Vietnam is a country to be reckoned with in this part of Asia.
In 2018, the Vietnamese economy climbed 7.1%, the fastest rate in the last 11 years. A recent report by DBS said that strong growth in private investments and its manufacturing industry, especially the electronics sector, as well as competitive salaries helped fuel the Southeast Asian country’s rise.
With that, let’s explore some Singapore-listed companies that have set up shop in Vietnam and could benefit from the country’s growth over the long term.
Handful of companies
On the property front, companies such as Frasers Property Ltd (SGX: TQ5) and Boustead Projects Ltd (SGX: AVM) have businesses in Vietnam.
Frasers Property started operations in the country in 1999. Even though Frasers Property’s investment in the country is quite small, it recognises the massive potential of Vietnam’s real estate market. As such, it said it will continue to focus on expanding its business there.
Boustead Projects also sees Vietnam as a growth market. Currently, it’s developing the Boustead Industrial Park in the country and it sees the potential to grow with its clients who may be expanding regionally.
From the consumer segment, Thai Beverage Public Company Limited (SGX: Y92), Jardine Cycle & Carriage Ltd (SGX: C07), and Fraser and Neave Limited (SGX: F99) are looking to capture more Vietnamese hearts.
Thai Beverage owns a 53.59% stake in Saigon Beer Alcohol Beverage Joint Stock Corp (Sabeco). Sabeco owns famous beer brands such as Saigon Beer and 333 Beer in Vietnam, which is one of the largest beer markets in Asia.
Fraser and Neave (F&N) and Jardine Cycle & Carriage have stakes in Vinamilk, a leading dairy producer in Vietnam in terms of market share. Jardine Cycle & Carriage has a 10.62% stake in Vinamilk, while F&N holds a 20.01% stake as of 28 December 2018.
Recently, Forbes Vietnam ranked Vinamilk as 2019’s top brand in the country with a value of US$2.2 billion. This is the fourth consecutive year the dairy giant has stolen the top spot. Coming in third is Sabeco with US$486 million in brand value.
The Foolish takeaway
According to the Asian Development Bank, Vietnam is expected to grow by 6.8% and 6.7% in 2019 and 2020, respectively. The 2019 growth forecast is the second highest among the 10 Association of Southeast Asian Nations (ASEAN) member states. Singapore investors who want exposure to the fast-growing ASEAN economy can look to invest in the companies mentioned above and benefit from Vietnam’s tailwinds.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Boustead Projects Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Boustead Projects Ltd.
Motley Fool Singapore 2019