PYN Elite rose 5.0% in May, outperforming the VN Index’s 4.3%, driven by ACV (+24%) and CMG (+36%). The Vietnamese technology sector is advancing up the value chain and becoming increasingly important. In April, Nvidia signed a partnership with FPT, and toured CMG’s data center. In May, several tech-related developments took place: Infosys co-founder Narayana Murthy visited Vietnam meeting with government, FPT, and local tech communities; the US’s Marvell Technology announced a new design center in Da Nang and plans for another in HCMC; China’s Victory Giant Tech Group will build a high-precision PCB factory; and Alibaba plans to build a data center in Vietnam.
Macro: Industrial production growth +8.9%, maintaining the acceleration trend and is the highest since Sep 2022. Export +15.8% in May driven by electronic shipments. Imports +29.9% driven by a broad-based increase in production inputs, suggesting manufacturers remain optimistic about the order demand in the coming month. PMI stayed positive at 50.3 in May. Retail sales picked up to a 6-month high of +9.5% in May, with accommodation & catering services +17% YoY and tourism +34% YoY. 5M 2024 international arrivals +65% YoY to 7.6 million.
The PYN Elite Stock of the Month: STB
The market has yet to grasp the impact of STB’s share auction and its profitability. Firstly, STB aims to complete the auction of its 32.5% stake pledged at VAMC, which is collateral against non-performing assets of 20 trillion. STB fully provisioned this amount, and the auction proceeds will recover the loss and bolster hugely its current equity of 48 trillion. Secondly, during 2018-2022, STB allocated 64% of its profit to VAMC-related provisions, massively understating profitability ratios such as NIM and ROE. We forecast STB’s ROE to reach 18-20% in the next three years as the VAMC burden is gone. Thirdly, STB maintained prudent lending policies with 0% exposure to corporate bonds and only 1% to real estate developers, meaning little NPL concern.
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.