VinaCapital Vietnam Opportunity Fund Limited

Good morning and welcome to the Vena Capital Vietnam Opportunity Fund Limited investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and present. Before we begin, I would like to submit the following poll. I would now like to hand you over to Business Development Manager, Tom Ha. Good afternoon to you.

Good afternoon from Ho Chi Minh City and welcome to Vina Capital Vietnam Opportunity Fund Annual Results Webinar for the fiscal year ended June 30th, 2026. My name is Tom Ha, Business Development Manager at Vina Capital. Thank you all for joining us today and thanks again to IMC for hosting us again on your platform. When investing in a frontier or emerging markets like Vietnam, the story always starts with the macroeconomy. So, to begin with, today we'll have Michael Coccolari, our chief economist, to provide you an update on the macro situation in Vietnam, followed by Khang Vu, the portfolio manager, who will give you a walkthrough on the results, as well as the repositioning that has happened over the past 12 months, and finally, how is the portfolio positioned to benefit for the next 12 to 24, maybe in three years. And finally, at the end, we'll round off with a Q&A session where Mike, Tom, and myself will sit here and answer your questions. So please type in your questions while we have our prepared remarks. Thank you. So now, please welcome Michael Coccolari.

Okay, Tom, thank you. Okay. I'm going to address the elephant in the room right up front. The economy is really strong this year in Vietnam. The government's reporting 9% GDP growth. Earnings growth could be around 30 this year. And despite that, the stock market is basically flat. So what's going on? Well, interest rates in Vietnam, and we look at the 12-month deposit rates. That's kind of the most relevant when you want to talk about the stock market. Interest rates are around 8-9%. You can even get a 12-month deposit of 10% at some reputable banks right now. I put this dashed line on the chart at the 7% level because typically when bank deposit rates get over 7% in Vietnam, this is when people tend to take their money out of the stock market and put it into the bank. And the analogous number for the... Real estate market is around 13%. So mortgage rates are now sort of 13 to 15% for most mortgages. And that's the level at which the housing market starts to roll over. House prices are down, call it around 20% from the peak after having had a huge run-up. This, in a nutshell, really explains why, despite this really strong economy, that the stock market is kind of going sideways. Now, The interesting or ironic point about this is that what's driving the interest rates up, it's not really an inflation story. Okay, there's a little bit of the oil, you know, story. Inflation in Vietnam is called around 5% year on year. But really the main factor that's driving the rates up is the really strong economy and also the fact that the infrastructure development in Vietnam has really surged this year. It's up around 50, 5, 0%. The main factors that are supporting the GDP growth this year, first of all, the infrastructure spending I just mentioned, and also we're having really strong exports of high-tech products, particularly to the U.S. And that also influences the interest rates because you figure companies that are really profiting like crazy, selling the high-tech products to the U.S., they can afford to pay higher interest rates, basically. So you have a confluence of factors coming together that are driving the rates higher. And then, you know, as I said, ironically, this is kind of the main factor that is weighing on the stock market. Here's an illustration of what's going on with this high-tech exports that I just mentioned, computer exports, which are not from a small base. This is around 30% of GDP, Vietnam computer and electronics exports, up 60, 60%. The good news in this is we have enormous amount of FDI, planned FDI, coming into the country. A lot of that is going into the high-tech field. So it's all related to this surge in exports, high-tech exports to the U.S. The other thing that's going on, I mentioned, is a surge of infrastructure spending. The government right now is spending around 6% of GDP on infrastructure. I had that on the previous slide. And the target is to get up to 10% of GDP on infrastructure spending. To put that 10% number in context, that's what China and Japan were doing when they were really going intense with infrastructure, building roads, had the bullet train in Japan's case, etc. So that's a really big number, and that kind of leads into the next point, which is how are they going to get all this money to do all these investments? Because in addition to infrastructure investment, there's a U.S. dollar borrowing to come into Vietnam. And we know from studying how that played out in other countries in the past that once the government allows like a lot of dollars to come into the country, you get a boom. You get a boom that typically lasts kind of five to seven years. And that leads into the next point that I want to talk about, which is that there's a confluence of several different factors that are all lining up at the same time that are going to result in really strong economic growth in Vietnam over the next five plus years. So the first one that I just mentioned is this U.S. dollar borrowing phenomenon. Now, when I mention that, what may come into some people's minds is, oh, in 1997, you know, Thailand experienced problems because they had borrowed a lot of dollars and they built golf courses and things like that. Well, don't forget that Korea also borrowed a lot of dollars at around the same time, and Korea used that money wisely to build their industrial base and factories. So our expectation is that that's going to be how it will play out in Vietnam. They'll use all these borrowed dollars wisely. And irrespective of how it's going to end, the point I really want to emphasize right now is that The pattern is really clear and it's unambiguous. When a country embarks on borrowing, so you have all these new dollars coming into the country. We still have the FDI coming every year, but this is a new surge of money coming in that gets spent and invested here. So that's, you know, you always get a boom when that happens. So that's one of these three forces that are all lining up. The other force that's there, which I often talk about, is the demographics, which is kind of like a 10-year type story. and industrialization, which has got like another 15 years to run. So, okay, so I just basically talked a little bit about the borrowing, the US dollar borrowing. Let me just talk a little bit about these other two so that you can see all these three things that are all lining up at the same time. So for the demographics, Vietnam has, Vietnam and India are probably the two countries in the world that, big countries that kind of matter, that have the most positive demographics. Vietnam's got about another 10 years of very positive demographics. I use a system that comes from out of the University of Pennsylvania, which is we look at within a person's life cycle when they tend to spend the most money, the highest earnings, highest spending, and that tends to be around the 45 to 50-year-old type level. So if you take that number of super spenders in the country and you just add it up, it's a really reliable indicator. This number peaked, for example, in 1990 in Japan. So it really accurately called the top of the Japanese bubble, peaked around 2015 in both South Korea and China. So it's a really accurate indicator. So we've got another 10 years to go of really positive demographics. And on the industrialization story, I first want to remind you that Vietnam is doing the East Asian Development Model. And this is the only model that kind of guaranteed, you know, it's worked over and over in Japan and Taiwan, somewhat in China. They did a kind of a version of this. And basically, the East Asian Development Model, you produce products that you export. The point I want to make here is that right now in Vietnam, manufacturing is 25% of GDP. And in all the other Asian tigers, manufacturing peaked at over 33% of GDP. And so that combined with analyzing and studying how industrialization played out in other comparable countries leads us to be very clear that Vietnam has got another 15 years to go for industrialization. Part of the East Asian development model approach is that you want to produce more and more complicated products over time so that you have more and more value add. According to Harvard University, Vietnam is the country in the world which improved its ability to make complicated products the most over the last 10 years. So we're on the right track with this East Asian development model. And now I'm going to introduce a new concept that a lot of people are talking about. We just had our annual investor conference and Russell Nathier talked about an idea that he calls national capitalism. Some other people call it de-globalization. And the idea here is that the world is fragmenting into these different blocks. You know, you've got the U.S.-French Roaring Block of Countries. You've got the China-BRICS Block of Countries. Arguably, Europe and maybe even Canada are kind of forming their own block of countries. And the key point for Vietnam is that Vietnam sits in the middle of these blocks of countries. Vietnam is what the IMF calls a connector country. So the IMF published a very famous report last year and they talked about Vietnam, Mexico, Poland being these connector countries that can trade in between these blocks of countries. They're also what Russell Napier would call unaligned countries. Mark Carney gave a very famous speech earlier this year at Davos and he talked about the idea of middle powers. These are all kind of related ideas The key point here is that since Vietnam is friends with everyone, we have this bamboo diplomacy, it's safe to buy things from Vietnam. And here's a really good concrete example is that the NHS does not want to buy even refrigerators that are made in China. That was a policy of the NHS already for a bit, and then you may know that recently in the news there was an incident, coincidentally, There was an incident in France where many refrigerators were hacked. Refrigerators are now on the IoT, Internet of Things. And so the UK NHS, they don't trust to buy refrigerators from China. They want to buy it from an underlying neutral source. And it makes absolutely no sense to reshore the production of things like refrigerators back to the UK and back to the developed world. You can see on the slide here it would cost double what it would cost to produce here in Vietnam, for example. So there's that whole bracket of what I call middle complexity products that are going to get made here in Vietnam if the customer does not want to buy it from China or even from the U.S. There was a story recently that Norway didn't want to buy ships that were made in the U.S., for example. So an unwide country able to make middle complexity products. So that's going to be what propels Vietnam's industrialization story for the next 15 years. I will tell you at this point The topic of tariffs is kind of still in the news. There's still some negotiations back and forth about that. This idea of Vietnam being a connector country means that it's really not in the US interest to hit Vietnam with harsh tariffs because of this role of being in between. This issue came up a few months ago with the publication of this report from Peter Navarro, who is an official in the Trump administration. If you read this report very carefully, you will see that it was a little bit strange because the title of the report was like, you know, it's a scam. And on the first page, they talk about Vietnam is working us off and we should put more tariffs on Vietnam, blah, blah, blah. But actually, if you really go through and read the report carefully, which we have to because it impacts Vietnam, You find out that most of the report is kind of arguing against the idea that Vietnam is doing anything egregious, and it kind of confirms our belief that this is not going to be a big issue, because it's not in the interest of the U.S. to put big tariffs on Vietnam. I'm going to hop now to another topic to finish out my presentation. So I wanted to present, you know, first of all, give an explanation of this kind of A Quirky Situation with the Stock Market both for optimizing the operations of Vietnamese companies and also as an opportunity to be able to do AI development here. You could call it outsourcing. It's not really outsourcing. It's more complicated. People use the terminology FTE for deployed engineers, et cetera. But the point I want to make here is Vietnamese have a unique combination of skills. They're good at math. They're good at computers. Vietnam is number five in the International Mathematics Olympics. Actually, if you scale it by the population size, it's kind of like number two per capita. So really, really strong STEM ability here. And so I always like to get that point in because in addition to those three forces lining up, there's going to be a lot of positive things that happen here with AI that are going to give a lot of investment opportunities and that are going to boost the economy. Okay, so that's everything that I wanted to talk about. And now I'm going to turn it over to KD, who's going to discuss more specifics about what we're doing with the portfolio and how all that's working. Okay, thank you. Thanks, Mike.