Vietnam market had a strong start to 2024 with VN-Index +3.0% in Jan. PYN Elite +6.8% MoM, driven by the stellar rallies of ACV and the banking stocks. Our 6 banks’ total earnings +31% YoY in 4Q23 and +18% YoY in FY23. Meanwhile, the rest of VN-Index (excluding banks) saw total earnings -13% YoY in FY23. In 4Q22, the $20 bn fraud case regarding unlisted bank SCB caused temporary stress to the financial market. The case was managed well by the government, and the uninvolved, unaffected listed banks are expected to have another strong year in 2024. Recently, the SBV released a bit misleading info that the system’s NPL spiked to 4.93% in 3Q23. However, the majority of NPL was from SCB’s “internal lending”, which has been handled by the government since 2022. The 15 biggest normally operating banks’ NPL has been well-maintained and peaked at only 2.34% in 3Q23, before dropping to 1.91% in 4Q23.
January Macro: Trade activities gained momentum in Jan with exports +6.7% MoM and +42% YoY while imports +0.1% MoM and +33% YoY. Manufacturing PMI climbed back to growth territory and posted at 50.3 in Jan, supported by renewed expansions in new orders and production. Disbursed FDI +9.6% YoY, while registered FDI surged by 40.2% YoY. Inflation eased to 3.4% YoY from 3.6% in Dec-23. Deposit rates continued to drop further across the board, to nearly the lowest levels in history.
PYN Elite Stock of the Month: PNJ
PNJ is Vietnam’s leading jewelry manufacturer and retailer, with a dominating market share of over 50% in the branded segment. Its wide range of gold and silver jewelry products caters to customers of all ages, genders, and income classes. Most of them are exquisitely designed and made in-house: PNJ has the strongest production capabilities with an annual capacity of 4 million items. 2023 was a difficult year for most retailers, yet PNJ managed to gain more market share and new customers: Earnings posted growth of 9% YoY in FY23 and 35% YoY in Q4. PNJ’s foreign room has been full since 2013. We were able to get blocks and build a substantial position when the stock traded at low valuations in 4Q23.
Important information regarding the text and the Fund
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.