2025 Summary

The overall investment portfolio achieved 19% VND return in 2025, significantly lagging the 41% return of the VNIndex for the year. It is, though, important to note that (almost) all returns of the Index was from the 5-6x market cap growth of the country’s largest conglomerate Vingroup and its related entities. As such, market index is not an adequate benchmark for performance for this year – it is relatively flat when excluding this factor. Since inception in May 2023, the portfolio has returned approx. 23% CAGR on VND basis.

2025 is yet another choppy year for the Vietnamese equity market. The “Trump tariffs” triggered a dramatic sell-off in April. The market then recovered strongly in the following two quarters on the back of the optimism around government’s new economic agenda and equity market status upgrade (from frontier to emerging market). The last quarter of the year saw meaningful corrections and more muted activity as investors awaited clarity on the politics front, plus negative market chatters around liquidity of the banking system towards year-end. Every time market moves, there is a narrative produced to explain the swing. The Vietnamese Mr. Market is highly irrational as 90% activity is driven by retail investors, whose mood tend to swing depending on what headlines they see in the news from time to time. As mentioned many times, this market feature creates plenty of opportunities for a thoughtful contrarian strategy such as ours.

The portfolio’s three largest investments as of now are Mobile World (MWG), Gemadept (GMD) and Vietnam International Bank (VIB).

MWG is arguably the best retailer in Vietnam. Dominating the electronics category, the Company is now expanding its grocery business rapidly nationwide after having found the profitable retail format. The investment thesis on MWG comprises three pillars: (i) Its electronics segment possesses a strong moat thanks to its trusted brand among the Vietnamese consumers. This segment is growing faster than market as management continues to improve operations; (ii) tremendous upside potential from the grocery segment which is expanding rapidly to the Central and Northern Vietnam, and even further upside from company’s electronics JV business in Indonesia that has achieved profitability and is now also in an expanding mode; (iii) expected recovery of Vietnam’s domestic consumption after some muted years, and a stronger shift to modern retail channels (such as those of MWG) thanks to the government’s new economic agenda. My estimate of MWG fair value is no less than VND100,000 per share with more upside. 

GMD is among the largest seaport and logistics operators in the country. Earlier in 2025, the bear argued that one of GMD’s major ports in the Northen Vietnam would face stiff price competition as new ports commenced operations in the same area. After that, Trump tariffs really triggered a panic sell-off the stock, only to see, quickly after, a sharp recovery in market value of the Company. Thus far, all the bear cases have been proven wrong – more port capacity in Haiphong has not affected GMD thanks to its port’s strategic location plus the strong operational expertise and established, trusted relationships with clients. Meanwhile, Vietnam’s strategic advantage as a manufacturing and trade hub has not been impaired by the Trump tariffs, it is even further solidified. My view is that the stock is still trading meaningfully under the business’ SOTP fair value of approx. VND80,000 per share, with the current price overhang from a significant shareholder divesting, and investors awaiting more clarity on the business performance after a period of frontloading activity post-Trump tariff announcement. Meanwhile, the Company continues to expand its ports’ capacity, plus further upside potential from the upcoming handling fee uplift to be approved by the government for all seaports. Management is making efforts to unlock additional shareholder value from divesting non-core assets such as its rubber plantation.

VIB is an investment I have held for almost 3 years now. It is one of the very few banks that have only achieved very modest growth in 2025 and as such, share price action has been quite muted. Banking is a unique business – the faster and bigger one grows, the higher the risk. Banks can expand their business almost at any rate depending on how strict they are on the quality of the borrowers. As such, the most difficult part of running a bank is risk management – achieving growth but to do so in the most prudent yet most profitable way. In an industry where everyone must compete on pricing (or interest rates offered to borrowers), VIB has successfully built a retail franchise that differentiates itself on unique product offerings and services. On top of that, their prudent lending and risk management practices are known to the market with a well-diversified loan book and adequate collaterals. Going into 2026, while the Street is mostly excited about banks with high credit growth potential or those that have some one-off catalyst events, VIB remains among my largest holdings due to its sustainable retail franchise and an unbelievably cheap valuation of 1.3x P/B and <8x P/E (i.e. even if earning does not grow, owning the business provides you 12.5% earning yield every year for a relatively safe investment), which makes the risk-return profile too compelling to ignore – heads I win, tails I don’t lose.   

Other than these three largest holdings, the portfolio also comprises smaller investments, which are all durable Vietnamese businesses that, for various reasons, are still trading well below my estimates of their intrinsic values, most of them having more cash than debt. My strategy is to wait and try to own those businesses when the price is right, rather than trading in and out of positions frequently or using leverage to juice up returns (and risks).

While I never attempt to predict short-term market movements, it is in my opinion that the overall liquidity (money) in Vietnam and globally will continue to rise going into 2026 and thereafter. Asset prices will continue to have strong support moving forward. That said, each market or asset may experience different outcomes depending on where they are in the current liquidity cycle and their idiosyncratic factors. In the longer term, I believe this will continue to hold true: Own assets or be left behind. The general approach to life is to remain unchanged: grow income, delay instant gratification, buy investments, and hang out with the right people.

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