View
129
Download
1
Category
Tags:
Preview:
DESCRIPTION
Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer debate on ESG and Impact Investing trends, private equity, portfolio strategy, food production, emerging markets, sustainable energy or philanthropy investing.
Citation preview
ESG Investing in Vietnam
Jean-Christophe GanzChairman – VietNam Holding Asset Management
TBLI Conference, Zurich
15 November 2013
Value investment approach
Long-term growth megatrends
Portfolio of mid-cap leaders with superior EPS growth
Dynamic portfolio management
Seven year performance track record
Experienced local team
2
VietNam Holding (VNH)
Sources: Bloomberg, VNHAM. 8 November 2013.
Investment
Themes Domestic Consumption / Agri-Business
Class Listed / OTC Equity
Single Investment 10% max.
Single Industry 30% max.
Portfolio Companies 25
Listing
IPO June 2006
London (AIM) VNH:LN
Frankfurt (Entry Standard) VH1:GR
Market Capitalization USD 76.3 M
Net Asset Value USD 106.2 M
Share Price Discount to NAV 28.2%
Vietnam Country Profile
Sources: IMF, GSO, HSBC, EIU, CIA, US Census Bureau / December 2012.
Population 91.5 million - 13th largest
Transition economy - 10+ year lag to China
Demographic dividend - Median age 27.8 yrs
Labor education - Literacy 94%
Resources - Minerals, Oil & Gas, Tourism etc.
Homogenous population - 85.7% ethnic Kinh
Trade stability - ASEAN+3
Maturing stock market - Since 2000
Located in the center of East Asia and South-East Asia, Vietnam is one of the world’s fastest growing markets
3
The ESG Investment Challenge in Vietnam
No ESG rating agency covering Vietnamese equities
Most fund managers are local players with limited ESG sensitivity
Environmental damage in Vietnam still relatively low, yet increasing quickly
Corporate ESG awareness, investor & consumer pressure growing but still scant
Environmental regulation slowly being built
Poor monitoring and limited enforcement
No compelling disclosure standards
Bottom-up environmental awareness building
Benefit of hindsight (China experience)
4
The VNH Approach
Integrate ESG criteria in investment analysis
Combine ESG ranking with focus on financial return
Actively promote sustainability and good governance practices as part of our core values
Expand the VNH Forum as an ESG commitment platform with investees and government
Pursue and expand a tangible social commitment through the VNH Foundation philanthropy
Assumption: ESG sensitive investees show better long term performance
5
Integrating ESG
6
ESG Analysis
Financial Analysis
Investment Universe 600 Listed / 1400 OTC
RequirementsMarket Cap / Liquidity / Governance
Materiality
Investment SelectionIndustry Allocation
VNH PortfolioReview / Rebalance
Engagement
Sustainable Investment
Sound enterprise management
Long-term earnings
Risk-adjusted returns
Engagement
7
Investee Engagement
Engage senior management
Private bilateral dialogue
ESG and financial key issues
Board member involvement
Network Leverage
Knowledge exchange
Resource pooling with peers
Coordinated voting & action
Advisory Council access
VNH Forum
Global best practice in local context
Partnership with government
Audience of senior executives
Public presence through local media
Portfolio Composition
8Sources: Bloomberg, VNHAM / 31 October 2013.
1 Vinamilk 8.50%
2 Hau Giang Pharma 7.88%
3 AnGiang Plant Protection 7.65%
4 Traphaco 7.21%
5 Petrovietnam Drilling 6.56%
6 Binh Minh Plastic 6.46%
7 Hung Vuong Corp. 5.78%
8 Viconship 4.73%
9 Hoa Phat Group 4.34%
10 Thien Long Group Corp 4.08%
Industry Allocation Top 10 Holdings
20%
18%
17%8%7%
7%
6%4%
4% 4% 3% 2% 1% 0%Health CareConstruction & MaterialsFood & BeverageChemicalsOil & GasBasic ResourcesIndustrial Goods & ServicesPersonal & Household GoodsAutomobiles & PartsTelecommunicationsRetailBanksTravel & LeisureReal Estate
Outperformance
9Sources: Bloomberg, LCF Rothschild / 31 October 2013.
-80%
-60%
-40%
-20%
0%
20% Vietnam Hold-ing
PXP Vietnam
Dragon's VEIL
VN Equity Hold-ing
DWS Vietnam
VNI USD ad-justed
Performance vs. VNI USD adjusted:
41.5%
18.2%
14.4%
5.7%
4.1%
NAV Performance vs. Peer Group and Vietnam Index (VNI)
VNH Profile
Differentiators
Local sustainability analysis
ESG value & risk management
Active ownership with investees and regulators
Goals
Profitability and reputation of investee companies
Above average returns under consideration of ESG factors
10
Generating high risk-adjusted returns by combining rigorous financial analysis with interactive sustainability research
Contact
11
Vietnam Holding Asset Management Ltd.
London AIM VNH LN
Frankfurt Entry Standard VH1:GR
Bloomberg VNH LN Equity
Reuters VNHq.L
ISIN KYG9361X1043
www.vietnamholding.com | info@vnham.com
Ho Chi Minh City
1202 Fideco Tower81-85 Ham Nghi, Q1Vietnam +848 3823 0465
Zurich
Gartenstrasse 19CH - 8002Switzerland+41 43 500 2810
ESG Analysis & Engagement
12
• Financial & ESG Category
• Dimension and Relevance
Research
• Issue within Sector Context
• Business Impact
Investment Analyst • Prioritize Issues
• Management Recommendation
Investment Team
• Performance Indicators
• Management Milestones
Valuation & Engagement
1. Identify material ESG dimension
2. Analyze and assess business impact
3. Set issue priority and agree on management recommendation
4. Define performance indicators and target management milestones
5. Agree on engagement schedule
6. Monitor performance progress
The Vietnam Holding (VNH) approach:
Appendix
Recommended