VinaCapital Vietnam Opportunity Fund : VOF FY 2020 Results Analyst Presentation

VinaCapital Vietnam Opportunity Fund

Results for the Financial Year 2020 Analyst Presentation

Andy Ho

Chief Investment Officer

Managing Director

27 October 2020

VinaCapital's Mission

To enable our investors to prosper by capitalising on

Vietnam's rich opportunities.

About VinaCapital

• Founded in 2003, today is one of Vietnam's largest independent asset managers.
• USD3.2 billion under management, across alternative and traditional assets.
• Team of 70+ investment professionals, with 70+ support and middle office staff.
• Single-countryfocus, invested in over 200 business in Vietnam since inception.
• VinaCapital Vietnam Opportunity Fund (VOF), USD925 million London Stock Exchange Main Market, FTSE 250 listed investment company.

2|

Classified: Public

Agenda

1.	Vietnam and COVID-19 update	Andy Ho
		Chief Investment Officer
2.	Results summary	Khanh Vu
		Deputy Managing Director
3.	Macroeconomic update	Michael Kokalari
		Chief Economist
4.	Market update	Ismael Pili
		Head of Research
5.	Portfolio and strategy	Andy Ho
		Chief Investment Officer

6. Questions

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Classified: Public

01 RESULTS

Khanh Vu

Deputy Managing Director

4|

Classified: Public

Financial Year 2020 Results Highlights

$876 MILLION	-1.5%		5.5CENTS	$33 MILLION
NAV PER SHARE
	DIVIDEND DECLARED3,	SHARE BUYBACK4
$4.97 PER SHARE1	TOTAL RETURN
	ANNUAL YIELD 2.7%4	DISCOUNT 19.5%
	(VN INDEX -11.3%)	2

	1.	Total NAV and NAV per share, USD terms
	2.	Source: Bloomberg. VN Index total returns, NAV per share total return, USD terms.
	3.	Dividend declared 26 October 2020, ex-dividend trade date 5 November 2020, payment date 25 November 2020.
5|	4.	Annual dividend paid 11 US cents, of which 5.5 US cents declared on 26 October 2020. Annual dividend yield represents 2.7% on share price or 2.2% on NAV per share as at 30 June 2020.
	5.	Total amount spent on share buybacks for FY2020, to acquire 8.7 million shares, adding 5 US cents to NAV per share.
		Classified: Public

NAV has staged a strong recovery post-year end

VOF		30 June 20191		30 June 2020	30 September 20202
	USD	GBP	USD	GBP	USD	GBP
NAV	955.3	750.6	876.1	708.0	933.3	722.9
NAV per share	5.17	4.06	4.97	4.02	5.41	4.19
Share price	4.34	3.41	4.07	3.29	4.16	3.22
Discount	16.0%			19.5%		23.1%

VOF NAV by Asset Class (%)

30 Jun 2019

Operating	Cash &
assets	Others
1.4%	2.9%

Bonds

3.0%

Private

equity USD955.3m

13.0%

Unlisted	Listed
16.4%	63.3%

VOF NAV by Asset Class (%)

30 Jun 2020

Operating	Cash &
Others
assets	4.9%
1.4%
Bonds
3.3%

Private	USD876.1m
equity
21.9%	Listed
	55.5%
Unlisted
13.0%

VOF NAV by Asset Class (%)

30 Sep 2020

Operating	Cash and
others
Bondsassets (1.3%)
(3.7%)
(3.1%)
Private
equity
(18.7%)
USD933.3m
Unlisted	Listed
equity
equity
(58.6%)
(14.5%)

1. The NAV for 30 June 2019 includes adjustments to the share prices of some investments in order to adjust for pricing anomalies identified by the Board. Please refer to the

6|	Glossary section of the 30 June 2019 annual report for a complete explanation.

2. NAV as at 30 September 2020, unaudited.

Classified: Public

VOF delivers long term outperformance

USD	5-year performance (USD)
7.00		0.07
6.00	VOF's 5 yr annualised TR$ = 10.5%	0.06
5.00		0.05
4.00		0.04
	VN Index's 5 yr annualised TR$ = 8.0%
3.00		0.03
2.00		0.02
1.00		0.01

Jun-15Dec-15Jun-16Dec-16Jun-17Dec-17	Jun-18Dec-18Jun-19Dec-19Jun-20
		NAV/share (TR$) (LHS)		VN Index (TR$) (RHS)

7|	1. Source: Bloomberg, VinaCapital, USD terms, total return basis (%), annualised, 5-year period to 30 June 2020.

Classified: Public

Less volatile risk-adjusted performance over the long term

			VOF Share Price	VOF NAV per Share
	For period ending 30 June1	Annualised Return2	Annualised Return2	VN Index2
	Calendar year to 30 June 2020	(7.1)%	(0.2)%	(13.8)%
	1-Year		(3.2)%	(1.5)%	(11.3)%
	3-Year		5.2 %	4.2 %	3.4 %
	4-Year		12.3 %	9.2 %	8.3 %
	5-Year		12.2 %	10.5 %	8.0 %
	10-year		12.2 %	8.3 %	6.3 %
	Risk-Adjusted Return (Volatility)	VOF Share Price	VOF NAV	VN Index
	For period ending 30 June1	Volatility3	Volatility3	Volatility3
	Calendar year to 30 June 2020	2.5 %	1.5 %	1.8 %
	1-Year		5.0 %	2.1 %	3.2 %
	3-Year		3.5 %	2.2 %	2.7 %
	4-Year		5.3 %	4.6 %	6.6 %
	5-Year		5.6 %	4.3 %	6.4 %
	10-year	5.2 %	3.6 %	6.2 %
	Source: Bloomberg, VinaCapital. Annualised returns, USD terms.
8|	1.	Period end is for the financial years ending 30 June.
2.	USD terms, total return basis.
	3.	Volatility is calculated as the standard deviation of monthly returns over the period, based on share price, NAV/share (dividend adjusted) against the VN Index's volatility as a reference.

Classified: Public

02 ECONOMY

Michael Kokalari

Chief Economist

9|

Classified: Public

What investors need to know about COVID & Vietnam

Short-Term: Resilience & Stability

• Positive GDP growth in 2020
• Stable macro economy (FX rate, interest rates, inflation)

Long-Term: Vietnam's Growth Story Improved in 2020

• COVID accellerates the re-location of manufacturing from China
• COVID demonstrates Vietnam's stable operating environment

Vietnam's social & political stability helped it fight COVID

and supports short-term & long-term growth

10|

Classified: Public

Vietnam's resilient GDP growth

Consensus GDP growth forecasts for 2020

4%

2%

0%

-2%

-4%

-6%

-8%

11|

Vietnam's GDP grew 2% in 9M20 supported by:

Rebound in	Resilient
Consumption	Manufacturing
(66%/GDP)	(~20%/GDP)

Classified: Public

Confident consumers drive domestic demand

"V-Shaped" Recovery in Domestic Demand

10%

4.9%

5%

0%

Jan & Feb

Mar

Apr

May

Jun

July

Aug

Sep

-5%

-10%

-15%

-20%

-25%

-23.0%

Nominal Retail Sales (yoy)

• Vietnam Consumer Confidence, #2 in the World after India (Nielsen)
• Confidence in the Government's handling of COVID, #1 in the World, (IPSOS)

12|

Classified: Public

Vietnam makes Stay-At-Home and Work-At-Home products

		US PC & IT Sales					US AV Equipment Sales
80						350
						300
60						250
40						200
						150
20						100
00	04	08	12	16	20	00	04	08	12	16	20

		US Furniture Sales					US Garment Sales
						350
250						300
200						250
150						200
100						150
					00	04	08	12	16	20
00	04	08	12	16	20

• Vietnam's Exports to the US: up 23% in 9M20, to ~$55bn
• Vietnam's Electronics Exports: up 26% in 9M20, to ~$32bn

13|

Classified: Public

Vietnam Long-Term Growth Story Improvedin 2020 !

14|

Classified: Public

The next wave of FDI has started

Over 20% of China's Manufacturing base to relocate in 5-10 years

80% of US Consumers don't want to buy "Made in China" products

Vietnam is the #1 Preferred Re-Location Choice:

1) High quality, low wage workforce

2) Geographic proximity to Asia's supply chains

3) Vietnam's handling of COVID

Sources: UBS, Standard Chartered, AmCham China, Bloomberg, JETRO, Economist Magazine, McKinsey

15|

Classified: Public

Vietnam's next FDI wave will significantly boost GDP growth

FDI companies will help build Vietnam's local suppliers by:

• Second executives to Vietnamese firms
• Transfer knowledge & Best practices
• Long-termprocurement contracts

In the past, FDI companies built up local suppliers in:

Singapore, Thailand, Mexico, etc.

In the 1980's, 80-90% of local companies in Singapore could

not meet FDI companies' procurement quality standards !

So FDI firms helped Singaporean companies improve !

16|

Classified: Public

Apple starts building a local supply chain in Vietnam

Apple will manufacture its $350, Airpods

Studio Earphone product in Vietnam

For the first time, Apple will manufacture in

Vietnam beforeperfecting production in China

Apple is embarking on a "Multi-Year

Process" to "Create a New Cluster of

Component Providers" in Vietnam (WSJ)

17|

Classified: Public

03MARKET

Ismael Pili

Head of Research

18|

Classified: Public

VN Index performance during COVID-19

1,000	FIRST WAVE	SECOND
950	24 Jan to 24 Apr	OUTBREAK
		21 Jul to 31 Aug
900
850
800
750
700
650
600

19|	Source: Bloomberg, VinaCapital. 16 October 2020.

Classified: Public

VN Index vs MSCI ASEAN

									MSCI Global, +3.0
									VNI-INDEX,-1.8
								MSCI ASEAN, -22.5
Dec-19	Jan-20	Feb-20	Mar-20	Apr-20	May-20	Jun-20	Jul-20	Aug-20	Sep-20

20|	Source: Bloomberg, VinaCapital. 16 October 2020.

Classified: Public

Sector performance YTD

Materials			44.8%, PHR
	39.6
	93.1%, DCM
Consumer Staples	12.1		102.3%, HSG
Financials Ex Real Estate	8.8

51.4%, HPG

Information Technology	6.4	44.4%, APH
VNIndex Index	-1.8
Consumer Discretionary	-7.5
			-9.1%, PPC
Real Estate	-9.3
				-25.9%, GEG
Health Care	-9.6						-44.1%, PGD
Industrials	-9.8						-10.0%, POW
Utilities	-10.6						-15.6%, GAS
Energy -18.2

21|	Source: Bloomberg, VinaCapital. 16 October 2020.

Classified: Public

1H20 Sector earnings y/y growth

1H20 Sector contribution to net profit

Materials						+34.8
Information Technology						+18.7
Financials						+12.9
Health Care						+12.6
Consumer Staples			-12.8
Real Estate			-15.7
Consumer Discretionary			-20.7
Other			-26.3
Utilities			-31.9
Industrials		-106.5
Energy		-112.6
Communication Services	-123.4
(150)	(100)	(50)	-	50

Others

7%

Utilities

8%

Materials

10%Financials

46%

Consumer

Staples

12%

Real Estate

17%

22|	Source: Fiinpro, data is based on the stocks in HOSE

Classified: Public

Net profit resilience (y/y growth)

3Q20E		-0.5%
2Q20		-8.5%
1Q20		-8.1%
4Q19				23.7%
3Q19			24.7%
2Q19			23.8%
1Q19			3.5%
Based on the companies under VinaCapital Research's coverage.
23|	Source: FiinPro, data is based on the stocks in HOSE

Consensus net profit growth estimates

		Vietnam		Indonesia			Malaysia
		Philippines		Singapore			Thailand
						39.6	40.8
						35.7
						32.0
						28.4
12.9
10.1	12.6			9.1
7.6			7.2

-4.6

-9.3-11.9

-16.8

-38.6-35.2 -41.6

2019

2020F

2021F

Classified: Public

Valuations

ASEAN market P/E (x)

VN Index		Indonesia		Malaysia		Philippines		Singapore		Thailand

21.1 22.3

20.1		19.5
18.6
18.5	17.8
17.1	16.9	16.8		16.3	15.9
15.1
			14.4	15.2	14.8
					13.7
			13.1		11.8
	12.2			12.7		12.6
					11.0			10.7

2019

2020F

2021F

2022F

24|	Source: Bloomberg, IMF

Classified: Public

Ample market liquidity

ADT YTD 2020 increased by 30.6% compared to ADT OF 2019

	Vietnam		Indonesia		Malaysia
	Philippines		Singapore		Thailand

USD MN

232.1222.3

180.0170.2

103.5

92.6 83.8

USD MN

1,446.1

472.4 542.7

186.8

1,759.5

721.4

430.7

222.3

265.7

170.2

92.9

89.7

2014

2015

2016

2017

2018

2019

2020

25|	Source: FiinPro

20192020

Classified: Public

Foreign flow

Net foreign flow YTD 2020

Accumulative net foreign flow into Vietnam

Vietnam	Indonesia	Malaysia	Philippines	Thailand
	W/o Block
	trade
USD MN			Net foreign flow

1500

1000

500

0

-500

-1000

-1500

W/O block trade transaction		Block Trade Transaction

Foreign Flow

Except Vietnam, other market outflow is total net amount including block trade.

26|	Source: Bloomberg, FiinPro a of 16 October 2020.

Classified: Public

Solid corporate earnings & GDP growth

Consensus earnings growth estimates

		Vietnam		Indonesia			Malaysia
		Philippines		Singapore			Thailand
					35.7	39.6	40.8
						32.0
					28.4

12.129 .6

10.19.1

7.6 7.2

-4.6

-9.3-11.9

-16.8

-38.6-35.2

-41.6

2019

2020F

2021F

GDP growth (IMF)

		Vietnam			Indonesia			Malaysia
		Philippines			Singapore			Thailand
7.0					7.87.4
				6.76.1
5.9
5.04.3				5.0
						4.0
2.4	1.6
0.7

-1.5

-6.0-6.0 -7.1

-8.3

2019

2020F

2021F

27|	Source: Bloomberg, IMF

Classified: Public

Risks: Exogenous factors

• COVID-19
• ECONOMIC RECOVERY
• GEOPOLITICAL NOISE
• CORPORATE EARNINGS

28|	Source: Bloomberg, IMF

Classified: Public

Six thematic baskets

	DOMESTIC	INFRASTRUCTURE	'DEFENSIBLES'		LOWER RATE		FDI		CONSOLIDATION
	RECOVERY		BENEFICIARIES
•	Banks - generally	•	Airport	• Companies with	Positive impact:	•	Industrial Parks -	•	Banks - too many
	less asset quality			industry leading	•	Brokers - Higher		those with ample		in the country.
	pressure on its	•	Construction	franchises and		flow into the stock		capacity & ideal
	borrowers.		Materials	businesses		market and		location	•	Consumers -
				posting good		cheaper margin				foreign interest
•	Property -	•	Property	returns &/or		lending rates.	•	Ports, Logistics,		potentially.
	improved prospect			growth.				Transportation
	for project	•	Utilities		•	Property - lower			•	Property - on a
	launches.					funding cost for	•	Consumer		project level, land
	Hospitality	Less direct or indirect			developers.		companies &		banking.
	properties.	plays could include:					Residential RE
					•	Companies in net		developers - from
•	Consumer	•	Industrial Parks			debt position.		higher personal
	discretionary -							incomes
	increased foot	•	State owned		Negative impact:
	traffic.		commercial banks		•	Banks - lower	•	Indirect
						rates are not		Beneficiaries:
•	Aviation related -					conducive to NIM.		Materials, Banks,
	more flights,							IPP, Infra
	passengers, cargo.				•	Companies in net		developers
						cash position.

• Brokers - improved company

29| prospects, deals.

Source: VinaCapital

Classified: Public

04 PORTFOLIO

Andy Ho

Chief Investment Officer

Managing Director

30|

Classified: Public

VOF's investment strategy
01Growth Capital	02Minority Protections

• Capital to support expansion and growth
• Sectors benefitting from the growing domestic economy
• Long term investment horizon, excess returns to market

• Volatility and weak corporate governance is pervasive
• Downside protections coupled with clear exit mechanisms
• Due diligence rights (on listed equities too), performance commitments, minority protections

03Active Investing

• Actively engage, provide access to expertise
• Participate at the board and/or managerial level to enhance growth and shareholder value.

31|

04Sell Discipline

• Large stakes in companies to command an exit premium
• International buyers: strategic or financial investors, bankers
• Exit when below minimum targeted return or dilute the performance of the underlying portfolio

Classified: Public

VOF's Private Equity approach to investing

Due diligence	Performance
rights	commitment

Management		Downside
involvement	Target IRR	protection
	+20%

Corporate	Milestone
governance /
disbursement
ESG
	Exit plan

32|

Classified: Public

What we look for in any company when investing

01	02	03
Scale	Brand	Distribution (PNJ)

Focusing on sectors and industries that present	Focus on domestic consumption-related businesses	In the fragmented and unorganized Vietnam
considerable headroom for growth, be it in	that have brands that consumers recognize.	market, a distribution network and customer reach
manufacturing scale or market share growth.	Branded market leaders have the best chance for	is what separates the winners from the losers.
	exit to an offshore strategic investor in future.

04	05
Management and	Competitive Advantage

alignment

Capability and integrity of sponsors, and	The moat. Seek businesses that have sustainable
competitive advantages that can preserve value
alignment of interest are key. Trusted
over our investment horizon:
management is one that can set a reasonable
(i) High barriers to entry;
business plan and deliver against that plan and be
(ii)	Lower cost structures;
trusted to not impair the assets of the business.
(iii)	Exclusivity with suppliers/vendors.

06

Sustainability

As a responsible investor, we invest in businesses

that are safe for the environment and supportive of their people and local communities.

33|

Classified: Public

Environmental, Social and Governance factors into our investment process

13% of Asia-Pacific investors incorporate ESG factors into their decisions or take concrete actions to improve their portfolio's ESG performance

VinaCapital is a signatory to the UN's Principles for Responsible Investing

Private investments follow the ESG evaluation and assessment framework set by the IFC / World Bank

We focus on 2 areas of sustainability:

1. Water management
2. Clean energy

34|	Source: Bain Asia-Pacific Private Equity Survey, 2019 (n=114)

Classified: Public

Privately negotiated investments - investing in brand, scale, and distribution

BrandScale

Distribution

USD38.4 million

Vietjet Air

2016 - 2019 Fully Realized

IRR: 87.6%, MOIC: 2.1x

USD10.1 million

Hoan My - Healthcare

2009 - 2013 Fully Realized

IRR: 47.6%, MOIC: 2.8x

USD 85.7 million

Hoa Phat Group

2007 - Present

Partially Realized

IRR: 16.8%, MOIC: 3.0x

USD22.2 million

Novaland

2015 - 2017 Fully Realized

IRR: 29.8%, MOIC: 1.7x

USD62.9 million

Vinamilk

2003 - Present

Partially Realized

IRR: 51.2%, MOIC: 6.1x

USD25.4 million

Phu Nhuan Jewelry

2007 - Present

Partially Realized

IRR: 15.3%, MOIC: 3.9x

35|	1 Track record is from the VinaCapital Vietnam Opportunity Fund ("VOF"). Valuation as of 30 June 2020, unaudited.
IRR: Internal Rate of Return, MOIC: Multiple on Invested Capital, VND terms.

Classified: Public

Sector Allocation - a risk-return based approach

		NAV breakdown by Sector (%)				Current Private Equity
							Current Public Equity
20.5%							(Listed and OTC)
19%		19%					Target sector allocation
15.2%
15%
11%		11.4%		11%
	10%
6.3%6%				7.6%
4.4%	6.0%	5.2%
			2%	2.8%	3%	2.9%3%
							0.3%0%

36|	As at 30 September 2020, unaudited.

Classified: Public

Private Equity: significant transactions during FY2020

PE: Ngoc Nghia USD21.4m	PE: Thu Cuc International
General Hospital USD26.2m

PE: Petrolimex Aviation USD8.5m

PE: IN Holdings USD25.4m

37|

Classified: Public

Public Equity: A concentrated portfolio of high-quality companies

New names initiated…	…while others sold

38|	As at 30 September 2020

Classified: Public

Our focus and priorities

Asset classes

Structured Investments

Minimum IRR, protections

Why? Clear exits

Private Equity

Aggressively pursue

Uncertain performance

Public Equity

Sufficient capacity

Meaningful stakes

Equitisations

Few interesting opportunities

39|

Sectors

Real Estate

Financials / Banks

Healthcare

Materials

Information Technology and

Education

Energy

Consumer Staples

Consumer Discretionary

Classified: Public

Risks, opportunities and resiliency

Risks

• Currency volatility
• Weak corporate governance
• Dependency on global economies

Opportunities

• Investing into future leaders
• Access to a deep pipeline of deals
• Strong domestic economy and consumer

Resiliency

• Local economy and businesses
• VOF's portfolio

40|

Classified: Public

VinaCapital Vietnam Opportunity Fund (VOF) - 23 October 2020

Fund type:	Closed-end listed fund (LSE: VOF)
Listing:	London Stock Exchange Premium Market Listing, FTSE 250
Focus:	Alternative assets, Vietnam, multi-sector,high-growth focus
NAV1:	USD956 million (USD5.58/share)	|	GBP731 million (GPB4.27/share)
Market Cap1:	USD739 million (USD4.31/share)	|	GBP565 million (GBP3.30/share)
Discount1:	22.6%
Investment manager:	Andy Ho, since April 2007, over 20 years investment experience
Independent board:	5 independent members, diverse non-executive Board of Directors
Reduced Fees2:	Management fee, 1.5% with a step-down tier structure
	Performance fee, 12.5% with a fee cap, compounding 8% hurdle

Manager uses one-quarter of performance fee to buy VOF shares

TER31.7%

41|	1.	Data as at 23 October 2020.
2.	New fee structure applied from 1 July 2019.
	3.	Prepared in accordance with the Association of Investment Companies (AIC) recommended methodology, as at 30 June 2020.

Classified: Public

DISCLAIMER

The information contained herein has been prepared by VinaCapital Group Limited (the "Company") and is subject to updating, completion, revision, further verification and amendment without notice.

The information contained herein has not been approved by any listing authority or any investment regulator. The information does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall they or any part of them form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever.

No undertaking, representation, warranty or other assurance, expressed or implied, is made or given by or on behalf of the Company or any of its directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained herein and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise for any other communication written or otherwise.

The information herein may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose. By accepting receipt of this document, you agree to be bound by the limitations and restrictions set out above.

Neither these pages nor any copy of them may be taken or transmitted into or distributed in any jurisdiction where the distribution of such material would be prohibited under the jurisdiction's applicable securities laws. Any failure to comply with this restriction may constitute a violation of national securities laws.

Past performance is not a guarantee of future returns.

ANDY HO

Managing Director and Chief

Investment Officer

[e-mail]

KHANH VU

Deputy Managing Director

Investments

[e-mail]

VinaCapital 17th Floor, Sun Wah Tower 115 Nguyen Hue, District 1, Ho Chi Minh City, Vietnam Tel: [phone] Fax: [phone] Email: [e-mail]

Website: www.vinacapital.com