PYN Elite up 6.8% in October

PYN Elite NAV +6.8% in October, supported by gains in NLG, VHM and TPB. The VN Index rallied past 1,400 to reach a new ATH of 1,444, making Vietnam one of the best-performing markets globally with gains of +7.6% MoM and +30.8% YTD. The sentiment was bolstered by broad reopening and accelerated vaccination rate, coupled with better-than-expected Q3 results and the newly proposed stimulus package. Despite new ATH, VN Index traded at an undemanding forward 2022 P/E of 13.6 with a strong earnings growth outlook. Daily liquidity stayed high at €1.0 bn, with most brokers reporting surging new money inflows from local investors.

Macro: Most of the economic activities have been allowed to resume operations across the country, as the government wisely changed its strategy from “zero COVID” to “live safely with COVID”. The recovery is accelerating, with industrial production +6.9% MoM and retail sales +18.1% MoM. PMI surged to 52.1 as new orders rose and business confidence improved. Vietnam has received 109 million vaccine doses to date, and has been able to vaccinate 58.4% of its population. In October, the government proposed the largest-ever $ 35 bn stimulus package (10% of GDP) which, if approved, is expected to boost Vietnam’s GDP growth by 1% pa in the 2021-2025 period.

Stock of the Month: Our top holding VHM surprised the market as it reported +88% YoY growth in Q3 earnings thanks to sustained bulk sales and on-schedule delivery, despite the lockdown. In October, the real estate sector (ex VHM) enjoyed an 18% MoM rally on the proposed stimulus package, while VHM (+9.2% MoM) is a little behind. However, this temporary underperformance leaves enormous upside for the stock: Despite its large size, all of VHM’s valuations are now more attractive than the rest, while its unrivaled landbank of 16,200 ha can provide sustainable earnings growth of 15-20% pa for at least the next 3-5 years, per our estimates.

Important information regarding the text and the fund

The material presented in this text is based on PYN Fund Management’s view of markets and investment opportunities. PYN Elite Fund (non-UCITS) invests its assets in a highly allocated manner in frontier markets and in a small number of companies. This investment approach involves a larger risk of volatility compared to ordinary broadly diversified equity investments. The value of an investment may decline substantially in unfavorable market conditions or due to an individual unsuccessful investment. It is entirely possible that the estimates of economic development or a company’s business performance presented in this presentation will not be realized as presented and they involve material uncertainties.


7th May 2024

We have become aware in recent weeks of an ongoing fraud in Vietnam. This fraud involves the illegal use of the names ‘PYN’ or ‘PYN Elite,’ or variations thereof, in attempts to scam money from individuals through false or fake companies, mobile apps, websites, or social media.