VIETNAM SEPTEMBER 2015

MARKET REVIEW

VN Index stabilises, After a tumultuous August, stockss stabilised in September with the Index closing essentially
though foreign unchanged, down a mere 0.15% att 563. This was further evidence of Vietnams resiliency versus
outflow continued the rest of the EM asset class. However, foreign net selling accelerated, moving from $17m to
$40m for the month, and sentimentt turned cautious with average daily turnover off 27% to $72m.

Military Bank Military Bank (MBB) was a standou ut performer, advancing 9.2%, with 41m foreign shares being
outperformed on thrown up by a large placement to its core armed-forces shareholders. Off-shore investors have
creation of new been locked out of the stock for yeaars as management held foreign room at 10%, looking for a big
foreign stock international bank to come in as a 20%
2 strategic partner. There is strong appetite for MBB, based
on its cheap valuation, high yield, healthy earnings and good asset quality, and we expect the
available room to be filled up quicklly when the new shares are listed.

Energy, brokerage
Energy At the opposite end of the spectrum
m the renewed decline in the oil price took a predictable toll on
m,
and mining stocks fall energy stocks, with PV Drilling andd PV Gas both retreating about 6%. Also brokers were much
weaker, with Saigon Securities andd Ho Chi Minh Securities both losing 9%. The market is holding
up nicely, but confidence is not tottal. And Masan, now significantly exposed to tungsten prices,
lost 6% as commodity concerns rem mained acute.

Growth is accelerating Despite economic slowdowns else ewhere in the world, Vietnam remains attractive as one of the
while equity few countries where GDP is expected to accelerate in the next few years. Forecast growth of
valuations
l ti remain
i 6 8% in 2016 is the second-highes
6.8% second highesst in the EM asset class and for that matter the world after
cheap India. Growth is double-barrelled as
a the domestic sector is now firing alongside the export sector,
and growth is also sustainable than
nks to the robust macro structure which has been created post-
bubble. Yet valuations are among the cheapest in the region and it is very likely that the market
found its bottom when it touched 51
10 during the panic sell-off last month.

Foreign investor Foreign interest in the market is coonsequently at the highest level in years. Prospective investors
interest in Vietnam are streaming in to visit and the international press is full of articles about the countrys promising
h surged
has d outlook.
tl k Although
Alth h some fall-out
f ll t willill be
b hard
h d to
t avoid id if there
th i a global
is l b l slowdown
l d with
ith
significant further Yuan devaluationn Vietnam will hold up better than its peers. And with positive
developments, like the now-comple eted signing of TPP, or the favorable reform track we expect to
emerge from the Party Congress, th hen Vietnam can respond very bullishly.

MARKET FORECASTS MARKET PERFORMANCE

30-Sep-15 Unit 2013 2014 2015F 2016F 400 650

Volume VNI
PER x 12.7 12.8 12.1 10.1 $m
VNI 600
EPS Growth % 19.1 3.0 6.5 21.5 300
550
PEG x 0.7 4.3 1.9 0.5
Sales Growth % 7.4 20.5 13.3 17.5 200 500
EBIT Growth % 11.2 11.5 14.1 20.4
450
PBT Growth % 20.3 3.6 7.0 21.3 100
NPAT Growth % 22.6 4.6 8.7 21.6 400
Net DER x 0.2 0.3 0.2 0.2
0 350
Yield % 4.1 3.3 3.7 3.7 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15

COMPARATIVE RATINGS, 2016 FOREIGN SELLING ACCELERATES

17 80
PER - x

16 $m
SRI LANKA
15 INDIA 60
14 MALAYSIA PHILIPINES 40
13
THAILAND
12 20
11 INDONESIA
10 VIETNAM 0
9
-20
8 PAKISTAN
7 -40
6
CHINA
EPS - LCY% -60
5
7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15
1
 VIETNAM SEPTEMBER 2015

ECONOMIC REVIEW

September macro Macro numbers released in Septem mber presented a mixed picture. There was outstanding GDP
numbers mixed, but growth, and a rise in employment, but b also a decline in new orders and a downbeat PMI reading.
economy seems The economy is a little difficult to fo
orecast at present, based on lack of clarity about how it will be
robust affected by external events. But the domestic sector is in good shape and has steadily
accelerated despite exports slowin ng for a couple years now.
now If the global situation does not
deteriorate too much, Vietnam shou uld be able to sustain the momentum.

9M15 GDP growth
highest since 2011
GDP posted 6.8% in 3Q and 6.5% ytd, y the highest in four years, led by industry, construction and
services. Agriculture continued to stagnate due to slumping commodity prices, but the sector is
by now quite a small component of o the economy. Less encouragingly, new orders did fall, but
analysts were quick to point out that this was offset by the rise in employment. This suggests that
producers remain optimistic about new
n orders bouncing back in due courrse.

PMI below 50 for first
time in two years, but
may be a one-off
A more bearish development was the t fall in the Nikkei Market Vietnam PMI to below 50 where it
last was in August 2013. The PMI indicator has been on a declining trend since May. This could
be seen as tying in with the slump p in new orders, as a reflection of weakening global demand,
compounded by anxieties over Fe ed rate hikes and further Yuan devaluation. Or, as far as
September was concerned, it migh ht be due to unusually heavy rains that reduced construction
and logistics activity to low levels fo
or the month. As a matter of fact the 3Q PMI was weak in 2013
and 2014, and then recovered in 4Q Q. A similar scenario might play out this year.

Domestic economy
is in the groove
Vietnams own macro dynamics, ho owever they may be affected by the outside world, are still very
favorable. On the domestic front, thhe recovery from recession is ongoing, as banks approach the
end of NPL work-outs and startt lending again. The Government continues to spend on
infrastructure, and this cannot be maintained forever, but it is a good thing for now. Foreign debt is
minimal, inflation is low and the Don
ng is inherently stable, except when China does Yuan shocks.

Progress of exports is Exports are in good shape too. Their growth may fluctuate because of the commodity
assured especially component,t but
b t this
thi isi rapidly
idl dwin
d indling
dli i favor
in f off basic
b i manufactures,
f t which
hi h are sett to
t keep
k
with TPP finally inked expanding as FDI rolls. And the ey tend to be more resilient during recessions too. Their
preponderance in the export mix is a key differentiation vs peers. Vietnam is on track to replace
China as the worlds low-cost produ
ucer, and the recent finalisation of TPP clinches the case.

ECONOMIC FORECASTS NIKKEI MARKIT VIETNAM PMI

55
unit 2013 2014 2015F 2016F
Real GDP Growth % 54
5.4 60
6.0 66
6.6 68
6.8 53
Nominal GDP $bn 169.5 184.1 199.2 218.9
51
CPI % 6.0 1.8 1.5 2.9
Export Growth % 15.4 13.5 10.0 13.0 49
Import Growth % 16.1 12.1 15.5 14.0
47
Trade Balance (cif) $bn 0.0 1.9 (6.1) (8.6)
FX Reserve $bn 32.1 37.2 41.2 44.2 45
FDI Disbursed $bn 11.5 12.5 13.1 13.9
43
VND:$ (interbank) $1 21,250 21,390 22,590 23,268 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15

DOMESTIC RECOVERY DESPITE SLOWING EXPORTS GROWTH OUTPACING MOST PEERS

10 24 8
% %
% 22 7
9 3M/3M Exports (RHS)
20 6

8 18 5
4
16
7 3
14
2
6 12
Industrial Production (LHS) 1
10
5 0
8
-1
4 6 -2
Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 India Viet China Phil Indo Pol Peru Mex Thai Col Kor Chile Tur Rom Cz Hun Rus Brz Arg
2
 VIETNAM SEPTEMBER 2015

VIETNAM ENTERPRISE INVESTMENTS LIMITED (VEIL)

VEIL retreated by 0.29% in September, more or less in line with the VNI$, with bank and mid-cap real estate holdings being
the main positive contributors. Diversified financials, howeveer, weighed on the Funds performance as SSI plunged 9.2%
when its opening up to 100% FOL did not attract as much foreign buying as expected. MSN declined by 8.0% due to
substantial net foreign selling of $21.8m, mostly on divestment by a large shareholder.

Banking continued to contribute nicely to the Funds performancce, with core holdings ACB and VCB outperforming the market
on strong fundamentals and leading market shares. ACB, VEILs second biggest holding, recovered strongly in September,
up 6.1%. ACB is expected to finish its clean-up within this yeaar while VCB steadily widened its position vs its peers in asset
quality management by prudent provisioning. Both banks are well w positioned for the recovery of the industry that we foresee
in 2016-17. As the recovery path will differ for each bank, the Funds strategy is to increase exposure in selected banks that
we expect will benefit most from the economic recovery in gene eral and the real estate turnaround in particular.

The Fund
Funds s real estate holdings also had a good run in Septemmber KDH and KBC are two players in the sector successfully
mber.
offering niche products to the market. KDH, up 10.8% for the month, is a pioneer in gated communities and maintains a
strong financial position. Its high cash and low debt enabled d it to expand its land bank by 340ha recently by acquiring a
controlling stake in BCI, which was known for its large, low-cosst land bank but lack of execution capability. KBC, on the other
hand, has been recovering well from its liquidity crisis last year when its VND 3,000bn bonds were maturing. The company is
now in much better shape financially with most its debt eithe er paid off or extended, allowing its management to focus on
utilising its vast and cheap Industrial Park land bank in strategicc locations.

PRICE AND NAV DATA

Price Price Change
C Net
NAV/Share Std. Dev. Sharpe Ratio
Bid Offer Monthly YTD Assets
$3.42 $2.70 $2.78 0.0% -2.8% $493.60m 22.8% 0.153

NAV PERFO
ORMANCE
60
54.1 54.1
% - TR$$ 50 4
50.4
50 VEIL (NAV)
VNI (benchmark)
40 VN30 (comp)
32.5 31.6
30

20
15 2 16.2
15.2

10 6.2 6.1
0.6 1.2
0
-0.3 -0.2 -0.8
-3.1
-10 -5.4
-7.9
-12.1
-20
20
1M YTD 1Y 2Y 3Y 5Y
TOP 10 DATA DISCOUNT TO NAV
20
NO COMPANY CODE SECTOR NAV % CH % %
1 Vinamilk VNM F&B 16.2 - 10
2 ACB ACB Banks 10.1 6.0 0
3 Hoa Phat Group HPG Mat's/Res 7.2 -2.2
4 SSI SSI Brokers 6.5 -9.3 (10)

5 FPT Corp FPT Software/Svc's 6.1 0.7 (20)

6 REE REE Real Estate 5.3 -1.9
(30)
7 Vietcombank VCB Banks 5.2 1.0
8 Masan Group MSN Conglomerates 4.6 -8.0 (40)
9 Kinh Bac KBC Real Estate 4.0 3.3
(50)
10 KhaDien House KDH Real Estate 3.8 10.8 Jan-05 Jul-06 Jan-08 Jul-09 Jan-11 Jul-12 Jan-14 Jul-15
3
 VIETNAM SEPTEMBER 2015

Fund Bloomberg ISIN SEDOL CUSIP Listed

VEIL VIETENI KY Equity 1092
KYG9361H1 0933010 G9361H109 Ireland
VGF VIETNGF KY Equity KYG9361F1
1037 B01H2V4 G9361F103 Ireland
VDeF-B VNDEBTB KYG936151
1136 B3K9234 G93615113 Ireland
VPF VPF ID KYG9362H1
1083 B9JL3Q3 G9362H108 Ireland
VEUF VIETNAM ID IE00BD5HP
PH84 n/a n/a n/a

Price Providers Funds Bloo

omberg Reuters Contact
Fabian Salvi
+84 8 3825 0386
Dragon
g Capital
p Markets VEIL,VGF,VPF
, , DG
GCP DRAGON1 fabiansalvi@dragoncapital.com
@ g p
dealing@dragoncapital.com

LingBridge John Bridgman / Gopi Lingam

+44 207 935 0288
Note: LingBridge is a registered VEIL,VGF
appointed representative of DC john@lingbridge.com
Markets (Europe), authorised and gopi@lingbridge.com
regulated by the FCA
Michele White
J ff i IInternational
Jefferies t ti l VEIL VGF VPF
VEIL,VGF,VPF JC
CEF n/a
/
+44 207 898 7140
Winterflood Securities VPF n/a n/a +44 207 663 6624
Dave Cumming
Numis Securities VEIL,VGF,VPF N
NUMI n/a
+44 207 260 1380
Johnny Hewitson
LCF Rothschild VEIL,VGF,VPF, VDeF LC
CFR LCFR03
+44 207 845 5960
IFS Operations
+852 3197 3311
(investing from Asia)
BNP Paribas VEUF
Transfer Agency Department
+353 1 612 5379
(investing from Europe / ROW)

Operational VEIL/ VGF/ VDeF/ VPF

Trading Shares trade OTC on a matched-market basis on the Irish Stock Exchange
Clearing Euroclear or Clearstream
Settlement HSBC Hong Kong (Euroclearr no. 20737)

VEUF
Subscription & Withdrawals Every Friday, or the following
g business day if Friday is not a business day

DISCLAIMER
This document is issued by Dragon Capital Markets Limited (DCK) on behalf of Enterprise Investme
ent Management Limited (for VEIL), Dragon Capital Management Limited (for VGF and VPF), Dragon
Capital Debt Management Limited (for VDeF), and Dragon Capital Management (Hong Kong) Limited (ffor VEUF).

This document is for investors in the above referenced funds (the Dragon Capital Funds) and otherr eligible recipients only. By receiving the documents, recipients confirm their eligibility. It contains a
review of the investment case for Vietnam and is neither a prospectus nor an offer or invitation to apply for shares or other interests and neither this document nor anything contained herein shall form the
basis of any contract of commitment whatsoever. The information contained in this document is for background purposes only and is subject to updating, revision and amendment, and no representation or
warranty, express or implied, is made, and no liability whatsoever is accepted by DCK, or any other persson, in relation thereto.

A investment
Any i t t mustt be
b maded on the
th basis
b i off the
th prospectuses
t off the
th Dragon
D C it l Funds
Capital F d alone
l and this
thi document
d t may only
l be
b distributed
di t ib t d to
t those
th eligible
li ibl to
t receive
i those
th prospectuses.
t I
Investors
t are
shareholders or unit holders in the Dragon Capital Funds and not customers of DCK. Past performannce is not necessarily a guide to the future. The value of shares in the Dragon Capital Funds and any
income derived therefrom may go down as well as up. You are advised to exercise caution in relatio
on to this document. If you are in any doubt about this document or any information contained in this
document, you should obtain independent professional advice.

Representative and Paying Agent in Switzerland: The representative and paying agent for VEUF in n Switzerland is BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002
Zurich, Switzerland. The VEUF prospectus, the key investor information documents (KIIDs), the article
es of incorporation as well as the annual and semi-annual reports may be obtained free of charge from
the representative in Switzerland.

Dragon Capital Markets Limited 2015. All rights reserved. The information contained in this docume
ent is strictly confidential and intended only for the use of the individual or entity to whom the report has
been provided by DCK. It is solely addressed to persons outside Vietnam. No part may be divulged to any
a other person, distributed, resold and/or reproduced without the prior written permission of DCK.