VEIL Monthly Report – August 2025

Performance

Fund Commentary

VEIL rose 14.6% in August, outperforming the VNI’s 11.5% by 3.1%. This marks the second consecutive month of strong gains, largely thanks to the portfolio’s prepositioning in reform-driven sectors where policy catalysts are most visible.

Banks were the largest driver of performance in August. VPB (+34.9%) stood out on accelerating credit growth, improving asset quality, and stronger-than-expected Q2 results, while also attracting attention ahead of the potential IPO of VP Bank Securities by year-end. MBB (+33.9%) also surged, supported by a 32% stock dividend and a marked improvement in asset quality. The bank aggressively booked provisions in Q2, reducing NPLs (particularly Group 2 loans) while lifting LLR coverage, indicating a cleaner balance sheet and stronger outlook for H2 2025.

This underpinned a sharp rerating in valuation, with P/B rising from 1.3x to 1.8x in just one month — a notable rebound that signals renewed investor confidence in Vietnam’s banking sector. TCB (+15.8%) added further support, reflecting its deep corporate banking franchise, improving fee income momentum, and the recovery in real estate lending demand. Alongside other leading financial names, these core holdings reinforced the fund’s conviction in banks as the key beneficiaries of Vietnam’s ongoing credit expansion, stabilising macro conditions, and reform-driven financial deepening that continue to attract both domestic and foreign capital inflows.

The second largest contributor was residential real estate, adding 3.1%. Our strong conviction in KDH (+32.5%) and DXG (+14.5%) led gains as sentiment improved on the back of strong absorption rates at their new project launches such as DXG’s Prive ($415mn) and KDH’s flagship Gladia ($385mn). Brokerages (+1.7%) continued to benefit from record high daily trading value on HSX, which reached an average of $1.9bn in August, while margin lending balances reached all-time highs. Our largest broker position SSI (+22.7%) was the key beneficiary, well placed to capture both retail activity, prospective passive inflows tied to a potential FTSE EM upgrade, and possible future crypto products.

Stock in Focus: Khang Dien House (KDH)

Founded in 2001, Khang Dien House (KDH) has grown into one of Ho Chi Minh City’s leading developers of landed housing, with more than 20,000 units delivered and a strategic land bank of over 520 hectares. Concentrated in prime HCMC locations, KDH enjoys a competitive edge in a supply-constrained market. A notable strength is its strong legal track record, which allows timely launches and handovers and makes it one of the few local developers able to form joint ventures with foreign partners such as Keppel Land.

In 1H25, KDH reported revenue of $67mn (+80% YoY) but NPAT declined 6–9% YoY to ~$13mn. The main near-term catalyst is the Gladia project, an 11.8ha JV with Keppel comprising 226 low-rise and ~600 high-rise units. Construction of the low-rise section is complete, and sales are scheduled to begin in September, with management targeting half of the units to be sold and handed over within 2025.

Beyond 2025, KDH has a visible pipeline. The 16.4ha Solina project is planned for 2027, while the 110ha Le Minh Xuan industrial park expansion begins infrastructure development this year, with leasing from 2027. The long-term anchor is the 329ha Tan Tao township, where land clearance is over 85% complete. Supported by a solid balance sheet, proven execution, and prime projects, KDH is well placed to capture both residential demand and industrial park growth.