Funds
Fund Performance
At a glance
- VEIL declined 0.4% in February, underperforming its reference Vietnam Index by 0.9%, largely due to profit-taking in key holdings such as FPT and MWG.
- Strong performances in the property, steel, and brokerage sectors cushioned some of the impact.
- VEIL completed its participation in the private placement of BIDV for $89.6mn.
Performance
Fund Commentary
February saw strong profit-taking in some of VEIL’s top holdings, most heavily in FPT and MWG. After large gains in 2024, they experienced foreign net outflows in February of $52mn and $25mn, respectively, leading to declines of 10.2% and 4.8%. As part of our routine rebalancing activities in 2024, we had selectively taken profit in FPT and MWG in 2H24. With no change in fundamentals, these names remain key long-term holdings.
In contrast, several of our portfolio holdings outperformed as investors responded positively to government-led reforms. Our brokerage positions, MBS and VCI – both acquired through private placements in mid-2024 and already delivering strong returns – gained momentum on expectations of the potential KRX trading system upgrade in 2025. A modernised trading platform should enhance market liquidity and brokerage revenues, reinforcing our conviction in these holdings. The materials sector also saw a strong rebound, with HPG and HSG rallying, following the MoIT’s 28% anti-dumping tariff on Chinese steel imports. Our property holdings DXG and PDR rose as government efforts to resolve regulatory issues gained traction. This progress is central to our property strategy, and we expect further easing to unlock additional growth potential.
VEIL completed a major investment in BID in February, purchasing $89.6mn in a private placement as an anchor investor. BID is one of Vietnam’s largest state-owned banks, with an $11bn market cap, and has successfully restructured to improve efficiency and profitability. Traditionally focused on corporate lending, BID is now expanding into retail banking, a shift that we believe will enhance earnings growth and drive long-term value creation. This investment aligns with our strategy of backing banks undergoing structural improvements with strong upside potential.
Stock in Focus: Becamex IDC (BCM)
BCM is one of Vietnam’s leading industrial park (IP) and urban area (UA) developers, playing a critical role in the country’s industrialisation and urban expansion. Its investment appeal lies in its dominant IP market position with a 2,000ha land bank and strategic partnerships, including IP developer VSIP (a JV with Sembcorp), and a 30% stake in BW Industrial. Established with Warburg Pincus, BW is Vietnam’s largest logistics and industrial developer, which operates 995ha across 50+ projects. BCM’s expansion pipeline includes an additional 1,500ha of IP land, while its involvement in the Binh Duong New City project is set to drive UA land sales. BCM’s business model is built on its ability to monetise its land bank through IP and UA land sales, accounting for 85% of 2023 gross profit. The company maintains a solid financial position, with a net debt-to-equity ratio of 1.0x as of 4Q24. BCM has raised its 2025 earnings guidance by 35% to $150mn (+90% YoY), with real estate expected to contribute 75% of total revenue. The company has already secured 60% of its residential revenue target, while IP sales are projected at 350ha.
Beyond organic growth, earnings from BCM’s partnerships are forecast to rise, with VSIP contributing $75mn (+20% YoY) and BW generating $12mn, marking a turnaround from zero in 2024. To support growth, BCM plans a public offering of 300 million shares in 2Q25 for debt restructuring and further IP investments. The upcoming capital raise serves as a major catalyst, with its stock already gaining 6.2% MoM in February 2025. As Vietnam continues to attract FDI and expand its manufacturing base, BCM is set to capture the growing demand for industrial infrastructure.
