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Thien Viet Growth Fund - TVFG Thien Viet Asset Management March 2016 Summary I. Investment Opportunities in Vietnam II. Key Risks from Investment in Vietnam III. Potential Sectors for Investment IV. The Company – Thien Viet Asset Management – TVAM V. The Fund – Thien Viet Assess Management Growth Fund – TVAMGF 2 I. Investment Opportunities in Vietnam 1. Brighter outlook of the economy 2. Other less attractive investment options 3. 4. § Gold § Foreign exchange § Real estate § Bank deposits Other opportunities in the stock market § Expansion on foreign ownership limit § Multiple free trades agreement Attrative valuation of Vietnam market versus regional peers 3 I.1. Brighter outlook of the economy GDP Growth Acceleration 8.0% • For the past three years (2012 – 2014), the government has shifted its policies from aiming at achieving high rate of economic growth, which caused stocked inflation, to aiming at stabilizing the economy through monetary and fiscal control GDP growth 7.0% 6.7% • Structural reform has led Vietnam to grow on a stable economy, backed by subdue inflation, high forex reserves, and solid economic stance 6.0% 5.0% 2016 F 2015 2014 2013 2012 2011 2010 2009 2008 2007 4.0% • 2015 marks the tremendous transformation with GDP growth expanding by 6.68%, the highest in eight consecutive years. The faster than anticipated growth in the economy was mainly driven by the industry and construction sectors, contributing nearly half of GDP’s growth, followed by the services sector, contributing nearly 30% of the growth. • In 2016, the Government expects to have the same GDP growth rate of 6.7% - 6.8% in 2015. Source: GSO, Reuters, Custom Office 4 I.1. Brighter outlook of the economy Vietnam’s GDP growth is higher than other countries 6% • Compared to those main regional peers, Vietnam reveals its development success with highest 5-year average GDP growth. 5-year average GDP growth 7% 5.9% • While the world oil prices are falling rapidly and the international financial markets are becoming more unstable, Vietnam’s economy grew at its fastest pace in eight years, shaking off regional economic worries with strong export growth, robust industrial activity and a record foreign inflow of USD24,1 billion. 5% 4% 3% 2% • Massive amount of awaiting Free Trade Agreements (FTAs) will turn Vietnam into one of the most attractive production hubs in the region. 1% 0% Vietnam Philippines Indonesia Malaysia Thailand Vietnam’ economic growth in 2015 is the fastest among six major Southeast Asian countries Source: GSO, Reuters, Custom Office, Asian Development Bank 5 I.1. Brighter outlook of the economy Export – the key to economic growth USD bn • Exports revenue takes more than 83% of GDP in recent years with the annual CAGR (Compound Annual Growth Rate) reaches 17%/year – highest rate in the region. Exports 160 120 • In the last 5 years (2010-2014), Vietnam's exports have doubled as competitive minimum wage and low costs of utilities boosted foreign direct investment (FDI). Currently, Vietnam’s export growth rate is the highest among other surrounding nations. 80 40 Source: GSO, Reuters, Custom Office 2016 F 2015 2014 2013 2012 2011 2010 2009 2008 2007 - • The main catalyst for expansive export has been the nation’s movement to more open market economy in line with WTO commitments and global integration brought by FTAs. Foreign invested enterprises dominated trade activities by contributing 68% to total exports turnover. • Going forward, we believe that strong inflows of foreign investment of massive FTAs ahead will boost exports growth enormously. 6 I.1. Brighter outlook of the economy Inflation within control 25.0% • On its road to economic reform, Vietnam encountered serious problems of soaring inflation in 2008 and 2011 with CPI of 23% and 19% accordingly, mainly comes from the past fiscal stimulus packages to cope with global crisis CPI 20.0% 15.0% • In any difficult situations, the Government’s swift shift in policy control will help the country to ride out these vulnerable periods and bring the macro economy under control. 10.0% Source: GSO, Reuters, Custom Office 2015 2014 2013 2012 2011 2010 2009 2008 2007 0.0% 2016 F 3-5% 5.0% • At present, the Government’s inflation control policies have generated very impressive results with CPI sets at 0.63% in 2015, the lowest rate in 15 years • The government aims to keep inflation constrained below 5%. This would create macro-economic stability and favorable condition to attract greater FDI inflows in the future. 7 I.1. Brighter outlook of the economy Massive FDI inflow 80 FDI 70 60 50 FDI disbursed (USD billion) FDI registered (USD billion) 40 30 20 10 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: GSO, Reuters, Custom Office • FDI disbursement hit record high of USD14.5 billion in 2015, increasing by 17.4% yoy • FDI registered in Vietnam also saw a 12.5% yoy increase to reach USD22.76 billion in 2015. • The manufacturing and processing sector attracted high FDI inflows at USD15.2 billion, accounting for approximately 67% of the nation's FDI. • Vietnam has attracted FDI enterprises from the world’s leading firms such as Intel, Samsung, Microsoft, Formosa. These projects are being carried out by giant corporations will turn Vietnam into one of the largest production bases in the world. 8 I.2. Other less attarctive investment options Gold is in downtrend for four consecutive years 2000 Foreign exchange is controlled by the government. 23,000 Goldprice USD/VND 22,500 1800 22,000 1600 Max 5% volatility 21,500 1400 25% Low liquidity Real estate High investment capital Lending rate Source: GSO, Reuters, Custom Office Nov… Deposit rate 20% 15% 10% 6% 2014 2013 2012 2011 2010 2009 2008 0% 2007 5% Oversupply Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May… Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Deposits are unattractive with annual rate of 5-6% 2015 Real estate requires high investment capital 2015 2014 2013 20,000 2012 1000 2011 20,500 2010 1200 Nov… 21,000 9 I.3. Other investment opportunities in the stock market § Potential increase on foreign ownership limit up to 100% Foreign ownership of Vietnamese listed companies, except for Banks and Securities, is limited to 49%. In the near future, the Government will possibly expand the limit up to 100% for other sectors to attract more foreign investment flows. This expansion, if applied, will stimulate the continuous growth of Vietnam's stock market in coming years. § Multiple free trade agreements will support economic growth With many signed and anticipated free trade agreements (FTA), Vietnam’s economy will become more accessible and closely integrated with large international markets, accounting for approximately 80% of the global GDP. These FTAs are expected to motivate both export and GDP growth rates for Vietnam in the future, mainly happened from the removal of tax reduction and other trade barriers. • Trans-Pacific Partnership (TPP) – effective in 2018 • Vietnam – Korea FTA – effective since Dec 2015 • Vietnam – Customs Union Russia-Belarus-Kazakhstan (VCUFTA) • Vietnam – European Union FTA (FTA VN-EU) – effective in 2018 • Asian Economic Community (AEC) – joined in Dec 2015 10 I.4. Attractive valuation of Vietnam market versus regional peers (x) 20.0 18.0 PE PB 16.0 14.0 12.0 11.4 10.0 8.0 6.0 4.0 2.0 Vietnam Singapore China Thailand Indonesia Malaysia India Phillipines P/E ratio of Vietnam sets around 11x, lower than other regional peers while GDP growth is among the highest Source: Reuters as of 31 Dec 2015 11 Summary I. Investment Opportunities in Vietnam II. Key Risks from Investment in Vietnam III. Potential Sectors for Investment IV. The Company – Thien Viet Asset Management – TVAM V. The Fund – Thien Viet Assess Management Growth Fund – TVAMGF 12 II. Key risks from investment in Vietnam High public debt Public debt/GDP • 62% 61% Public debt is approximately 61% of GDP by the end of 2015, come close to the national benchmark of 65% 60% GDP rate set by the government. The high public debt, 58% if are not well controlled, will probably cause a reduction in public investment and negative impacts on economic 56% growth and stock market in upcoming years. 54% • Accordingly, the Government also aims to control public 52% debt below 65% of GDP and will gradually reduce the 50% level after 2017. 2010 2011 2012 Source: Reuters as of 31 Dec 2015 2013 2014 2015 13 II. Key risks from investment in Vietnam VND devaluation After depreciated by 5% in 2015, the Government targets to keep the VND devaluation rate to be lower than 5% in 2016. The devaluation of VND is currently considered as one of key concerns for Vietnam in coming years under intensive pressure of stronger USD and weaker CNY. The continuous decline of VND in future, if are not well controlled, will take a negative impact on Vietnam’s macro economy as it may affects foreign debt solvency of the Government and Vietnamese enterprises, increases imported costs of the whole economy and restricts FDI and FII attractions on Vietnam. However, in order to properly handle global impacts such as China’s forex policy or Fed’s interest rate policy, in 2016, the State Bank of Vietnam has applied central rate policy that allow VND/USD rate to be adjusted everyday to become more flexible with the demand and supply of foreign currency within Vietnam and adjustments in the global markets. The new policy is expected to reduce USD speculation and thus, release VND devaluation pressure. 14 Summary I. Investment Opportunities in Vietnam II. Key Risks from Investment in Vietnam III. Potential Sectors for Investment IV. The Company – Thien Viet Asset Management – TVAM V. The Fund – Thien Viet Assess Management Growth Fund – TVAMGF 15 III. Potential sectors for investment No. 1 2 3 Sector Investment rationale Construction § The strong rally of real estate market has stimulated higher demands on construction services. Statistically, total construction floor areas in 2015 reached 101 million m2, increasing by 10%yoy § The Government will increase investment in transportation infrastructure system in coming years. As planned, demand for transportation infrastructure development of the Government will amount to VND187,895 billion until 2020. § In 2015, the Government has issued new regulation to support co-investment under Public – Private Partner, “PPP” in infrastructure investment. The regulation will support to absorb more capital for infrastructure investment projects. § Construction is one of the top contribution sectors in 2015 GDP growth. Construction materials § Benefit from the strong recovery of real estate market. § High growth potential in coming years thanks to intensive infrastructure investment projects. § Some sectors may benefit from the plummeting oil price such as plastic pipe, asphalt manufacturing. Logistics and Ports § Benefit from transportation loading limit regulation of the Government that will spur more demands for transportation services. § Benefit from the declining oil price that will support to reduce fuel cost. § The increase in import & export activities resulting from many awaiting Free trade agreement (FTA, TPP) will attract stronger demands on port, transportation and logistic services. At present, many ports in the North are overwork. 16 III. Potential sectors for investment No Sector Investment rationale 4 § Stable demands on consumer products due to rising income per capita, easing inflation and declining oil price. Consumer goods § Some sectors may benefit from declining material input cost (milk powder price – milk production, oil price – detergent production) 5 Information Technology § Telecom absorption rate in Vietnam is growing higher than global average. § System integration sector will likely recover in coming years follows the increase in demands from traditional customers such as Tax, Banks, Financial institutions. The Government is also investing in intelligent transport system for transportation infrastructure development projects. § High growth potential in software outsourcing comes after the recovery of oversea market and low labor cost advantage. § Demands on smart phones, tablets are forecasted to post double digit growth. Textile and Garment § Textile and Garment are one of key export products of Vietnam in terms of export value. The sector’s export value grew by over 10% in 2015. § Benefit from the trend of moving orders from China to Vietnam to get advantage from Free trade agreements (TPP, FTA). § High growth potential from export markets arise from those anticipated Free trade agreements (FTA, TPP) will offer favorable tax rates in the future. 6 17 III. Potential sectors for investment No Sector Investment rationale 7 • Stable demands on pharmaceutical products due to better awareness of health care. The sector posted average growth rate of over 17% during 2009 – 2014 and over 13% in 2015, according to Pharmaceutical BMI. • Pharmaceutical spending per capita of Vietnam is still lower than regional average while the income is improving - implying available room for the sector growth. 8 • Transport loading limit regulation of the Government has pushed higher demand on trucks as well as tires and batteries. Tire and Battery • Benefit from the impressive growth of auto sales, increasing by 40% per annum during 2011 – Manufacturing 2014 and over 50% in 2015. • Benefit from the strong decline of key input materials such as oil and rubber price for tire manufacturing and lead price for battery manufacturing. 9 • High credit growth potential in coming years. In 2015, credit growth reached the highest growth rate since 2011 of 17%. The State Bank forecasted credit growth will rise further in 2016 with average growth rate of 21.4% YoY thanks to improvement of economic activities. • Bad debts have been well controlled and tended to reduce. Bad debt in 2015 reduced to only 2.7% from 4% in 2014. • The strong rally of real estate supports the banking sector to reduce bad debts and push higher credit growth. Bank 18 III. Potential sectors for investment No 10 Sector Investment rationale Real estate • Real estate market has shown a clear sign of recovery. According to CBRE, total sold out apartments increased strongly by 133% YoY in Ho Chi Minh city and 114% YoY in Ha Noi in 2015. • The policy of allowing foreigners to buy Vietnam’s real estate, effective since 1 Jul 2015, will support the continuous rally of real estate market in coming years. • Low lending rate will spur more demands on real estate and reduce financing cost of real estate companies. • Transportation infrastructure development attracts higher demands on real estate (the Eastern area of Ho Chi Minh) • The soaring FDI inflows will stimulate more demands on industrial zones and residential real estate for employees. • Demands on tourism real estate for lease tends to increase recently in some areas such as Phu Quoc and Nha Trang. 19 Summary I. Investment Opportunities in Vietnam II. Key Risks from Investment in Vietnam III. Potential Sectors for Investment IV. The Company – Thien Viet Asset Management – TVAM V. The Fund – Thien Viet Assess Management Growth Fund – TVAMGF 20 IV. Thien Viet Asset Management - TVAM Thien Viet Asset Management (TVAM) is a newly formed fund management company, a 99% subsidiary of Thien Viet Securities (TVS) that offers two types of services including (1) Closed-end Fund and (2) Managed Accounts. The Company intends to provide an opportunity for long-term investors to participate and benefit from the growth of Vietnamese economy by making investment in Vietnam Stock market. Investment Directors Mr Tran Vinh Quang He has worked for TVS since 2011 and being in-charge of all listed investments for TVS. Before joining TVS, he had 6 years experience as portfolio manager at Viet Capital Asset Management, monitoring two funds specialized in listed stocks with total AUM of US$70 million. Prior to that, he worked as assistant manager in Finance department of Unilever Vietnam. He earned a BA degree with distinction from the UNSW, Australia in 2005 under a full scholarship program sponsored by the Australian government. Mr. Quang has passed all exams of ACCA (the Association of Chartered Certified Accountants - UK) and CFA (Chartered Financial Analyst) and is currently a CFA Charterholder. Mr Nguyen Duy Quang Mr Quang is currently Portfolio Manager of Thien Viet Asset Management with over 14 years of experience in finance and investment sectors. Mr Quang used to work for some multinational corporations such as PricewaterhouseCoopers, Unilever, BP Exploration Operating, Procter & Gamble at positions of Financial Consultant, Deputy Manager of Management Accounting in many years and managed a foreign Fund – Vietnam Equity Holding with total asset value of over USD100 million for approx 4 years at the position of Senior Investment Manager. 21 IV.1. Experienced Investment Committee Mr Nguyen Trung Ha Mr. Ha is acknowledged as a prominent strategic thinker with extensive angel investment experience in Vietnam with a portfolio of more than 30 local companies. He was a founder of FPT in 1988, where he was Chief Strategist for many years. Mr. Ha was also a founder of Asia Commercial Bank (ACB), currently the biggest private commercial bank in Vietnam. Ms Dinh Thi Hoa She is the Founder and Chairwoman of the Galaxy Group, one of the most successful and largest media and entertainment groups in Vietnam. Ms. Hoa is the first Vietnamese who had Harvard MBA graduate in post-war period Vietnam. She was instrumental in helping to set up a US$100mn Proctor & Gamble operation in Vietnam before founding the Galaxy group in 1994. She is also a founder of the Hanoi School of Business and headed its Marketing department for several years. She currently serves on the board of ABCS and REE. Ms Bui Thi Kim Oanh Ms Oanh has had over 18 years’ experience in the fund management area. She worked as an investment manager for several funds such as Vietnam Equity Fund, Finansa Vietnam Fund, New S Finansa Vietnam Balanced Fund. Ms Oanh used to work for Bao Viet Insurance Corporation for 8 years. Ms Oanh has an Economics degree from Humboldt University in Germany and a Master degree from Asian Institute of Technology in Thailand. Ms Nguyen Thanh Thao She has been the CEO of TVS since Mar 2013 as well as Managing Director, Head of TVS based in Ho Chi Minh City since Sep 2008. Prior to joining TVS in 2007 as Head of Research, she was a Senior Financial Analyst at Ameriquest Capital Holdings, one of the largest mortgage lenders and some other financial institutions in the US. Prior to this, Thao was a Legal Office Manager for a law firm based in California, USA. She holds a Bachelor degree in Economics from the Moscow State University of Foreign Affairs (MGIMO) in Russia in 1997 an MBA from the USA in 2005. 22 IV.2. Thien Viet Asset Management - TVAM TVS’s Background (The Parent company of TVAM) Established in 2007, TVS is a fully licensed independent Investment Banking institution in Vietnam, complying with international standard and dedicating to satisfying clients’ demand. Financial services include Investment Banking, Institutional Clients, Brokerage, Proprietary Trading and Research. During 2011 – 2014, TVS was always in top 6 of over 100 securities companies in Vietnam with highest Return on Equity (ROE). TVS always focuses on two key business segments – Investment Banking and Proprietary Trading during hard periods of financial market. In Proprietary Trading, TVS’s Board of Directors always try to outperform the market by balancing risk and reward in line with value investing strategy instead of speculation. In 2015, TVS’s investment portfolio increased by 15.5% versus VNIndex’s return of 6%. In Investment Banking, TVS is one of the leading consultants in Vietnam with 22 successful deals valued at USD660 million. The deal Diana – Unicharm, with TVS as an exclusive financial consultant of Diana’s shareholders, was awarded the prize of “The best deal of the year” by The Asset Magazine in 2011. 23 IV.3. Effective strategies during the last 4 years 300% 250% 200% TVS's NAV Fund HSX-index HNX-index 150% 100% 50% 0% 2011 2012 2013 2014 2011 2012 2013 2014 2015 Vina Capital VN Opportunity -7.6 17.4 16.7 9.0 -1.3 VN Holding -2.1 20.2 41.6 18.0 8.4 VN Emerging Equity -30.6 24.9 30.5 12.8 7.3 VN Growth Fund VN Index HNX Index TVS -19.4 -27.5 -48.6 -20.5 30.0 17.7 -2.7 31.4 23.8 21.9 18.7 69.8 5.2 8.0 22.4 32.2 4.3 6.0 -3.6 15.5 2015 -50% TVS’s portfolio has consistently beaten the market during the past 5 years, generating an annualized return of 21% compared with 4% of the VN-Index. 24 Summary I. Investment Opportunities in Vietnam II. Key Risks from Investment in Vietnam III. Potential Sectors for Investment IV. The Company – Thien Viet Asset Management – TVAM V. The Fund – Thien Viet Assess Management Growth Fund – TVAMGF 25 V. The Fund Structure § TVAMGF is a closed-end listed fund, expected to be listed on HOSE, with a well-diversified portfolio investing in listed and prelisted securities. § The Fund has a 3 years lifespan. During its life, the Fund will not repurchase shares per request from shareholders. The shares will be traded on the stock exchange just like common stocks. Investment Objectives & Strategies The Fund’s investment objectives are to seek for long-term growth of capital, maximize investors’ profit and outperform all Vietnam indexes. In pursuing these objectives, the Fund will focus on investing in listed and prelisted securities of Vietnamese companies that offer superior opportunities for growth. The Fund seeks to invest in companies with strong characteristics including an experienced and proven management team that supports corporate governance and financial transparency, a high-growth business model, differentiated products or services, superior competitive advantages, a significant market share, and a clear and demonstrable exit strategy for investors. Fees: • Management fee: 1.0% p.a of Ending NAV • Performance fee: 20% p.a. over 8% hurdle rate with high water mark. Sector focus: All industries, except fund certificates Investment Restrictions: No more than 20% of the NAV may be invested in a single company, no more than 30% of the total NAV may be invested in a single sector, no more than 15% of total NAV may be invested in unlisted companies. The Fund will not invest in more than 15% stake of any company. No gearing will be allowed Portfolio: The Fund will generally hold between 15 - 25 securities. 26 V. The Fund Key Terms Fund size VND150-300 billion Custodian BIDV Listing exchange Ho Chi Minh City Stock Exchange Functional Currency VND Total issued shares 15-30 million shares Auditor KPMG Issued price VND10,100 Last date of submission 28 Mar 2016 Par value VND10,000 Investment Director Nguyen Duy Quang Minimum buying shares 10,000 shares Fund Manager Thien Viet Asset Management Fund life 3 years Investment Committee Nguyen Trung Ha, Dinh Thi Hoa, Bui Thi Kim Oanh, Nguyen Thanh Thao Dividend policy will be decided by shareholders at the Annual General Meeting (AGM) Reports Quarterly official NAVs & annual audited NAVs. 27 V. The Fund Why should investors participate in TVAMGF 1. Free access to “full foreign ownership limit” stocks for investors We are local fund and can offer free access to “full foreign room” stocks for both foreign and domestic investors . This is our exceptional advantage over foreign funds that have limited access to “full foreign room” stocks 2. Experienced Investment Committee and Investment Team 3. Effective investment strategies with consistent outstanding result during the past 4 years 4. Competitive service fee structure 28 V.1. Competitive Service Fee Structure TVAM’s Service Fees Accounting period End of the year ( December 31 st ) Hurdle rate 8% Management Fee 1% x Ending Net Asset Value (NAV) Performance fee is calculated at year end after fund’s management fee Performance Fee § X: percentage of profit (after management fee) § X <=8%: p = 0% § X >8%: p = 20% x (X – 8%) x NAV at the beginning of Accounting Period Fee comparison with peer funds Fund Hurdle rate 8% fixed Management fee 2% Performance fee 20% 1 Dragon 4 VinaCapital 8% fixed 2% 20% 5 PXP 8% fixed 1.5% 15% 6 Vietnam Equity Holding 8% fixed 2% 20% 7 Indochina 8% fixed 2% 20% 8 TVAM 8% fixed 1% 20% 29 V.2. Fund comparisons There are two main types of investment funds: Open-end fund and closed-end fund. The open-end fund is required to buy back shares from investors upon request while the closed-end fund is not. Criteria Liquidity Closed-end fund Open-end fund ETF Stable capital helps the Fund to be The Fund always reserves cash to The Fund always reserves cash to flexible with its liquidity need and repurchase Shares and manages repurchase Shares and manages can invest in long-term assets liquidity cautiously liquidity cautiously There are no needs to do due Value investing philosophy with Value investing strategy but diligence or research on active strategy. Proactive with due somewhat passive. Always focus companies. Mainly focus to diligence and research on on the liquidity of shares in order replicate the index by investing in Investment Strategy companies and Performance to meet investors’ redemption stocks that match the Fund’s capitalization and liquidity criteria request Target to achieve higher than market’s return Target to achieve market’s return Short and medium term Short, medium and long term Short and medium term investment as needed to meet investment to maximize returns investment as needed to meet Timeframe redemption request redemption request Buy and Sell shares Shares is traded on the stock exchange with commission fee Direction from the fund with trading fee Direction from the fund with trading fee 30 V.3. Investment Approach & Risk Control Process 1. Origination and Deal Flow Sourcing We apply both Top-down and Bottom-up approaches for deal sourcing • Top down approach starts by identifying the attractive sectors, followed by the attractive companies operating within those sectors. The top-down approach attempts to understand the sector structure and overall business performance as well as possible impacts from macro economy changes that could significantly affect the sector’s development. • Bottom-up approach starts by identifying the attractive companies via a screening exercise of database of companies based on some key financial performance indicators such as earnings growth, profitability ratios, valuation multiples and financial health. We use Bloomberg and Reuter terminals to implement the screening exercise. 2. Due Diligence and Investment Proposal We typically analyze the following factors to identify a target investment • An analysis of macro economy that may impact earnings and profitability of the company; • A thorough assessment of the company’s focused market; • An analysis of the company’s historical performance and business plans, including an assessment of products, differentiations, competitors, and operations; • Comparison with other domestic and foreign peers in term of P/E, P/B and DCF valuation; • SWOT analysis; • The identification of particular risk factors and means of overcoming or mitigating such risks; • An investigation of the background of the management team; • The formulation of an exit strategy and timetable for achieving liquidity. 31 V.3. Investment Approach & Risk Control Process 3. Investment Approval The Investment Committee will meet periodically to approve new investment proposals and advise proper investment strategies, percentage of allocation between cash & stocks for Portfolio Manager in order to maximize profit and minimize the risks related to macro economic and political issues. The Portfolio Manager will be responsible for all aspects of the implementation and execution of investment decisions. 4. Investment Monitoring The Portfolio Manager will monitor the progress and performance of each portfolio company through periodic meetings with its management, site visits, quarterly, and when available, monthly reviews of financial data and management reports. The Portfolio Manager will regularly consider and report to the Investment Committee on the plan to exit current investments and make new investments. 5. Investment Realization The Portfolio Manager will aim to realize individual investments if the realization would be in the best interest of the Fund, ideally within one to three years time frame when exit targets are reached. The exit targets will be defined by a combination of multiple valuation methods including P/E, P/B and DCF valuation. 32 V.3. Investment Approach & Risk Control Process 6. Risk Control There are no limits on the sectors in which the Company can invest. However, the Company will endeavor to adhere to the general principle of sector diversification in respect of its assets. For risk control and portfolio diversification, the Company will apply some below restrictions on investment: • Will not invest more than 20% of total NAV in the shares of a single company. • Will not invest more than 30% of total NAV in the shares of a single sector. • Will not invest more than 15% of total NAV in unlisted companies. • Will not invest more than 15% stake of any company. When the NAV of portfolio decreases by more than 15%, Portfolio Manager has to report and explain to Investment Committee the reason and propose proper action - Hold or Cut Loss. The Investment Committee will make final decision. When stock price decreases by more than 20%, Portfolio Manager has to report and explain to Investment Committee the reason and propose proper action - Hold or Cut Loss. The Investment Committee will make final decision. 33 V.3. Investment Approach & Risk Control Process Origination and Deal Flow Sourcing Due Diligence and Investment Proposal Top down approach Macro economy analysis Bottom up approach Financial forecasts Investment Approval Investment Monitoring Investment Committee (IC) approval Periodic meetings with firms Risk controls Periodic meetings with IC Investment Realization One to three years time frame SWOT analysis DCF, PE, PB valuation Management investigation 34 Disclaimer The Company and the Board will treat information received from Shareholders as confidential and generally will not disclose such information other than in accordance with the Charters, and the Subscription Agreement but may disclose information where such disclosure i s required by any law or order of any court or pursuant to any direction, request or requirement (whether or not having the force of law) of any central bank or governmental or other regulatory or taxation authority. By subscribing for Shares in the Fund, a Shareholder is deemed to consent to any such disclosure. Contacts NGUYEN DUY QUANG NGUYEN AN THIEN TRANG THAN HONG THANH GIANG Investment Director Investment Manager Investor Relations Phone: +848 6299 2090 – Ext: 300 Phone+848 6299 2090 - Ext: 202 Phone: +848 6299 2090 - Ext: 301 Email: [email protected] Email: [email protected] Email: [email protected] 35