Introduction to Vietnam ETF constituent stocks and investment ideas

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  • background
    • There is a popular saying recently, the general idea is “Thanks to China, Hong Kong has made Singapore, and Shanghai and Shenzhen have made Vietnam and India” – I miss Trump’s 462nd day.
    • One of my investment views is “Which level you see, buy which level.” For example, I am relatively familiar with the Internet and can decide to buy Meituan or Ali. Zhongjian ETF is worthless to me; I am optimistic about the medical industry, but I don’t understand Hengyuan. What do Rui, WuXi, and Asymchem do? You can buy medical ETFs.
    • When the epidemic started in 2020, I bought the Singapore ETF (EWS), but after I bought it, I found that it has not risen. Later, I took a closer look at the composition of the ETF and found that there are actually quite a few familiar companies, such as CapitaLand, there may be many People don’t know that CapitaMall, Raffles, and Ascott are actually Singapore companies, so it’s understandable why they fell.
    • It’s easier said than done. After reading it, I actually opened a Vietnam ETF (VNM) in March 2020, and I increased my positions in 21 and 22, but I haven’t looked at the composition carefully. One may have seen it but forgot. , One may be that it doesn’t matter if it is bullish or not. But anyway, it still needs to be looked at.
  • TL;TR
  • Vietnam (Vietnam) ETF (VNM) Constituent Profile
    • As of April 27, 2022, the issuance scale of VNM is 460 million US dollars (Indian ETF is 6.4 billion US dollars), and the top 10 constituent stocks account for 56.22%. For the sake of understanding, the following market value is directly converted into RMB, and 1 RMB on the day= 3505.5 Vietnamese Dong = 4.483 New Taiwan Dollars.
    • Vingroup 8.7%
      • Benchmark: China Resources (actually reluctantly, it has more business than China Resources, and China Resources is a state-owned enterprise, but I really can’t think of a better benchmark), or benchmark: Vanke + BYD…
      • The largest private enterprise group in Vietnam, Boss is the richest man in Vietnam, Fan Riwang (this person is also legendary, born in Vietnam, studied in Russia, started a business in Ukraine and sold instant noodles, and became the richest man in Vietnam), with many businesses, I counted 19 subsidiaries, including real estate (that is, Vinhomes below), automobiles (VinFast, the first mass-produced automobile company in Vietnam, and plans to be listed on the US stock market in 2022), mobile phones (VinSmart, which will be terminated in 2021), shopping malls + supermarket convenience stores (including supermarket convenience stores in 2019) Sold to MSN below), resort amusement parks, primary and secondary schools, kindergartens, medical care, etc. It seems that every country in Southeast Asia has such a company, but it is difficult to find a complete benchmark in China.
      • Code: VIC; market value: 82.6 billion, price-earnings ratio: -113.87, price-book ratio: 1.86.
    • Hoa Phat 7.29%
      • Benchmark: Baosteel
      • Hefa Group, whose main business is steel, does not need to be introduced in detail.
      • Code: HPG; market capitalization: 52.5 billion, P/E ratio: 5.75, P/B ratio: 2.03.
    • Vinhomes 6.64%
      • The real estate development company under Vingroup, the largest in Vietnam, was spun off and listed in 2018 and holds Landmark 81, the tallest building in Vietnam. If I suddenly want to go to Vietnam in the future (well, if the country is not permanently closed), I should visit my properties.
      • Code: VHM; market capitalization: 78.8 billion, price-earnings ratio: 7.21, price-book ratio: 2.15.
    • No Va Land Invenstment 5.78%
      • Benchmark: Evergrande
      • Residential and resort real estate developers, after thinking about Vanke, Wanda, and Evergrande, may be closer to Evergrande (of course, the Evergrande Auto and Bingquan must be removed), mainly three businesses: residential, resort (such as Henghai Huadao, etc.), industrial parks.
      • Code: NVL; market value: 44.6 billion, price-earnings ratio: 44.53, price-book ratio: 3.8.
    • MSN Emerson Radio 5.72%
      • Benchmark: Haitian; or Benchmark: Haitian + Master Kong + Yonghui + Muyuan + Tianqi
      • Ma San Group Corporation, a fast-moving consumer goods company, also owns multiple businesses, including consumer goods (fish sauce, soy sauce, instant noodles, beer, etc.); supermarkets (acquired Vingroup’s supermarket business, with 122 supermarkets and 2,619 supermarkets by 2021) A convenience store); meat; minerals and chemical processing (the world’s largest tungsten mine, there is no famous tungsten company in China, let’s take Tianqi to understand it); bank (one of the largest joint-stock banks in Vietnam).
      • In particular, fish sauce, also known as fish soy sauce, is a condiment with Vietnamese characteristics. It feels that the status of rivers and lakes is equivalent to soy sauce in my country and curry in India. Saw a message that Masan made his fortune from fish sauce.
      • Code: MSN; market value: 45.2 billion, price-earnings ratio: 15.96, price-book ratio: 3.86.
    • Feng Tay Enterprises 4.86%
      • Benchmark: Huali Group (Actually, I am not familiar with this, the market value is 76.8 billion, 3 times more than Hailan Home, nearly 5 times Semir)
      • Fengtai Enterprise is actually a Taiwanese company listed in Taiwan. Its main business is OEM shoes. I don’t understand why it is put into Vietnam ETF. It may be that most of its production is located in Vietnam. I looked at the company introduction: they said that 1/6 of Nike’s shoes are produced by them, and they have a factory in China and Vietnam (it feels mainly in Vietnam), with 130,000 employees.
      • Code: 9910; market value: 37.4 billion, price-earnings ratio: 36.79, price-to-book ratio: missing.
    • Vietnam Dairy Products 4.81%
      • Benchmark: Yili
      • Vietnamese milk, with a market share of more than 50%. This is a better benchmark than Masan. . .
      • Code: VNM; market capitalization: 44 billion, price-earnings ratio: 16.8, price-book ratio: 4.42.
    • Eclat Textile
      • Benchmark: Shenzhou International
      • Ruhong Enterprise is also a listed Taiwanese company in Taiwan. The main difference between it and Fengtai is that its main business is fabrics & garments. 160,000 employees.
      • Code: 1476; market value: 29 billion, price-earnings ratio: 225.87, price-to-book ratio: missing.
    • Saigon Thuong Tin Commercial 4.4%
      • Benchmarking: Ningbo Bank (I don’t know which bank is better to benchmark, it is a bank anyway)
      • Vietnam Saigon Commercial Bank, Vietnam’s first listed commercial bank, but I don’t know if it is awesome or not.
      • Code: STB; market value: 14.3 billion, price-earnings ratio: 16.81, price-book ratio: 1.51.
    • VietJet Aviation 3.39%
      • Benchmark: Spring Airlines
      • VietJet Air, the first private airline in Vietnam, also has routes in Thailand besides Vietnam. I checked and unfortunately found that I have not been on a Vietjet flight.
      • Code: VJC; market value: 19.6 billion, price-earnings ratio: 728.81, price-book ratio: 4.14.
  • investment ideas
    • Write my feelings here
    • 1. Overall idea
      • 1. Rear view mirror. There is a method for entrepreneurship and investment called “rearview mirror”. Simply put, developing countries will copy the path of developed countries, so investment in developing countries by developed countries is actually a process of reproducing history. We also usually say that China is equivalent to the United States N years ago, and Vietnam is equivalent to China N years ago. Of course, I have never been to Vietnam, and I have no intuitive experience. After a rough look, in 2021, China’s per capita GDP will be 12,551 yuan, and Vietnam’s will be 3,718 US dollars.
      • 2. Benefit, relative benefit and absolute benefit. It does not mean that Vietnam has developed and its GDP has increased, and Vietnam’s ETF will grow (big A shareholders should feel the same), but the core still depends on “who made the money”. It is generally accepted that the development of Vietnam comes from the relocation of China’s manufacturing industry. I agree with this statement. However, the companies that make profits from brands (such as Apple) and manufacturing (such as Foxconn) are not listed in Vietnam (also in VNM). It can be seen that the two manufacturing industries are Taiwanese companies), the one that really stays in Vietnam, I can feel one is the affiliated enterprises (for example, steel is required for building factories, and electricity is required for operation, but Foxconn obviously does not build steel plants by itself), The second is the increase in the income of laborers and the increase in consumption brought about by the increase in the profits of local listed companies, such as buying houses and cars, making soy sauce and drinking milk.

        The above two are related to the issue of benefit, or the extent of growth, which is referred to here as relative benefit or absolute benefit. For example, in one case, Goertek, for example, relocates its factories from China to Vietnam (of course, there is another kind of new production capacity, which is only assumed to be relocated here), which will be reflected in the reduction of costs and the increase in profits, which will also benefit investors; in a case, such as the increase in Apple The income in Vietnam may only increase by 10 billion, and it will not be so conspicuous in the plate of 1 trillion; in the above two cases, obviously the stock price cannot be directly changed from 100 to 200, but as far as the development of Vietnam is concerned, Maybe some of the results are hidden in companies big and small that have business in Vietnam, including companies such as Google and Microsoft.

        In contrast, some companies, if they bring substantial growth due to the development of Vietnam, I call it a decision benefit. If we take China as an example, I call Apple and Tesla a relative benefit, while Tencent, Ali, all belong to the absolute benefit. It can be seen that the absolute benefits all come from local companies, and it does not matter where to list. This is where the value of investing in Vietnam ETFs lies.

      • 3. One point to consider about the exchange rate is that if the total market value of the Vietnamese dong-denominated constituents of the Vietnam ETF increases by 10%, and the Vietnamese dong depreciates sharply, the dollar-denominated ETF may fall instead. Fortunately, I am After reading it, the exchange rate of Vietnamese Dong is relatively stable, so it will not be expanded.
    • 2. Specific ideas
      • 1. The stock selection of ETF is based on university questions (S&P YYDS). VNM’s stock selection logic does not know what it is. What can be seen is: private companies, and the top of each industry. As a whole, Vietnam is indeed a bit like China a few years or more than a decade ago. It is in the construction period in full swing, so the most popular category is construction, and the other category is consumption.
      • 2. From a static point of view, Vietnam ETFs are not undervalued, but may be overvalued. I haven’t seen the average price-earnings ratio of Vietnam ETFs and I don’t plan to calculate them, but the overall feeling may be that the PE multiple is higher than China’s. The reason may be that : Vietnam has also been affected by the epidemic in the past two years, such as Vingroup’s shopping malls, resorts, and Vietjet’s airlines; global investors are not allowed to have absolute value depressions (even Hong Kong does not count).
      • 3. It must be understood that investing in Vietnam ETFs is not about the rise of the manufacturing industry, but the surrounding opportunities brought about by the rise of the manufacturing industry, as well as the increase in labor income and consumption, resulting in increased profits. Some of these Early (such as building a factory), there is a lag (such as buying a house and a car, or even waiting for them to collect enough money).
      • 4. It is a pity for Vietnam. It seems that Vietnam cannot absolutely benefit from some of the best industries. For example, the Internet. Although Google was scolded when it was expelled from China, it is also because of this that China can have BAT, etc. Companies, but unfortunately, on the one hand, these companies are not in A shares (otherwise it would not be the case with big A), on the other hand, these advantages are being smashed by our own hands.
      • 5. On paper, I feel shallow, and I absolutely know that this matter has to be done. Unfortunately, I have basically traveled all over Southeast Asia, but Vietnam has been in the plan but never went. Of course, if you go purely for tourism, it may not make much sense. For example, I have been to Thailand 10 times, and I don’t know much about Thai companies.
  • The basic conclusion is: Vietnam ETFs can be configured, but not too much. Looking at it, my current position is 2.5%. I feel like I can add more, but I really don’t really understand it. Let’s learn more about it.
  • I will also look at it later and thank China and India.

The introduction of Vietnam ETF constituent stocks and investment ideas first appeared in Laughing Books .

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