The VN-Index retreated by 1.5% in April after a rally in March. PYN Elite -1.8% MoM and +4.5% YTD. In April, a series of new policies were issued at an unprecedented pace to support the economy: Most notable was Decree 10 which aimed at tackling several legal bottlenecks in the properties sector, from project approvals to ownership certificates. The SBV issued two important Circulars regarding corporate bonds buyback and debt moratorium and drafted another Circular lowering banks’ risk weights for real estate-related loans. Payment extensions for several taxes and a 2-percentage points VAT cut were also proposed. Meanwhile, several listed companies reported steep earnings declines or even losses in 1Q23. Our 14 core holdings largely outperformed their sector peers, reporting an average earnings growth of 33% YoY in Q1 and targeting strong profit growth for the year.
Macro: Vietnam’s macro data was a mixed picture. Manufacturing PMI slid to 46.7 in April from 47.7 in March. Declines were seen in both exports (-17% YoY) and imports (-21% YoY), yet in line with our expectations. Disbursed FDI and registered FDI reversed Q1’s decline trend with respective growth of 1.7% YoY and 80% YoY in April. Retail sales remained strong (+11.5% YoY), bolstered by retail sales of goods and service revenue. CPI -0.34% MoM in April, bringing YoY inflation down to 2.81% and providing room for the SBV’s further easing of monetary policy. Deposit rates were reduced across the board, bringing hopes for possible declines in lending rates over the coming quarters.
PYN Elite Stock of the Month: VRE
Leading mall owner VRE surprised the market with its 2023 business plans, targeting net profit growth of 68%-87% YoY. Guidance was 26-40% higher than market’s consensus. Guidance was later proved to be attainable by VRE’s Q1 growth of 171% YoY, which completed 22% of the full-year target even without properties sales recognition. The results were even more noteworthy as a lot of retail-related companies saw steep earnings declines in 1Q23. Despite such a high base in 2023, management is still aiming for further bottom-line growth of 20-30% in FY24-25, driven by higher occupancy rates, rental reversions and GFA expansion.
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The attached publication is marketing material and should not be regarded as a recommendation to subscribe or redeem units of the PYN Elite Fund. Before subscribing please familiarize yourself with the Key Information Document, the Prospectus and the Rules of 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.
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