In 2013 a series of investment funds have deprived of their investments in Vietnam. Most divestments bring in big profits, even with a double-digit value, for investment funds.
According to a report by Mekong Capital, a typical PE fund, as of the end of the third quarter of 2013, the fund made 26 investments in various fields and it divested from 14 companies and continued its investments in 12 private companies.
Its Mekong Enterprise Fund I (MEF I) and Mekong Enterprise Fund II (MEF II) have sold the entire 29.7 percent of stake in Ngo Han Joint Stock Company, a electric wire producer. The proceeds valued VND101.2 billion.
In March 2013, MEF II completed the transfer of 6.7 percent out of its 32.5 percent stake in Thegioididong Company with a price which was 11 times higher than initial investment value in 2007. Mr Chris Freund, CEO of Mekong Capital, said: "The investment in Thegioididong is our big success. From 7 stores when we invested, Thegioididong currently has over 220 stores nationwide". Mekong Capital also administers Vietnam Azalea Fund which is presently holding stake in PNJ, Nam Long Group, Traphaco, An Giang Plant Protection Company.
In September 2013, Mekong Capital's investment funds also divested from MK Smart Joint Stock Company, the only producer of bank cards and telephone SIM cards in Vietnam, and Digiworld Company, the distributor of IT products).
Remaining investments also brought in huge profits for Mekong Capital. Golden Gate posted a net profit growth of 73 percent and Traphaco achieved a year-to-date net profit growth of 42 percent. This was mainly driven by enhancing the performance of the existing distribution network and expanding the product portfolio.
After completing the renovation of all Thegioididong.com stores across 63 provinces and rolling out new standards for customer service, MobileWorld performed exceptionally well in the third quarter. For the first three quarters of 2013, net profit is up 49 percent compared to the same period in 2012.
Besides, ACC achieved a year-to-date net profit growth of 43 percent. This growth was driven by strong performance in the company’s core food and beverage ingredient business, in which its key customers also delivered strong growth. Nam Long Group continued to deliver strong sales of the affordable housing EHome products. During the third quarter of 2013, the company successfully launched Ehome 3 West Saigon sales event with 266 of 553 apartment units sold. This reaffirms consumer interest for the EHome brand, and the viability of the affordable housing segment at the present time.
VinaCapital also finalised the complete divestment from Keating Capital, enjoying 34 percent of gains. Presently, VOF is keeping five PE investments, including IBS (building materials) with the net asset value (NAV) rising 1 percent, Yen Viet (consumer goods) with just a 0.4 percent growth.
With a prudent investment strategy, the fund always considers investing in consumer, healthcare and education fields. After more than five years, Mekong Capital Fund divested from a series of companies. Remarking on upcoming investment strategy, Peter Goodson, Chairman of the Advisory Board of Mekong Capital, said: "We aim at Vietnamese enterprises with individual capital of US$10-15 million. If they potentially expand 5-7 times in the next 5-7 years, we will consider an investment," he explained.
In 2014, P/E investment wave will not be as strong as in 2005-2007, the prime time of this form of investment. In addition, foreign funds will focus on locking in profits and review portfolios to catch opportunities when the economy recovers. Given the current tough time of the economy, finding safe, profitable investments needs more stringent requirements.
Huong Ly
Vietnamese
