VN market (+0.14%) was peaceful compared with the world. PYN Elite dipped slightly by -1.5%. Local investors take a cautious stance toward geopolitical events and the current margin lending balance is estimated to be 20% off from its recent peak. The government started an unprecedented crackdown on stock market manipulation with a high-profile arrest. This certainly protects the public’s interest. US President Biden praised Vinfast’s investment in the US and caused a social media sensation.
March macro: While the Russian war and China’s new lockdown impacted certain sectors, the majority of the economy is doing well: 1Q GDP +5% YoY, Industrial production +8.5% YoY, Export +14.8% YoY, passenger car sales rebounded strongly +49% YoY while Inflation remains benign at +2.4% YoY. Credit grew by +5% YTD (+16% YoY)
Our team finally visited Vietnam after 2 years and spent nearly 3 weeks meeting with C-level executives of all portfolio companies. Despite our familiarity with Vietnam macro statistics, we were still pleasantly surprised to see how vibrant lives were in Vietnam with our own eyes: restaurants, pubs, malls and walking streets were all packed. The flights were fully occupied. Many companies cheerfully informed us that their sales and customer grew in double digits so far.
The Stock of the Month: MBB’s mobile users grew from 1 million in 2019 to 9 million in 2021, the largest increase of any bank we observed in the past 2 years, thanks to its digital initiatives and innovative marketing campaign. Under the same leadership and strategies, MBB’s non-bank subsidiaries also made significant improvements: its consumer finance company increased in size by 10X since its humble start in 2017, and rose to become the #3 player in Vietnam. Its insurance companies saw high-double-digit customer growth and a strong gain in market share. We expect MBB profit to increase by 30% YoY. MBB’s valuation is still attractive vs peers.
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.
PYN Elite Monthly Review.pdf