Results analysis from Kepler Trust Intelligence

Vietnam Enterprise Investments (VEIL)

24/09/2025

Results analysis from Kepler Trust Intelligence

Vietnam Enterprise Investments (VEIL) has reported interim results for the six months to 30/06/2025, a period which captures the selloff in Vietnam after 'Liberation Day', but not the full and striking rally since tariffs were watered down.

For the half year, the NAV per share fell 7.7% in sterling terms (down 2.3% in USD), with the VNI Index down 2.3% in sterling (up 6.9% in USD). However, post-period end the NAV rose by 27.7% in sterling terms to 31/08/2025, outperforming the VNI Index by around 4%. 

In the half year to the end of June, there were two main factors behind the underperformance. Large-cap stocks were hardest hit by foreign outflows when Trump announced a punitive initial tariff schedule. Additionally, the Vingroup conglomerate and related companies outperformed, with VEIL long having held an underweight position on quality grounds.

A tilt to domestic-oriented sectors helped the portfolio to outperform in the recovery, after a lower level of tariffs was agreed.

Chairman of the board Sarah Arkle commented: "The structural case for Vietnam is compelling. The policy drive to modernise institutions, the continued buildout of infrastructure, and the rising depth of local savings and capital markets should be powerful, multi-year tailwinds."

Kepler View

Vietnam has genuinely exciting prospects which have been little-dimmed by the tariff fiasco. Domestic demand and government investment boosted GDP growth to 7.7% in just the first half of 2025 alone. Vietnam Enterprise Investment's (VEIL) manager, Tuan Le Anh, comments that its growth is domestically-driven, which he hopes will make it more durable than past cycles. VEIL is positioned accordingly, with core positions in banks, real estate and consumption-related companies. A key reason, in our eyes, to remain bullish on Vietnam is the commitment of the authorities to reform and to grow the private sector. We think this should strengthen the link between GDP growth and corporate earnings growth which could see Vietnamese equities deliver good returns. Important reforms in process include the consolidation of provinces and ministries, which has been completed, faster rollout of infrastructure and tax reform. Meanwhile, liberalisation of permitting and planning rules in the real estate sector led to it performing well in June.

Vietnam is expected to be upgraded to Emerging Market status by FTSE this month, which could boost foreign investment in its equities and increase liquidity. Dragon Capital are projecting EPS growth for its universe of 80 investable stocks of around 20% for 2025 as a whole, yet at the end of June they traded on an average forward P/E of just 10.4x. Low valuations and high earnings growth could lead to exceptional returns, with concerns about tariffs, the health of key trading partner China, and general risk aversion in a world of high interest rates likely contributing to the current low rating.

The cheapness is compounded by the discount on VEIL's shares, which stood at 17% at the time of writing. The board has demonstrated significant commitment to narrowing it, buying back 8% of the share capital in 2024 and c. 10% in 2025 so far. VEIL's manager, Dragon Capital, is the oldest-standing investment manager in the country with exceptional access, contacts and expertise. We think this and the discount, along with the commitment by the board to narrow it, make VEIL an attractive way to invest in Vietnam's strong growth trajectory.

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