vinacapital vietnam opportunity fund limited fund update 2 manager comment portfolio data market...

VinaCapital Vietnam Opportunity Fund Limited

Fund update 2Manager commentPortfolio data

Market update 5Macro economyReal estate market

Company and project updates 7

Note on valuation methodology 10

Historical financial information 11

Manager information 12

Quarterly report 31 March 2012

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Jump to: Fund update Market update Company and project updates Note on valuation Historical financial information

VinaCapital Vietnam Opportunity Fund AIM: VOF

Manager information

Manager comment

VOF’s net asset value was USD753.8 million or USD2.36 per share as at 31 March 2012, an increase of 7.1 percent from the auditor reviewed net asset value of USD704.9 million or USD2.20 per share at 31 December 2011. The fund’s share price rose to USD1.55 per share at the end of the quarter, up 22.4 percent from USD1.27 in December 2011. The share price to NAV per share discount decreased to 34.2 percent in March from 42.0 percent in the previous period.

VOF has continued to carry out its share buyback program in Q1 2012, repurchasing a total of 1,009,000 shares. As of the end of March, 4,597,00 shares have been repurchased, leaving 320,013,259 in total voting rights for the fund.

For the first quarter, VOF’s capital markets portfolio increased 21.0 percent, contributing to approximately a 9.0 percent increase in overall NAV. However, an USD8.0 million write-down on the fund’s real estate projects, negatively impacted NAV by 1.1 percent, bringing the overall return to 7.1 percent year to date.

The fund’s listed investee companies that performed the best during the quarter include Kinh Do Corp (KDC) up 63 percent, Development Investment Construction (DIG) up 62 percent, Eximbank (EIB) up 34 percent and Hoa Phat Group (HPG) up 49 percent.

On 23 March 2012, VOF announced the acquisition of the remaining 75 percent stake in the Clear Interest Group (CIG) which holds, among other assets, a 19.95 percent interest in the Legend Hotel. The purchase gives VOF a 100 percent stake in CIG and includes a call option to acquire a controlling stake of the hotel at a later date.

The full announcement is available here.

Additionally, VOF announced there has been change in ownership of VinaCapital Group Limited ( “Group”), the parent company of VOF’s investment manager, VinaCapital Investment Management Limited (“Investment Manager”). The investment strategy and operations of the listed funds managed by the Investment Manager, including VOF, remain unchanged. The purchase consolidates the ownership of the Group and will enable senior managers to participate in the equity of the Group, but it will have no impact on day-to-day operations or strategic direction of the Group and VOF. More details on the announcement is available here.

The manager presented at this year’s Edmond de Rothschild Emerging Markets Fund Conference in London on 29 February 2012. The webcast of the presentation is now available on our website here.

Performance history (% change on NAV)

2012 2011 2010 2009 2008 2007 2006

YTD 7.1% -7.6% -1.6% 29.7% -46.6% 37.4% 64.9%VN Index 26.8% -25.6% -7.2% 47.7% -68.6% 23.5% 142.4%

31 March 2012NAV 2.36 per share (↑ 7.1% q-o-q)Total NAV: USD753.8 million

Performance summary Cumulative change:

31-Mar-12 3mth 1yr 3yr 5yrNAV per share

2.36 7.1% 5.6% 30.9% -24.7%

Share price 1.55 22.4% -8.8% 64.9% -54.9%Premium/(Discount) (34.2%) Market cap 497m Total NAV 753.8m

NAV and share price performance (31 March 2012)

0.0

1.0

2.0

3.0

4.0

5.0

SP 1.55

NAV 2.36

USDm

Fund background

VinaCapital Vietnam Opportunity Fund (VOF) is a closed-end fund trading on the AIM Market of the London Stock Exchange.

ISIN KYG9361Y1026Bloomberg VOF LNReuters VOF.L

Investment objective

Medium to long-term capital gains with some recurring income and short-term profit taking. Primary investment focus areas are: Privately negotiated equity investments; Undervalued/distressed assets;Privatisation of state-owned enterprises; Real estate; and Private placements into listed and OTC-traded companies.

View VOF details.

Download VOF factsheet.

Fund managing director

Andy Ho

Manager

VOF is managed by VinaCapital Investment Management Ltd (VCIM) and requires investment approvals from a four memberInternal Investment Committee.

More information about VCIM is available here.

http://www.vinacapital.com/news.php?id=815

http://www.vinacapital.com/news.php?id=825

http://www.vinacapital.com/VinaCapitalfundsupdate-2012Rothschildconference/

http://www.vinacapital.com/download.php?files=VOF.Factsheet.June.2011.pdf

http://www.vinacapital.com/index.php?l1=81





Manager information

Top holdings at 31 March 2012

Top 5 listed investments

Name of investee % of NAV Sector Description

Vinamilk (VNM) 7.9 Consumer goods Leading dairy company with dominant market share.

Eximbank (EIB) 6.8 Financial services One of the top ten commercial banks.

Kinh Do Corp (KDC) 4.1 Consumer goods Top confectionary manufacturer in Vietnam.

Hoa Phat Group (HPG) 2.5 Industrials Major steel manufacturer.

Phu Nhuan Jewelry 1.8 Consumer goods The largest jewelry manufacturer and distributor in Vietnam.

Top 5 OTC investments


An Giang Plant Protection 4.5 Agriculture Leading plant protection chemicals firm.

Halico 1.3 Consumer goods Liquor producer with popular brands.

Nam Viet Oil 0.7 Mining/Oil & Gas Major gasoline producer.

Binh Dien Fertiliser 0.4 Agriculture Largest NPK fertiliser producer.

Tam Phuoc Industrial 0.3 Real estate An industrial park, a subsidiary of Tin Nghia, Dong Nai’s biggest state corporation.

Top 5 real estate investments

Project % of NAV Sector Description

Sofitel Metropole 7.8 Hospitality Vietnam’s top city-centre hotel.

Century 21 3.6 Real estate HCM City residential development.

Legend hotel 3.5 Hospitality One of the leading 5 star hotels in Ho Chi Minh City.

Dai Phuoc Lotus 3.0 Real estate Residential developer with townhouse sales underway.

VinaLand Ltd (AIM: VNL) 2.8 Real estate VCIM-managed Vietnam real estate fund.

Top 5 private equity investments


Prime Group 1.8 Industrials Ceramics producer with dominant market share.

Yen Viet 1.1 Agriculture Produces birds nest nutritional products.

IBS 1.0 Industrials Construction materials firm.

International School, HCMC 0.7 Education Leading international school in Ho Chi Minh City providing world-quality education.

Indochina Food 0.6 Consumer goods The leading sugar and ethanol manufacturer in Vietnam and Cambodia.





Manager information

Performance by asset class, Q1 2012 (USD’000)

Recent divestment results

Portfolio by asset class

Portfolio by sector

Others 5.3%

Cash 5.1%

Other sectors 4.1%

Pharma and healthcare 2%

Mining/Oil & Gas 2.6%

Agriculture 8.9%

Financial services 8.6%

Industrials 6.2%

Consumer goods 16.2%

Hospitality 12.4%

Real estate equities 5.3%

Real estate projects 23.1%

Capital markets Private equity Cash and others Hospitality projects Real estate projects Total P/L

46,000

48,000

50,000

52,000

54,000

56,000

58,000

60,000

62,000

54534.0705376252

5,401

-693 -669

-7,366 51206.5674344802

Exit date Dec-10 Dec-10 Dec-10 Apr-11 May-11 Dec-11 Feb-12

Entry date Nov-04 Feb-07 Jan-07 Nov-06 Sep-04 Sep-09 Feb-07

Gross XIRR 19% 35% -13% 59% 54% 51% 7%

Multiple 1.8 1.7 0.7 5 4

2.2

1.4

VinaCafe Licogi 16 Itaco Halico International School

Hoan My Hos-pital

Pho 24 -

10.0

20.0

30.0

40.0

50.0

60.0

Investment Exit

USDm

Others 5.3%

Cash 5.1%

Bonds 1.2%

Private equity 7.5%

Overseas equity 1.1%

OTC stocks 7.6%

Listed equity 36.6%

Real estate 35.5%





Manager information

GDP growth fell to 4.0 percent in the first quarter, compared to 5.6 percent last year.

The VND appreciated 0.8 percent against the USD in the first quarter.

Inflation fell to just 2.6 percent for the first quarter of 2012

Interest rates remain high, but should decrease in the near-term as the government has lowered policy rates and deposit caps.

Macro economy

The macroeconomic headlines were dominated in the first quarter of 2012 by Vietnam’s GDP growth of 4.0 percent versus 5.6 during the same period a year ago and the lowest since June 2009. The industry and construction sector grew 2.9 percent, while agriculture, forestry, and fishery production increased 2.8 percent from the same period last year. Contributing the most towards first quarter GDP growth was the services sector, which grew 5.3 percent. As a result of the lower inflation and the deceleration of GDP growth, the State Bank of Vietnam (SBV) lowered policy rates and the deposit rate cap by 1 percent.

The VND closed the month of March at a reference rate of approximately VND20,830 versus the USD from the end of December 2011. Stabilizing efforts have clearly been working during the first quarter of 2012 as the VND has actually appreciated 0.8 percent, primarily due to the trade deficit reaching only USD300 million year to date. For all of 2011, the deficit nearly reached USD10 billion, placing huge pressure on the government to devalue the VND last year. Additionally, the spread between the free market exchange rate and the official bank rate has effectively gone to zero, indicating that there is very little pressure for the VND to devalue more in the near-term. Exporters are willing to sell their USD to the SBV or other commercial banks providing an ample supply in the foreign exchange market. We continue to estimate an interbank rate of VND22,000 per USD by the end of 2012.

During March, the inflation rate was 0.16 percent, equivalent to 14.2 percent year-on-year and 2.6 percent for the first quarter. The reduction in CPI has come primarily from a weakness in aggregate consumer demand as purchasing power fell as a result of the high levels of inflation throughout 2011. The removal of subsidies in major utility and transport sectors such as electricity and gasoline, as well as an expected increase in the minimum wage due in May, will continue to impose added pressure for inflation throughout 2012. However, we project CPI to continue its descent, reaching 10.0 percent for the year, down substantially from 18.1 percent in 2011.

However, interest rates remain very high at between 15.0 and 20.0 percent for business loans, higher for non-performing sectors of the economy. Throughout the first quarter of 2012, there have been widespread shortages of capital and an inability for businesses to access bank credit. The government has identified the potential for the economy to enter stagflation and have removed some restrictions on bank lending, specifically within the real estate sector, as well as a 1.0 percent reduction in policy rates and deposit caps. Also, the government has liberalized bank loans for the basis of consumption. An estimated 60 to 70 percent of total consumption comes from the private sector, a major driver of GDP growth.

Note: GDP figure updated quarterly. Exchange rate is Vietcombank ask rate at end of period. Sources: GSO, SBV, VCB.1 Annualised rate. 2 Includes gold. 3 State Bank central rate.

Vietnam GDP quarterly growth

Macroeconomic indicators and forecast

2011 Mar-12 YTD Y-o-Y change

GDP growth1 5.9% 4.0%

Inflation 18.1% 0.16% 2.6% 14.2%

FDI (USDbn) 14.7 1.4 2.6 9.7%

Imports (USDbn) 105.8 9.3 24.8 6.9%

Exports2

(USDbn) 96.3 9.1 24.5 23.6%

Trade deficit (USDbn) 9.5 0.2 0.3 -91.9%

Exchange rate3

(USD/VND) 21,036 20,860 -0.8% 0.0%

Bank deposit rate (VND %) 12.0-14.0% 13.0% -7.1% -7.1%

Mar

-09

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

Jun-

11

Sep-

11

Dec

-11

Mar

-12

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00





Manager information

Real estate market

Demand throughout Vietnam’s real estate market remained slow throughout the first quarter of 2012, which included the annual lunar new year (Tet) holiday. Additionally, the quarter’s slow GDP growth of 4 percent and a high interest rate environment did not help conditions. Construction of many residential and commercial projects have come to a halt for an extended period of time. The only sector experiencing signs of life are affordable residential landed housing developments. Also, for the quarter, the hotel sector performed modestly while the retail sector is looking likely to stabilize in the near-term.

Within the office sector, there was no added supply during the quarter in Hanoi, while Ho Chi Minh City (HCMC) only had seven Grade C buildings become operational. The combination of low office space demand and the financial constraints facing developers, continues to cause significant delays in construction progress. However, net absorptions in both Hanoi and HCMC have improved, with 14,000 sqm and 32,000 sqm in NLA respectively, above quarterly averages for 2011. Vacancy levels have dropped due to a reduction in rent prices. As of note, VOF has almost no exposure in the office sector.

International retailers continue to drive demand for retail space in Vietnam. During the quarter, two major retail deals were completed. A long term lease between Takashimaya and Keppel Land for approximately 15,000 sqm of retail space was signed for Saigon Centre, currently in phase two. Secondly, an investment deal involving another retailer from Japan, AEON Group, which acquired approximately 3.5ha at the retail site in Celadon City, a development by a Malaysian group and local developer in the Tan Phu District.

In the residential condominium market, first quarter launches of new supply equaled only 648 units in HCMC, one ninth the level launched during the same quarter a year ago. However, unit prices remained flat as developers were noticeably reluctant to further reduce prices or add incentives. Although, anecdotal evidence from sales agents showed positive sentiment and growing interest from prospective buyers at the end of the quarter. Within the landed property sector, HAGL (HAG) launched a land plot project in District 9, HCMC in April. According to HAG, the project, comprising of 300 lots at affordable prices, ranging from USD70,000 to USD200,000 was nearly sold out over one weekend.

During the quarter, approximately 1.9 million foreign tourists visited Vietnam, a 24.5 percent increase from a year ago. However hotel performance was modest with both occupancy rates and revenue per available room lower across all types, year-on-year. VinaCapital’s hotels demonstrated a slight improvement in both these categories when compared to last year. During the quarter a wide range of hotels were launched, with 14 hotels of 3-4 star quality for a total of 877 rooms, added to the HCMC market.

Supply and demand for most real estate sectors are at lows

Office space construction continued to slow, but net absorption improved

Two major retail deals were struck during the quarter, bringing optimism into the retail sector

Hotel performance was negatively impacted by increased supply, despite higher foreign tourism

High-end Mid-end Affordable0

5,000

10,000

15,000

20,000

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Existing Supply New completionNew launch Current Price (as of Q1 2012)

HCM City international hotels, as at Mar 2012

HCM City condominium market, Q1 2012

Units USD/sqm

Source: VinaCapital

Source: CBRE Vietnam

Mövenpick

Park Roya

l SG

Star city

Equatorial

Windso

r

Duxton

Caravelle

Legend

Sheraton$0

$20$40$60$80

$100$120$140$160$180

0%10%20%30%40%50%60%70%80%90%

ADR (USD) Occupancy (%)





Manager information

An Giang Plant Protection JSC (AGPP)

An Giang Plant Protection JSC, formerly a state-owned company, is currently the market leader in the manufacturing and distribution of pesticides in Vietnam. The company utilizes its strong and extensive distribution network of 23 stock-keeping units (SKU), 500 wholesalers, and 4,500 retail outlets. The company has over 900 employees in offices in Ho Chi Minh City and Cambodia, two pesticide and five seed factories, a laboratory, and a packaging plant.

In 2011, the company invested in three rice mills with capital expenditure of USD19 million as part of its new business strategy. The expansion into the rice processing sector is to generate more organic revenue from operations higher on the value chain of the agriculture sector.

For FY 2011, AGPP reported revenue of USD231.9 million and a net profit of USD20.3 million, an increase of 20 and 55 percent year-over-year respectively, underpinned by improved gross margins and a significant USD2.9 million decrease in foreign exchange losses. The company has proposed to pay a cash dividend with a yield of 6.6 percent.

As at 31 March 2012, market capitalization was approximated USD135.7 million, with 2012 P/E and P/B of 6.6x and 2.3x respectively. Additionally, An Giang Plant Protection is planning to list on the Ho Chi Minh Stock Exchange in the near-term.

VOF at 31 March 2012 held a stake in AGPP valued at USD33.6 million

Vinamilk (VNM)

Vinamilk (VNM) is the leading dairy products manufacturer and distributor in Vietnam, with more than 30 percent of the total dairy market. The company offers a wide range of products, from fresh and powdered milk to condensed milk, yogurt and coffee. The domestic market accounts for about 90 percent of total sales. It is the first Vietnamese company to be one of Asia’ s Top 200 Small and Midsize Companies, according to Forbes, ranked 18th among the Top 200 in terms of profit and 31st in overall market value.

In 2011, VNM achieved net revenue of USD1.06 billion, 29.5 percent YoY growth. Over the past 3 years, VNM has achieved a CAGR of 37 percent for revenue, helping to achieve its target revenue of USD1.0bn two years ahead of schedule. Net profit for 2011 was USD 199.3m, up 15.2 percent compared to 2010. VNM set a target to triple revenue to USD3.0 billion by 2017. The company expects these results given the growth expectations of Vietnam’s current dairy consumption per capita, at just 9kg per capita, per year, compared to 24kg and 60kg for China and Europe, respectively.

VNM closed at VND 90,000 per share as of 31 March 2012, at a PE of 10.7x for 2012 and a P/B 2012 of 3.3x.

VOF at 31 March 2012 held a stake in VNM valued at USD59.9 million

Financial highlightsProfit and loss VND bn) FY10A FY11A FY12E

Revenue 17,184 22,264 26,480

Gross profit 5,173 6,554 7,680

Gross margin 30.1% 29.4% 29.0%

Net income 3,616 4,166 4,690

Net margin 21.0% 18.7% 1877%EPS (adjusted) 6,845 7,632 8,420DPS 2,000 3,000 3,000Balance sheet (VND bn)

Total assets 10,773 15,564 15,564

Shareholders’ equity 7,964 12,412 15,000

ROE (%) 45.4% 33.6% 33.6%Book value per share (VND) 14,323 22,323 26,929Valuation (VND bn) PER (x) 12.6 12.0 10.7P/B (x) 6.0 4.0 3.3Dividend yield (%) 2.3% 4.4% 3.3%

Financial highlights

Profit and loss (VND bn) FY09A FY10A FY11A FY12E

Revenue 3,176 4,062 4,869 5,599Gross profit 912 1112 1,361 1,565Gross margin 28.7% 27.4% 28.0% 28.0%Net income 328 276 427 491Net margin 10.3% 6.8% 8.8% 8.8%EPS (adjusted) 14,578 6,195 6,876 7,907DPS 12,148 4,444 6,876 7,907 Balance sheet (VND bn)Total assets 1,538 1,854 2,707 3,012Shareholders’ equity 638 1,024 1,225 1,530ROE (%) 51.4% 27.0% 34.9% 32.1%Book value per share 23,630 16,490 19,726 24,638Valuation (VND bn)PER (x) 19.3 8.6 10.2 6.6 P/B (x) 6.40 4.4 2.8 2.3 Dividend yield (%) 1.3% 1.6% 4.4% 6.6%





Manager information

VOF at 31 March 2012 held a stake in LAS valued at USD4.6 million

Hoa Phat Corporation (HPG)

Hoa Phat Group (HPG) is a leading industrial manufacturer in Vietnam, ranked first in steel manufacturing market share in 2011. Established in 1992 as a trading company, HPG has evolved into a holding group with seven subsidiaries and three affiliated companies, specializing in construction materials such as steel, steel pipe, furniture, refrigerators, construction and mining equipment, and industrial park operations. HPG has a well established nationwide distribution and sales network, with a strong platform for future product expansion and diversification. Due to the difficult business environment in 2011, the company’s net profit was down 8.4 percent year-over year from a reduction in gross margins and higher interest expense. HPG’s current capital expenditures include a steel complex with an annual capacity of 700,000 tons and plans for expanding operations into the mining and energy sector to mitigate the company’s rising utility and input costs. For FY2012, management projects net profit after tax of VND872 billion (USD41.5 million), accounting for the current high interest rate environment and expansion costs. As at 31 March 2012, HPG traded at VND23,100 per share, equivalent to a 2012 P/E of 9.0x and P/B of 1.0x.

VOF at 31 March 2012 held a stake in HPG valued at USD18.7 million

Lam Thao Fertilisers and Chemicals JSC (LAS)

Lam Thao Fertilizer is a leading NPK (Nitrogen, Phosphorus and Potassium) fertilizer producer in Vietnam with a dominant position in the NPK and superphosphate fertilizer sector. Annually, LAS produces 800,000 tons of NPK accounting for approximately 40 percent of domestic market share. The company has over 50 fertilizer SKUs branded under the Lam Thao registered trademark and boasts a strong distribution network. Following its privatization, Lam Thao has restructured itself from a state-owned company and improved efficiency throughout its operations. In FY 2011 net profit after tax was USD14.3 million, more than four times what the company earned in 2009, due to management efforts to restructure short-term debt and cut operating costs. LAS has set a target of USD14.3 million profit after tax for FY 2012, despite the current macroeconomic environment and rising material input costs. The company’s investment pipeline includes a new fused superphosphate and a sulfate ammonia factory to be built by 2015. LAS will spend an estimated USD100 million for these investments mostly financed by the company’s retained earnings and long-term loans at advantageous rates. As at 31 March 2012, LAS traded at VND 23,500 per share, a 2012 PE of 3.8x and P/B of 1.4x.


Profit and loss (VND bn) FY09A FY10A FY11A FY12ERevenue 8,244 14,492 18,092 18,200Gross profit 1,976 2,458 2,872 2,730

Gross margin 24.0% 17.0% 15.9% 15.0%

Net income 1,271 1,349 1,236 872

Net margin 15.4% 9.3% 6.8% 4.8%

EPS (adjusted) 3,999 4,244 3,889 2,535

DPS 1,200 1,200 - -

Balance sheet (VND bn)Total assets 10,243 14,903 17,524 20,000

Shareholders’ equity 4,898 6,398 7,413 8,000

ROE (%) 25.9% 21.1% 16.7% 11.0%

Book value per share 15,410 20,129 23,326 23,255

Valuation (VND bn)PER (x) 7.7 7.2 4.5 9.0

P/B (x) 2.0 1.5 0.8 1.0

Dividend yield (%) 5.5% 2.9% -


Profit and loss (VND bn) FY09A FY10A FY11A FY12ERevenue 3,366 3,609 4,056 4,100Gross profit 565 725 799 800Gross margin 16.7% 20.1% 19.7% 19.5%Net income 71 287 300 300Net margin 2.1% 8.0% 7.4% 7.3%EPS (adjusted) 1,314 5,341 5,555 5,555DPS 1,000 1,200 2,000 2,000Balance sheet (VND bn)Total assets 2,208 1,861 2,228 2,400Shareholders’ equity 471 720 875 900ROE (%) 15.0% 39.8% 34.2% 33.3%Book value per share 10,902 13,314 16,203 16,667Valuation (VND bn)PER (x) 17.8x 4.4x 4.2x 4.2xP/B (x) 2.3x 1.8x 1.4x 1.3xDividend yield (%) 4.0% 5.1% 8.5% 8.5%





Manager information

Khang Dien Housing Investment and Development Company (KDH)

Khang Dien Company (KDH) is one of the largest real estate developers in Ho Chi Minh City, with approximate 40ha land bank allocated over 11 projects in the rapidly growing Districts 2 and 9. The company specializes in the development of villas and townhouses, currently the strongest performing residential real estate sector in Vietnam.

Revenue and net profit for KDH declined significantly in FY 2011, compared to FY 2010, achieving only USD79.5 million and USD480,000. During the year, in an effort to reduce interest expenses caused by high interest rates, KDH divested its entire Goldora project to Indochina Land and a 70 percent stake in SpringLife Apartments in District 2 to CapitaLand. As a result, the company received USD28.8 million in total proceeds with gross profit of USD4.8 million, reducing debt to USD26.4 million at year’s end. The company is now focused on selling four projects: Villa Park, Mega, Tri Minh and Doan Nguyen. Revenue and net profit are projected at USD27.8 million and USD3.8 million accordingly for FY 2012.

Throughout the beginning of 2012, VOF has increased ownership in KDH from 14.9 percent to 20 percent, and is now the second largest shareholder.

As at 31 March 2012, KDH closed at VND 18,800 per share, at a 2012 PE of 11.1x and P/B of 1.1x.

VOF at 31 March 2012 held a stake in KDH valued at USD9.7 million

VOF at 31 March 2012 held a stake in the Movenpick Hanoi hotel valued at USD1.5 million

Financial highlights (*)Profit and loss (USD) FY09A FY10A FY11A FY12ERevenue 1.4 6.5 7.5 8.4Gross profit (0.2) 2.6 3.4 3.7Gross margin 45.3% 40.0% 45.3% 44.0%Net income (3.0) (0.7) 0.1 0.3Net margin (214.3%) (10.8%) 1.0% 3.6%EPS (adjusted) - - - -Balance sheet (VND bn)Total assets 19.2 16.6 15.3 N/AShareholders’ equity (8.4) (9.0) (8.9) N/AROE (%) N/A N/A N/A N/ABook value per share N/A N/A N/A -(*): Financial years are ended as at 30 June.


Profit and loss (VND bn) FY09A FY10A FY11A FY12ERevenue 145.9 774.1 404 597Gross profit 77.6 303.2 63.4 120.2Gross margin 53.2% 39.2% 15.7% 20.1%Net income 44.9 226.1 2.4 80.2Net margin 30.8% 29.2% 0.6% 13.4%EPS (adjusted) 1,380 4,890 230 1,800DPS - - - -Balance sheet (VND bn)Total assets 1,167 2,647 2,417 2,400Shareholders’ equity 332 439 439 482ROE (%) 13.5% 51.5% 0.6% 16.6%Book value per share 23,024 27,426 27,426 24,979Valuation (VND bn)PER (x) - 8.8x 83.9x 11.1xP/B (x) - 1.6x 0.7x 1.1xDividend yield (%) - - - -

Movenpick Hanoi

The original property was acquired by both VOF and VNL in 2008, fully renovated with 154 rooms over 11,000 sqm gross floor area and rebranded into the Movenpick, an international 5-star hotel, managed by a Swiss group. The hotel is located on Ly Thuong Kiet Boulevard, a 2,950 sqm prime plot within Hanoi’s CBD, surrounded by government offices, hospitals, hotels and the International Exhibition Centre. The site is also within walking distance to Hanoi’s Old Quarter.

The Movenpick Hanoi’s occupancy rate averaged approximately 73 percent throughout 2011, and generated USD7.5 million in revenue and USD3.4 million in gross operating profit for FY 2011, including USD1.0 million in income generated by the hotel’s electronic casino.

Management expects financial results to remain stable through FY 2012, with a target of USD8.4 million in revenue and USD3.7 million in gross profit.





Manager information

Valuation and NAV calculationThe accurate and fair valuation of assets held in fund portfolios is a central component of successful fund management. VOF follows international best practice whenever possible in its valuation process.

Relevant datesVOF’s financial year-end is 30 June. Audited annual results must be announced within six months of this date. Interim results at 31 December receive an auditor review and must be announced within three months of this date. VOF calculates its unaudited NAV monthly and this is normally announced within ten days of month-end. Update reports on the fund’s performance are issued on a monthly and quarterly basis, in addition to an annual report with the audited final results.

The methods used to value different assets:Listed equitiesThe value of listed securities is based on the last traded price of the security on the stock exchange where it trades, or if there is more than one stock exchange on which the security trades, that which is considered the principal stock exchange for that security.

OTC equitiesThe market price of OTC equities is determined based on a sample of closing prices obtained from a minimum of three leading securities companies in Vietnam. The price used is normally the average of the sample, with outlying prices removed to avoid bias.Private equitiesUnquoted securities will initially be valued at cost.

Revaluations of unquoted investments are conducted at 30 June annually in accordance with the guidelines issued by the British Investment Fund Association.

Real estate holdingsReal estate projects are initially valued at cost. Once an investment license is obtained, or by way of other arrangements VOF has a legal entitlement to an investment property, the investment property is revalued. Investment properties are revalued at least annually and may be revalued more frequently if the investment manager or valuation committee believes there has been a material change in the value of a property. The valuation process consists of obtaining two or more valuations for each property from independent third-party valuation companies. The valuations are reviewed by the valuation committee as the basis for the final valuation approved by the Board. At the end of each quarter, the manager also reviews all real estate investments for possible impairment based on internal calculations. If there is evidence of impairment an independent valuation will be obtained to assess the need for any adjustment in the value of the property.

All other assets and liabilities are recorded at their respective fair values or cost, as required by the International Financial Reporting Standards and as set out in the Notes to the Consolidated Financial Statements as at 31 December 2011.

More information on valuation is available on the Investing policy page of the VOF website: VOF Investing policy.

Audit and Valuation committeesVOF has both an audit and valuation committee composed of independent non-executive members of the board of directors of the fund, and chaired by an independent director. The committees meet at least quarterly.

VOF Audit CommitteeMichael G. Gray (Chairman)Martin Glynn William Vanderfelt

VOF Valuation CommitteeMartin Glynn (Chairman)William VanderfeltMichael G. Gray

The manager update section provides investors with information on the policies and practices of VinaCapital Investment Management Ltd (VCIM), as well as updates on VinaCapital relevant to the performance of its investment funds.

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Manager information

Historical financial informationYears ended 30 June 2005 2006 2007 2008 2009 2010 2011

Statement of Income (USD’000)

Total income from ordinary activities 4,393 111,529 360,527 (381,067) 29,075 134,263 (8,420)

Total expenses from ordinary activities (1,522) (39,958) (95,164) (34,465) (25,869) (29,047) (27,214)

Operating profit before income tax 2,871 75,572 265,363 (415,532) 3,206 105,216 (35,634)

Income tax expense - - - (125) (108) 211 545

Profit for the year 2,871 75,572 265,363 (415,657) 3,098 105,005 (36,179)

Minority interests - 523 1,196 1,347 (3,684) 311 106

Profit attributable to ordinary equity holders 2,871 75,049 264,167 (417,004) 6,782 104,694 (36,285)

Statement of financial position (USD’000)

Total assets 96,943 277,942 924,785 723,614 718,023 793,820 764,603

Total liabilities 702 33,012 103,121 54,727 36,111 11,319 12,697

Net assets 96,241 244,930 821,664 668,877 681,912 782,501 751,906

Share information

Basic earnings per share (cents per share) 8 76 134 (141) 2 32 (11)

Share price as 30 June 1.58 2.32 3.41 2.16 1.43 1.40 1.57

Ordinary share capital (thousand shares) 75,155 122,657 250,648 324,610 324,610 324,610 324,610

Market capitalization at 30 June (USD’000) 118,745 283,951 853,456 699,535 462,569 455,428 509,313

Net asset value per ordinary share (USD) 1.28 2.00 3.28 2.06 2.10 2.41 2.32

Ratio

Return on average ordinary share holder’s funds 7.4% 58.2% 72.8% -67.8% 1.1% 17.0% -6.0%

Dividend pay out as % avg. NAV 0.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Investment management fees/avg. NAV 7.6% 12.8% 15.6% 2.9% 2.0% 2.0% 2.0%

Fund summaryVinaCapital Vietnam Opportunity Fund Ltd (“Vietnam Opportunity Fund” or “VOF”) is a closed-end fund trading on the AIM Market of the London Stock Exchange. Download the VOF factsheet at www.vinacapital.com Fund launch30 September 2003Term of fundFive years with continuation, subject to shareholder vote for liquidationFund domicileCayman IslandsLegal formExempted company limited by sharesStructureSingle class of ordinary shares trading on the AIM market of the London Stock Exchange plc.AuditorPricewaterhouseCoopers (Hong Kong)Nominated adviser (Nomad)Grant Thornton Corporate FinanceCustodian and AdministratorHSBC TrusteeBrokersLCF Edmond de Rothschild Securities (Bloomberg: LCFR)Numis Securities (Bloomberg: NUMI)LawyersLawrence Graham (UK)Maples and Calder (Cayman Islands)Management and performance feeManagement fee of 2 percent of NAV. Performance fee of 20 percent of total NAV increase after achieving the higher of an 8 percent compound annual return and the high watermarkInvestment manager: VinaCapital Investment Management LtdInvestment policy: Medium to long term capital gains with some recurring income and short term profit taking. Primary investment focus areas are: Privately negotiated equity investments; Undervalued/distressed assets; Privatisation of state-owned enterprises; Real estate; and Private placements into listed and OTC-traded companies.Investment focus by geography: Greater Indochina comprising: Vietnam (minimum of 70 percent), Cambodia, Laos, and southern China.

http://www.vinacapital.com/





Manager information

VinaCapital

VinaCapital Investment Management Ltd (VCIM) is the BVI-registered investment manager of VOF.

Don Lam Chief Executive OfficerBrook Taylor Chief Operating OfficerAndy Ho Managing Director, Head of InvestmentNguyen Viet Cuong Deputy Managing Director, Capital marketsDang P. Minh Loan Deputy Managing Director, Private equity

ContactDavid Dropsey Investor Relations/Communications

[email protected]+848-3821-9930www.vinacapital.com

Vietnam Opportunity Fund (VOF)

Brokers LCF Edmond de Rothschild Securities+44 (0)20 7845 5960 or [email protected]

Numis Securities+ 44 (0)20 7260 1327, www.numiscorp.com

Nominated adviser Grant Thornton Corporate FinanceAuditor PricewaterhouseCoopers (Hong Kong)Internal auditor KPMG (Vietnam)Custodian and Admin HSBC Trustee

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 Vietnam Opportunity Fund Limited, VinaLand Limited or Vietnam Infrastructure Limited (each a “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 Limited 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 Limited.

VOF Board of DirectorsVinaCapital Vietnam Opportunity Fund Ltd (VOF) is led by a Board of Directors composed of a majority of independent non-executive directors.

William Vanderfelt Chairman (Independent)Michael G. Gray Director (Independent)Martin Glynn Director (Independent)Don Lam Director

http://www.vinacapital.com/

mailto:[email protected]

http://www.numiscorp.com/

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