Quarterly Insights

12 February 2026

Vietnam Enterprise Investments Limited

("VEIL" or the "Company")

Quarterly Insights

VEIL is a London-listed investment company investing primarily in listed equities in Vietnam and is a FTSE 250 constituent.

Vietnam 2026, From Reform to Delivery

Tuan Le, Lead Portfolio Manager

As we begin the Year of the Horse, our base case is that it will be a year when fundamentals reassert themselves. Earnings growth is expected to remain supportive, and the market should increasingly reward outcomes. Following the conclusion of the January 2026 Party Congress, which marks the beginning of the next five-year term, the strategic direction is clear. The hard work will be turning this intent into results.

Vietnam enters 2026 with an enviable combination that is not common across emerging markets: a stable macro backdrop, contained inflation, broad-based profit recovery, and an explicit push to improve both physical infrastructure and equity market plumbing. Macro stability remains supportive, with USD/VND expected to remain broadly stable and inflation below 4%. External volatility will remain, but the centre of gravity will shift back to company outcomes and fundamentals.

For an active manager, that is the environment we wait for. It is also why we are more optimistic about 2026 than at any point in recent years, because the return potential is less dependent on macro surprises and more on what companies can prove in earnings, margins, and cash conversion.

Macro stability, earnings breadth, and market plumbing

Vietnam's growth model can be summarised as coordination rather than concentration, aligning state capacity, private enterprise, and foreign capital within a clearer framework. From an active equity perspective, three signals matter most:

· The investment cycle is becoming central to the growth model. Public investment, if implemented consistently, does two things that are equity-relevant. It lifts near-term demand through infrastructure, logistics, and industrial activity. It also raises productivity over time by lowering friction costs and improving the return on private capital. As policy moves from intent to throughput, dispersion rises, and stock selection matters more than sector calls. For VEIL, the opportunity is not in chasing headline beneficiaries, but in owning the businesses where value accrues and cash conversion is credible.

· Earnings are the anchor. The VN-Index 4Q25 results were among the strongest on record, with NPAT rising 45% YoY. For full-year 2025, NPAT rose 27% and revenue expanded 15%. Looking ahead, sustained NPAT growth of 16 - 18% is expected in 2026. In our experience, a broad earnings cycle is a more reliable support for valuation than any single macro indicator. That matters for VEIL because earnings breadth expands our investible universe materially, and it allows us to build conviction positions beyond the usual index leaders, where mispricing can be larger and persistence can be higher.

· The market's mechanics are improving, gradually but meaningfully. For global investors, the most important change is that the market is becoming easier to access and more reliable to operate in. Shortening the IPO-to-listing timeline to 30 days is one example. Work to improve clearing and settlement is another, because it strengthens confidence in the trading process itself. None of this changes the investment case overnight, but it does help reduce friction, support liquidity, and improve price discovery.

How this translates into VEIL's portfolio

We would frame our positioning through three lenses.

· Banks as the transmission mechanism. If Vietnam sustains healthy credit growth with improving asset quality, banks remain central to the earnings cycle. But "banks" is not a view, the question is which franchises can compound book value through disciplined provisioning, stable funding, and consistent fee income. We prefer banks with clear competitive advantages, improving capital positions, and sound risk control. That preference is reflected in VEIL's overweight exposure to leading banks, including positions in VP Bank, BIDV, Vietinbank, Techcombank and Vietcombank.

· Domestic consumption. We focus on businesses where the path to profit is visible through market share gains, unit economics, and operational performance. In consumer sectors, a small number of winners often take disproportionate value, and the market can underestimate the duration of that advantage. This is why we like businesses where earnings momentum can be underwritten through tangible drivers, rather than sentiment, and why Mobile World is one of our top holdings, where scale and execution matter more than narrative.

· Investment cycle beneficiaries. Infrastructure and industrial upgrading are priorities, but the equity outcome depends on where value accrues. We favour companies with visible revenue, repeatable project delivery, and the ability to protect margins when input costs or timelines move. Working capital discipline is critical. A growing order book is only valuable if it converts into cash without destroying returns.

Risks that could change the view

The risks we are watching are policy follow-through, external conditions, and earnings durability.

· Public investment throughput risk. The investment-led framework depends on on-the-ground progress, not announcements. If disbursement lags meaningfully, second-order beneficiaries will disappoint and confidence in the broader cycle could weaken.

· FX and global liquidity. Vietnam can tolerate volatility, but a sharp tightening in global funding conditions, or an external shock that hits exports, would quickly feed through to sentiment, imported inflation, and valuation support.

· An earnings cycle that proves less durable than the market now expects. If margins compress materially or demand weakens, the re-rating case becomes harder to sustain. This is why we focus on balance sheet strength and pricing power, because they give companies options when conditions tighten.

Conclusion

2026 is more likely to reward outcomes over narrative. For the portfolio, that means staying concentrated in businesses with visible earnings, resilient balance sheets, and attractive valuations. We are optimistic because earnings breadth is improving, dispersion is rising, and the market backdrop increasingly suits what VEIL is built to do - own high-quality companies that can perform through the cycle.

Top Ten Holdings (51.8% of NAV)

Source: Bloomberg, Dragon Capital

NB: All returns are given in total return USD terms as of 31 December 2025

For further information, please contact:

Vietnam Enterprise Investments Limited

Steven Mantle

+44 75537 01237

[email protected]

Jefferies International Limited

Stuart Klein

+44 207 029 8703

[email protected] 

Montfort

Gay Collins

+44 (0)7798 626282

+44 (0)20 3770 7905

[email protected]

h2Radnor

Iain Daly

+44 20 3897 1830

[email protected]

LEI: 213800SYT3T4AGEVW864