Vietnam finished 2021 as one of the top-performing markets globally with VN-Index +1.3% in Dec and +35.7% YTD. PYN Elite outperformed, with NAV +4.8% MoM and +42.7% YTD. This month, we have fully locked in 438% gain from our CEO position, following the stock’s phenomenal 2-month rally since the market came to realize the values of its landbank. Both the VN-Index and daily liquidity reached new ATHs in 2021, driven by the rise of retail investors. Newly opened accounts +296% YoY to 1.3 million in 11M’21, yet market participation rate is only 4% of the population, leaving ample room for further upside in the coming years.
Macro: After 3 months of reopening, Vietnam’s recovery is gaining speed: GDP growth +5.22% YoY in Q4 and +2.58% YoY in 2021. This year’s encouraging growth was underpinned by the outstanding performance of the industrial sector (+4.82% YoY), while the service sector was only +1.22% YoY due to a 4-month lockdown in summer. Impressive growth was also witnessed in the value of export-import (+22.6%) and registered FDI (+15.2%) in 2021, while inflation stayed low at +1.81% YoY. By the end of 2021, 90% of population aged 18+ have been fully vaccinated, allowing Vietnam to start resuming international flights since Jan’22, paving the way for an even stronger economic recovery.
Stock of the Month: NLG. Our mid-cap developer NLG +15% is MoM and 146% YTD, driven by landbank revaluation across the sector. In December, HCMC’s government successfully auctioned 4 land pieces in the new business center of Thu Thiem, with unprecedentedly high winning bids of $20k–$104k/sqm. The event has set new price levels for the Greater HCMC area, where NLG is poised to benefit: Most of its 681-ha landbank offer 1-hour drive access to HCMC’s center. Given the area’s continued lack of supply, we believe NLG will be able to sell its properties at much higher prices in future launches, allowing it to achieve earnings growth of circa. 30% p.a. for at least the next 5 years.
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