Vietnam Opportunity Fund Limited Annual Report 2011

Vietnam Opportunity Fund Limited Annual Report 2011 Contents Section 1 Introduction 1.1 Financial highlights 1.2 Performance highlights 1.3 Chairman’s statement Section 2 Manager’s report 2.1 Investment environment 2.2 Portfolio performance 2.3 Top holdings 2.4 Management team VinaCapital Vietnam Opportunity Fund Limited (VOF) Annual Report 2011 3 4 6 9 11 16 22 Section 3 Financial statements and reports 3.1 Board of Directors 26 3.2 Report of the Board of Directors 28 3.3 Governance report 30 3.4 Independent Auditors’ report 35 3.5 Consolidated financial statements and notes 36 Section 4 Additional information 4.1 Investing policy 4.2 Historical financial information 4.3 Overview and details Contents Highlights 2 VOF Annual Report 2011 85 89 91 Chairman’s statement Manager’s report Report of the Board Financial statements Fund information Financial highlights VOF in FY2011 saw stable performance due to private equity divestments, via trade sales, at prices above carrying value. VOF turned the challenging macro conditions Performance summary NAV per share Change on previous year Share price Change on previous year Discount to NAV (at 30/6) FY2011 FY2010 2.32 2.41 (3.9%) 14.8% 1.57 1.40 12.1% (2.1%) 32.3% 42.9% FY2009 2.10 1.9% 1.43 (30.6%) 31.9% in Vietnam to its advantage, entering new investments at good valuations, and divesting several key holdings to overseas strategic buyers attracted by Vietnam’s long-term potential. Net asset value at 30 June 2011 VOF at the end of FY2011 held a total cash position of USD63 million, which will allow the fund to aggressively pursue private equity deals at good valuations, while leaving cash available for distribution to shareholders. NAV per share at 30 June 2011 USD752 million USD2.32 Contents Highlights Chairman’s statement Manager’s report Report of the Board Financial statements Fund information VOF Annual Report 2011 3 Performance highlights VOF in FY2011 made significant progress towards its strategic objectives. The overall goal is to increase the NAV and close the share price discount. In FY2011, the Manager focused on trade sales and acquiring high-growth private equity assets in key sectors. Divestments Consumer goods Hanoi Liquor JSC (Halico) is Vietnam’s leading Vodka producer and distributor. VOF sold a 23.6 percent stake in Halico to Diageo plc. Vinacafe is Vietnam’s leading instant coffee producer, focused on robusta beans. VOF sold its stake in Vinacafe to another investment fund. Education International School of Ho Chi Minh City is among the leading international school’s in Vietnam. VOF sold the majority of its stake in ISHCMC to Cognita, one of the world’s top private school operators. FY2011 divestment summary Total proceeds from PE/OTC divestments in FY2011: USD77m Total weighted average IRR: 48.1% Total weighted average multiple: 3.7x In addition, after the financial year ended, VOF divested a majority of its stake in Hoan My Hospital Group. Contents Highlights Chairman’s statement Manager’s report Report of the Board Financial statements Fund information 4 VOF Annual Report 2011 Performance highlights New investments VOF’s private equity investments continued to focus on the consumer goods sector. This sector is enjoying high growth and attracting overseas strategic investors. Consumer goods Yen Viet JSC is Vietnam’s top producer and distributor of bird’s nest nutritional products, a high-cost health supplement with a huge growth market, particularly in China. VOF holds a 20.0 percent equity stake in Yen Viet. Thai Hoa Coffee JSC is Vietnam’s third largest coffee producer and the market leader in the high-value arabica sector. VOF holds a 10.0 percent equity stake in Thai Hoa Coffee. Close the share price discount VOF made some progress in closing the share price discount during FY2011. However, VOF’s share price is correlated to the performance of the VN Index, which declined 21 percent in USD terms over the year ended 30 June 2011. In addition, the European debt crisis had a negative impact on equities markets around the world. Share price discount 30 June 2011: 32.3% 30 June 2010: 41.9% VOF did not make a distribution payment in FY2011, but held an EGM in October 2011 that added a permanent share buyback mechanism to the fund’s Charter. Buybacks subsequently commenced in November 2011. VOF during FY2011 also increased its stake in agro-chemicals firm An Giang Plant Protection JSC, and acquired a small stake in Binh Dien Fertiliser. Contents Highlights Chairman’s statement Manager’s report Report of the Board Financial statements Fund information VOF Annual Report 2011 5 ... - tailieumienphi.vn