. PYN Elite NAV went down 3.7% mainly caused by the EUR/VND exchange rate which moved up by 2.2%. Another negative impact came from the underperformance of some stocks such as PAN, CII and HBC.

Around 54% of Vietnamese listed companies have posted their 1H2018 results. The average top line growth of those companies reached 14% YoY, while the average bottom line growth was 13% YoY. PYN Core companies, however, achieved better growth with 20% YoY for revenue and 18% YoY for net profit.

MWG, our top holding, posted excellent result which was in line with our expectation. 1H2018 revenue and net profit surged 43% YoY and 44% YoY respectively while the blended gross margin expanded by 0.7%. By channel, CE contributed 56% to total revenue, followed by mobile phone with 41% and minimart with 3%. Of note, our channel check at minimart chain at early of the month has confirmed that many improvements have been made on product offering, display and customer service. With nearly 400 stores, average monthly sales per store has increased significantly from over VND 600 mn in 1Q to VND 850 mn in 2Q.

In 7M2018, macro indicators are quite encouraging despite the recent depreciation of VND against USD due to global volatility amid the US-China trade war. 7M exports was expected to remain strong with 13.5% YoY growth, while imports were slower at 10.5% YoY growth. Trade surplus reached USD 3.1 bn, significantly higher than the deficit of USD 0.1 bn in the same period last year. Real retail sales picked up at 8.4% YoY. Foreign investment continued to grow at 4.6% YoY, totaling USD 23 bn. In July, inflation slowed down by 0.09% to 4.46% YoY. The Nikkei PMI hit 54.9, slightly down compared to last month, but among the highest since its inception and topped the list of all ASEAN countries.

PYN_Elite_Review_July_2018.pdf