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Vietnam Holding Limited-Asia’s emerging champion

Since we last published on Vietnam Holding (VNH), the Vietnamese economy has gone from strength to strength, lifting the country’s equity markets, which are among the best performing globally year-to-date (YTD). VNH has captured this and more – outperforming local and global indices, and its direct competitors (see details of VNH’s performance versus its peers on pages 18 and 19). Despite this impressive performance, there is still much to go for – attractive valuations (despite the strong earnings growth potential – see page 4); domestic income that has passed US$3,000 per head (which the manager identifies as an inflexion point from which it could accelerate); a boom in exports as multinationals continue to diversify their supply chains; further benefits to come from privatisation; and, over the medium term, the potential for Vietnam’s elevation to the MSCI Emerging Market index. With its decent track record and strong environmental, social and governance (ESG) focus, we see room for VNH’s currently double-digit discount to narrow from here (see page 20).