Performance summary* | 31 December | |
NAV per share** (USD): | 0.88 | |
Change (Quarter-on-quarter) | 2.5% | |
Total NAV** (USD 'm): | 314.8 | |
Share price (USD): | 0.69 | |
Market cap (USD 'm): | 246.1 | |
Premium/(discount): | -21.8% | |
* Figures in USD. Return percentages are for the period, not annualized. | ||
** NAV and NAV per share data are calculated on a quarterly basis. |
As at 31 December 2016, VinaLand Limited (the "Company" or "VNL")'s unaudited net asset value ("NAV") was USD314.77 million or USD0.88 per share. This represented a 2.46% increase from a NAV per share
of USD0.86 from its close of business on 30 November 2016. VNL's share price slightly decreased 0.36% to USD0.688 from a closing price of USD0.690 in November 2016, and the Company's share price to NAV discount now stands at 21.82% compared to 19.61% in November. VNL repurchased and cancelled 8.35
million ordinary shares in December, bringing the total since October 2011 to 142.03 million ordinary shares or 28.41% of the total shares in issue prior to the commencement of the share buyback program.
During December, the Manager continued to purchase shares which has reached 22,417,333 and equates to 6.26% of the company's total voting rights.
Fund updateCumulative change (% change) | ||||
3mth | 1yr | 3yr | 5yr | |
NAV per share | 2.5 | 3.3 | 6.4 | -17.9 |
Share price | 4.4 | 27.3 | 68.8 | 17.8 |
Nine VNL project revaluations were undertaken for the period ending 31 December 2016 by international property valuation consultants as part of the ongoing appraisal program. Five of these projects were located in Ho Chi Minh City and Hanoi with the remaining projects located in the southern and central regions of Vietnam. The overall results were upward, demonstrating some continued improvement in the market and overall confidence which has flowed through to real estate land valuations.
Following the 2016 Extraordinary General Meeting (EGM) in November 2016, VNL will continue to focus on project disposals enabling further distributions to shareholders. The combination of improving market
conditions in conjunction with the new term for VNL enables the Investment Manager to continue to focus on the ongoing disposal program to complete distributions to shareholders over the next 2-3 years.
On 16 December 2016, VNL announced that Mr. Nicholas Brooke, a member of the Board of Directors
resigned which took effect on 31 December 2016. Mr. Brooke was appointed on 13 January 2006 as a
Quarterly performance history (% change) | ||||
2016 | 2015 | 2014 | 2013 | |
Q1 | 0.6 | -3.3 | -0.4 | -1.0 |
Q2 | 1.4 | 1.1 | 1.2 | -5.8 |
Q3 | -1.2 | 0.6 | 0.0 | -5.2 |
Q4 | 2.5 | 3.9 | 0.0 | -1.0 |
YTD | 3.3 | 2.2 | 0.8 | -12.4 |
Non-Executive Director of VNL when launched in 2006 and served on the Board since then in the capacity of Director and Chairman. Mr. Brooke was appointed as Chairman in 2010 until October 2013 however continued to serve as both Director and a member of VNL's various Board committees. Mr. Brooke resigned to pursue new challenges thus the total number of VNL Board members, effective on 1 January 2017, was reduced to four members. As the Company's portfolio is reducing, the VNL Board resolved to maintain four Board Directors going forward.
The full redemption of the VinaLand Zero Dividend Preference (VNL ZDP) Shares occurred on 19 December 2016 and VNL ZDP shares are no longer traded. Following the redemption, the VNL debt at the fund level reduced to zero, so only debt at the project company level remains. VNL project level debt will also diminish as existing projects are divested.
On a final note, the Board has decided effective from 1st January 2017 to cease the issue of monthly reports, however the quarterly reports will continue to be issued. The reasons for this change include; there was considerable duplication of information in both the monthly and quarterly reports, the Company NAV is revised and announced quarterly and this will continue to be included in the quarterly reporting, and finally, projects disposals and other market sensitive news are announced at the time of closure and also again in the quarterly report so the monthly reports had become obsolete. The quarterly reports will continue with the next report scheduled to be issued being the Q4 2016 quarterly report, which will be released shortly.
Key investments | |||
Project | Location | Type | % portfolio NAV |
Pavilion Square | South | Mixed Use | 14.9% |
VinaSquare | South | Mixed Use | 13.6% |
Dai Phuoc Lotus | South | Township | 12.7% |
Times Square Hanoi | North | Mixed Use | 11.3% |
Aqua City | South | Township | 8.8% |
Trinity Garden | South | Residential | 8.1% |
Capital Square | Central | Mixed Use | 7.8% |
Green Park Estate | South | Mixed Use | 6.5% |
Phu Hoi City | South | Residential | 5.1% |
Total | 88.8% |
Developers actively pushed to sell units to buyers before the year-end, resulting in a number of new
1.30
1.10
0.90
0.70
0.50
0.30
0.10
NAV and share price performance0.88
0.69
Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
Adjusted Share Price on Capital Return Adjusted NAV per share on Capital Return
VNL portfolio by sector (NAV %) VNL NAV by sector (USDm)3.1%
200.0
Additional portfolio information | |
Current assets | 17 |
Divestments | 29 full and residential unit sales |
Debt | Fund level (ZDPs): fully redeemed |
Project level (Bank): 18.7% of NAV Fund Cash: 13.8% of NAV | |
Shares outstanding | 357,939,461 |
All figures are after the distribution of capital in June 2016 (USD35.06m or USD0.0876 per share) |
Residential Mixed Use
Township
26.4%
15.3%
150.0
100.0
50.0
Hospitality -
55.2%
Hospitality Township Mixed Use Residential Total Investment NAV Bank Debt
condominiums launched in both Ho Chi Minh City and Hanoi during the last quarter of 2016. According to CBRE Vietnam, an additional 9,145 condominium units in Ho Chi Minh City and additional 9,128 condominium units in Hanoi were launched in Q4 2016. Total new launches in 2016 reached 37,419 condominium units in Ho Chi Minh City and 30,028 condominium units in Hanoi, a drop of 10% and 13% year-on-year, respectively. As a result, the average selling price in 2016 increased by 5% year-on-year in both Ho Chi Minh City and
Hanoi. Vietnam's condominium market continued to see some signs of improvement with more launches and transactions within the mid-end property segment during 2016. A number of new condominiums will
continue to launch during the next three years hence the developers will be under pressure to soften the sale prices or offer new projects with longer repayment terms.
The landed property sector has also had more new launches in the vicinity of future infrastructure development around Ho Chi Minh City and Hanoi. An additional 500 units in Ho Chi Minh City and 600 units in Hanoi were launched in the fourth quarter of 2016, based on Savills Vietnam. Due to limited supply, the volume of successful transactions in both Ho Chi Minh City and Hanoi continued to improve during the fourth quarter of 2016 while average selling price in 2016 increased by between 5% to 15% year-on-year, especially in fast developing residential areas with consistent construction progress and quality. Project designs and unit layouts have changed to favour smaller unit sizes to meet buyers' budgets.
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Quarterly GDP growth (%)MarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDec 2010 2011 2012 2013 2014 2015 2016
In 2016, the average asking rents in the office sector improved approximately 8% year-on-year in Ho Chi Minh City but decreased by 3% year-on-year in Hanoi due to new supply. Rents for retail sector both in Ho Chi Minh City and Hanoi improved by approximately 3 - 15% year-on-year in CBD locations but reduced by approximately 4% - 6% year-on-year in non-CBD locations. New supply will come online in the next three years and landlords may soften their rents in an effort to reduce vacancy rates and make the office and retail markets more competitive.
60 Purchasing Managers' Index
55
50
Macroeconomic update
The Vietnamese economy concluded the year with a total GDP growth rate of 6.2%, lower than the government's target of 6.7% set at the start of 2016. Nevertheless, the economy showed stable and sustainable growth despite unfavourable global economic conditions and a severe draught affecting agriculture earlier in the year. With major indicators demonstrating that domestic consumption and manufacturing growth will continue to rise, we project that GDP growth in 2017 will be 6.5%.
Manufacturing: The Nikkei Purchasing Manager's Index for Vietnam slowed down to 52.4 in December, from a record high of 54 in November. Despite the monthly slowdown in manufacturing, the sector continued to see strong growth in exports and new orders.
Domestic consumption: Retail sales increased 10.2% year-to-date year-on-year in nominal terms and 7.8% in real terms in December. Furthermore, the General Statistics Office (GSO) reported that Vietnam's 2016 total retail revenue was USD118 billion.
45
Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Dec-16
40
Registered and disbursed FDI (2016, USDbn)20
15
10
Inflation: The Consumer Price Index rose 5% year-on-year in December with the major inflation drivers being government controlled (e.g., transportation, education and healthcare costs). Therefore, it comes as no surprise that full-year inflation would meet the government's target of 5% for the year.
Vietnam Dong: The Vietnam Dong (VND) experienced some FX turbulence with the USD/ VND interbank rates reaching 22,720 by year end. For the full year in 2016, the VND depreciated approximately 1.2% against the USD. We expect the State Bank of Vietnam (SBV) to maintain a depreciation of 2-3% against the USD and
we are confident that the government's estimated USD40 billion FX reserve will be sufficient to support the
currency.
Trade: The GSO estimated a trade deficit of USD300 million in December, bringing the year end trade surplus
down to USD2.7 billion.
Foreign Investment: Committed foreign direct investment (FDI) reached USD24.4 billion at the end of December, a 7.1% increase from the previous year, whereas actual FDI disbursements reached USD15.8 billion, a 9% year-over-year increase.
5
0
1,000
500
- (500)
(1,000)
(1,500)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Disbursed (YTD) Registered (YTD)
Monthly trade balance (USDm)Macroeconomic indicators | ||||
2015 | Dec-16 | 2016 YTD | Year-on-year | |
GDP growth1 | 6.7% | 6.2%2 | ||
Inflation (%) | 0.50% | 0.2% | 4.7% | 4.7% |
FDI commitments (USDbn) | 22.8 | 2.8 | 21.0 | 7.1% |
FDI disbursements (USDbn) | 14.5 | 1.5 | 15.8 | 9.0% |
Imports (USDbn)3 | 165.6 | 16.3 | 173.3 | 14.0% |
Exports (USDbn) 3 | 162.4 | 16.0 | 175.9 | 16.5% |
Trade surplus/(deficit) (USDbn) | (3.2) | (0.3) | 2.6 | |
Exchange rate (USD/VND)4 | 22,450 | 22,720 | -1.2% | |
Bank deposit rate (VND) | 5.0% | 5.8% | 80 bps | |
Sources: GSO, Vietnam Customs, SBV, VCB |1. Annualized rate, updated quarterly | 2. GSO estimate |3. Data as of 20 Dec 2016 | 4.(-) Denotes a devaluation in the currency, Vietcombank ask rate |
YoY CPI
MoM CPI
8
6
4
2
-
2013 2014 2015 2016
YoY CPI MoM CPI
3
2
1
0
(1)
Sources: GSO, Bloomberg
Board of Directors | VinaCapital Investment Management Ltd | ||
VNL's Board of Directors is composed entirely of independent non-executive directors. | |||
Member | Role | Member | Role |
Michel Casselman | Non-executive Chairman | Don Lam | Chief Executive Officer |
Ian Lydall | Non-executive Director | Brook Taylor | Chief Operating Officer |
Charles Isaac | Non-executive Director | David Blackhall | Managing Director, VNL |
Tran Trong Kien | Non-executive Director | Anthony House | Deputy Managing Director, Real Estate |
Oai Nguyen | Deputy Managing Director, Real Estate | ||
Fund background | |||
ISIN | KYG936361016 | ||
Bloomberg | VNL LN | ||
Reuters | VNL.L | ||
Fund summary | |||
Fund launch | 22-Mar-06, current term is for a period of approximately 3 years and commenced 22 November 2016 | ||
Term of fund | Originally seven years, but now subject to shareholder vote for continuation, with the next such vote to occur no later than 21 November 2019 | ||
Fund domicile | Cayman Islands | ||
Legal form | Exempted company limited by shares | ||
Investment manager | VinaCapital Investment Management Ltd | ||
Structure | Single class of ordinary shares trading on the AIM market of the London Stock Exchange plc | ||
Auditor | PricewaterhouseCoopers (Hong Kong) | ||
Nominated adviser | Grant Thornton UK LLP | ||
Custodian, Administrator and Transfer Agency | Standard Chartered Bank (Singapore & Vietnam) | ||
Registrar | Vistra Corporate Services (Cayman) Limited | ||
Brokers | Numis Securities (Bloomberg: NUMI) | ||
Lawyers | Gowling WLG (UK), Maples and Calder (Cayman Islands) | ||
Fee structure | A combination of a disposal fee which is 3% of distributable funds in Year 1, 2.75% in Year 2 and 2.25% in Year 3, and an alignment fee which is calculated on distribution to shareholders over a 3-year term. A monthly prepayment advance will be paid to the Manager as follows; Year 1: USD200,000, Year 2: USD150,000, and Year 3: USD100,000 and these prepayments will be deducted from the disposal and alignment fees calculated above. | ||
Investment policy | The Fund is now in a cash return period and will not make any investments, except where funds are required for existing projects. The Fund will seek to realise assets in the existing portfolio and continue with the development of selected projects to maximize value. | ||
Investment objective by geography | All existing investments are located in Vietnam. There will be no new investments during the current cash return period. |
2016 VinaCapital Group. All rights reservied.
Important Information
This document, and the material contained therein, is not intended as an offer or solicitation for the subscription, purchase or sale of securities in VinaCapital Vietnam Opportunity Fund Limited (the "Company"). Any investment in any of the Companies must be based solely on the Admission Document of that Company or other offering document issued from time to time by that Company, in accordance with applicable laws.
The material in this document is not intended to provide, and should not be relied on for accounting, legal or tax advice or investment recommendations. Potential investors are advised to independently review and/or obtain independent professional advice and draw their own conclusions regarding the economic benefit and risks of investment in either of the Companies and legal, regulatory, credit, tax and accounting aspects in relation to their particular circumstances.
The securities of the Companies have not been and will not be registered under any securities laws of the United States of America nor any of its territories or possessions or areas subject to its jurisdiction and, absent an exemption, may not be offered for sale or sold to nationals or residents thereof.
No undertaking, representation, warranty or other assurance, express or implied, is given by or on behalf of either of the Companies or VinaCapital Investment Management Ltd or any of their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this document and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise.
No warranty is given, in whole or in part, regarding the performance of either of the Companies. There is no guarantee that investment objectives of any of the three Companies will be achieved. Potential investors should be aware that past performance may not necessarily be repeated in the future. The price of shares and the income from them may fluctuate upwards or downwards and cannot be guaranteed.
This document is intended for the use of the addressee and recipient only and should not be relied upon by any persons and may not be reproduced, redistributed, passed on or published, in whole or in part, for any purposes, without the prior written consent of VinaCapital Investment Management Ltd.
ir@vinacapital.com
+84 8 3821 9930
www.vinacapital.com
Broker
Numis Securities
+44 (0)20 7260 1000
funds@numis.com
Vinaland Ltd. published this content on 20 January 2017 and is solely responsible for the information contained herein.
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