INVESTMENT MANAGEMENT FINAL ASSIGNMENT

Table of Contents
I. INTRODUCTION.............................................................................................
II. OVERVIEW OF THE CLIENT’S PROFILE...............................................
III. ANALYSIS OF VIETNAM’S ECONOMIC PROSPECTS..........................
1. The Overall Economy.........................................................................................................
1.1. Economic Growth....................................................................................................4
1.2. Inflation and Exchange rate....................................................................................7
1.3. The Market Index.....................................................................................................8
2. Sectoral Analysis.................................................................................................................
2.1. Manufacturing Sector..............................................................................................8
2.2. Retail Trading Sector............................................................................................10
IV. PORTFOLIO SELECTION..........................................................................
1. Son La Sugar JSC (SLS)..................................................................................................
1.1. General Information about SLS.............................................................................12
1.2. Valuation of SLS....................................................................................................13
2. Mobile World Investment Corp (MWG)........................................................................
2.1. General Information about MWG.........................................................................15
2.2. Valuation of MWG.................................................................................................16
3. Portfolio Management......................................................................................................
V. CONCLUSION................................................................................................
REFERENCES......................................................................................................

List of Figures

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BAC6005: Investment Management
Figure 1: GDP growth rate of selected countries from 2020 to 2022.......................................4
Figure 2: Contribution of each sector to the total added value of the whole economy and the
economic structure of Vietnam in the first 9 months of 2023....................................................5
Figure 3: Growth of value added in the first 9 months of Service and Industry sectors over
the period of 4 years, from 2020 to 2023...................................................................................6
Figure 4: Contribution to export value by top sectors of Vietnam in the first 9 months of
2021, 2022 and 2023..................................................................................................................7
Figure 5: Increase and decrease of core inflation and CPI of Vietnam compared to the same
period last year...........................................................................................................................7
Figure 6: VN Index and HNX Index in 2023............................................................................8
Figure 7: Growth of monthly IIP in 2023, comparing to the same period last year.................9
Figure 8: IIP growth of selected production in Manufacturing sector in November and the
first 11 months of 2023..............................................................................................................9
Figure 9: Growth of Vietnam’s retail sales year over year in the 11 months of 2023............11
Figure 10: Increase in total retail sales of selected products in the first 11 months of 2023.. 11
Figure 11: Comparation of 5-year stock price between SLS and HNX30..............................13
Figure 12: Comparation of 5-year stock price between MWG and VN30.............................16
List of Tables
Table 1: SLS’s ROE, DPS and Retention rate........................................................................14
Table 2: HNXINDEX from 2019 to 2023...............................................................................15
Table 3: Return of SLS from 2019 to 2023.............................................................................16
Table 4: The standard deviation calculation for SLS..............................................................16
Table 5: Weighted mean calculation for MWG’s fair value...................................................18
Table 6: Return of MWG from 2019 to 2023.........................................................................19
Table 7: The standard deviation calculation for MWG...........................................................19
Table 8: Correlation coefficient calculation for SLS and MWG............................................19
Table 9: Portfolio selection for the client................................................................................20

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BAC6005: Investment Management
 I. INTRODUCTION.
Investing is, apparently, essential for building wealth since it provides substantial
financial security for both the present and future. It can be in many forms of investment, such
as bonds, stocks, mutual funds or even a savings account. Basically, the process of
purchasing assets that provide returns and have potential growth in value is called “investing”
(Napoletano, E.; Curry, B., 2022). However, every investments contain a level of risk, which
brings losses and reduces returns. Moreover, the massive amount of information on the
market is also a challenge for investors in the modern world (Beattie, 2022).
Therefore, in order to meet financial objectives, investors need to effectively manage
their portfolios and this can be assisted by an investment manager. By navigating complicated
financial markets or planning strategies for portfolio diversification, investment manager can
help their clients achieving long-term financial goals and minimizing the risks (Chen, 2023).
This assignment will deeply evaluate the process of investment management by providing a
report advising a customer on his investment. The report will firstly identify the customer’s
level of risk acceptance and return preferences. Subsequently, it will analyze the current state
of Vietnam economy and give recommendations for investing.

II. OVERVIEW OF THE CLIENT’S PROFILE.

The client demands a long-term investment costing 1 billion Vietnam Dong in the
Vietnam stock market. Currently, he wants to invest in the manufacturing and retail trading
sectors. Additionally, the client has a positive expectation about Vietnam economy as well as
those two industries.
Based on these information, it can be seen that the client’s plan is to hold a substantial
investment over a long period. His orientation can bring various benefits, such as gaining
return without the need of changing portfolio frequently or creating wealth with possible
chance to beat inflation (Fries, 2022). However, this means that he will need a portfolio with
well-performed firms for attractive income and capital gains. By investing in the stock
market, he demands a higher return than other types of investment, such as bonds or saving
accounts. Moreover, predictions about an economic recovery and positive information about
industries show that the client expects a desirable return from the investment.
According to the modern portfolio theory, there is a concept of risk and return
tradeoff, which states that the level of risk is proportional with the rate of return of an
investment. Basically, it means that a portfolio of relatively risky investments will offer a
relatively high rate of return for investor (Smart, S. B.; Gitman, L. J.; Joehnk, M. D., 2017).
In fact, by choosing the stock market to invest in, the client has accepted a riskier investment
for a significantly greater return. However, the modern portfolio theory also assumes that
investors usually behave as risk aversion in the stock market, when they not only care about
the expected return, but also focus on risk (Ackert, L. F.; Deaves, R., 2010). Therefore, the
client may be described as risk-averse, who demands a portfolio with greater return in
exchange for greater risk.

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BAC6005: Investment Management
III. ANALYSIS OF VIETNAM’S ECONOMIC PROSPECTS.
1. The Overall Economy.
The Covid-19 has led to severe consequences to Vietnam’s economy since the time it
broke out. After the pandemic, the Southeast Asia country had an incredible rebound in 2022,
with 8% of gross domestic product (GDP) growth, 5.4% higher than the previous year
(WorldBank). In 2023, Vietnam had expected the GDP growth rate at 6.5%, however, the
target might be unachieved because of the economic headwinds (Russell, 2023). In fact,
according to the General Statistics Office, Vietnam’s GDP increased by 4.24% year-over-
year in the first 9 months of 2023. The service sector was stated to lead the economic growth,
with added value rose by 6.32% year-over-year (Lang, 2023). This was thanks to the stimulus
policies for domestic consumption of the government and the post-Covid recovery of tourism
flow.
Additionally, in the first 9 months of 2023, Vietnam’s export value of goods has been
decreasing by 8.2%, compared to the same period last year, due to the shrinking consumption
of major markets, such as US and EU (GeneralStatisticsOffice). It was also notable that the
stock market has adversely suffered due to the policies on inflation control, coupled with
unfavorable occurrences in the global financial market and the local real estate sector.
1.1. Economic Growth.
Overall, Vietnam’s economic outlook has remained positive after the COVID-
pandemic. The country was stated to outperform all regional peers in 2020, with a positive
GDP growth at 2.9% (Lee, 2021). Especially, Vietnam had an incredible jump in economic
growth, with GDP growth rate rose from 2.6% in 2021 to 8% in 2022, exceeding other Asian
countries (IMF). This shows that the Vietnam’s economy had remained stably during the
peak time of the pandemic before experienced such a robust recovery.
Figure 1: GDP growth rate of selected countries from 2020 to 2022.

GDP growth in 2020 GDP growth in 2021 GDP growth in 2022

10.0%
8.9%
8.0% 8.1%
8.0%
5.9%
6.0%
4.1%
4.0% 3.6%
2.9% 2.6% 2.6% 2.2% 3.0% 2.6%
2.2%
2.0% 2.1% 1.5%
1.0%
0.0%
-0.7%
-2.0%
-2.8%
-4.0%
-4.3% -3.9%
-6.0%
-6.1%
-8.0%
Vietnam United Japan South Korea China Singapore Thailand
States

Source: IMF Website: https://www.imf.org/external/datamapper/NGDPD@WEO/VNM/SGP

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BAC6005: Investment Management
 Vietnam’s GDP in the third quarter of 2023 grew by 5.32% year-over-year (Jones,
2023) and was expected to increase by 7.6% in the fourth quarter (Anh, 2023). This means
the figure of GDP growth for the last-half of Vietnam was forecasted to increase by 6.6%.
However, the initial target of Vietnam’s GDP growth for the year 2023 at 6.5% was said to
be incomplete since the GDP in the first-half of 2023 only grew by 3.72% (Nguyen, L. H.;
Doten, K. M.; Trinh, N. P. T., 2023) and the figure for the last-half must be 9.2%, which is a
challenge according to the current situation. The International Monetary Fund (IMF)
continued to estimate Vietnam’s GDP growth at 4.7% for the year 2023 (Vo, 2023), which
was lower than the expectation of the country, at exceeding 5% (Russell, 2023). Although
Vietnam’s economic growth may be slowed down due to the current difficulties, the solid
foundation before and the strong recovery after the pandemic are strongly supportive for an
optimistic orientation of Vietnam’s economy.
So far, Vietnam’s economy remained positive in the first 9 months of 2023, with a
GDP increase of 4.24%. Although it was witnessed positive trends in the added value of both
service and agro-forestry & fishery sectors, the industry and construction sector experienced
a decline due to the heavy influence of global uncertainties. According to the General
Statistic Office of Vietnam, in the total added value of the whole economy, the agriculture
and forestry & fishery sector increased 3.43% and contributed 9.16%. The industry and
construction sector increased 2.41% and contributed 22.27%; the service sector increased
6.32% and contributed 68.57%. Regarding the economic structure of the country in 9 months
of 2023, the agriculture and forestry & fishery sector accounted for 11.51%; the industry and
construction sector accounted for 37.16%; production taxes less subsidies on products
accounted for 8.61% and the service sector accounted for 42.72%.
Figure 2: Contribution of each sector to the total added value of the whole economy and the
economic structure of Vietnam in the first 9 months of 2023.

Source: General Statistics Office of Vietnam.

After suffering severe impacts of the pandemic, the service sector has experienced a
strong recovery as a result of the economic reopening and several stimulation policies for
consumption. This sector grew 6.32% and significantly contributed to the economic growth,

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BAC6005: Investment Management
mostly through retail and tourism, with 8.9 million international visitors in 9 months, which
surpassed the target of 8 million for the year (ARC, 2023). In contrast, the industry and
construction sector witnessed many difficulties in the industrial sector due to the decline in
the global aggregate demand. The industrial sector only increased 1.65%, which was the
lowest growth over the same period from 2011 to 2023.
Figure 3: Growth of value added in the first 9 months of Service and Industry sectors over
the period of 4 years, from 2020 to 2023.

12.00%
10.57%
10.00% 9.63%

8.00%
6.32%
6.00%
4.45%
4.00%
2.69%
2.00% 1.37% 1.65%

0.00%
2020 2021 2022 2023

-2.00%
-0.69%
Service sector Industrial sector

Source: General Statistics Office of Vietnam.

Over the past decade, Vietnam’s economic integration with the world intensified,
which was fueled by trade and investment. This was a notable highlighted in the accession of
Vietnam to the World Trade Organization (WTO) in January 2007 (Nguyen, L. H.; Doten, K.
M.; Trinh, N. P. T., 2023). Therefore, it can be stated that the foreign direct investment (FDI)
and the capacity for exports have played essential roles in the economic development of the
country. According to official statistics, the FDI in the first 9 months of 2023 was estimated
to be 15.91 billion USD, which increased 2.2% y-o-y and was the highest growth in the last 5
years.
The export turnover of merchandises of Vietnam in the first 9 months was 259.67
billion USD, decreasing 8.2%. The country also reached a trade surplus of 21.68 billion USD,
rising 6.9 billion compared to the same period last year. Although some sectors, such as
agriculture, paper products and transportation vehicles, still experienced positive trends, most
sectors declined due to the decreasing of global consumption. Those sectors relating to
electronics, computers and mobile phones remained to lead the export market. Additionally,
with approximately 70.9 billion USD of export value, the United State was the largest export
market for Vietnam.
Figure 4: Contribution to export value by top sectors of Vietnam in the first 9 months of
2021, 2022 and 2023.

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BAC6005: Investment Management
 100%
15% 15% 16%
90%

80%
17% 16% 15%
Electronics, Computers and
70% Components
12% 12% Mobile phones and Components
11%
60% Machinery, Equipment and Other
industrial tools
50% 11% 11% 11% Textiles, Clothing and Sewing
supplies
5% 6% 5% Footwear
40% 4% 5%
4% Transportation vehicles and An-
5% 4% 3% ccessories
30% Wood and Products
Others
20%
32% 32% 33%
10%

0%
2021 2022 2023

Source: General Statistics Office of Vietnam.

1.2. Inflation and Exchange rate.
In November of 2023, the core inflation of Vietnam rose 3.15%, compared to the
same period last year (GeneralStatisticsOffice). It was a slight decrease after a rise of 3.43%
in October. The consumer price index (CPI) increased 3.45% during the period, in which
education, merchandising & service and housing & construction materials had the highest
rise of CPI, at 8.23%, 6.02% and 5.91% respectively. This was because of the adjustment in
tuition fee after the reduction during the pandemic and the influence of Russia-Ukraine war,
which pushed higher materials and rental costs.
Figure 5: Increase and decrease of core inflation and CPI of Vietnam compared to the same
period last year.

5.21%
4.99% 4.96%
4.81%
4.88% 4.49%
4.56%
4.54% 4.02% 3.43%
4.33% 4.11% 3.15%

4.89%
4.37% 4.55% 4.31%
3.35% 3.66% 3.59% 3.45%
2.81% 2.96%
2.43%
2.00% 2.06%

Nov- Dec- Jan-23 Feb- Mar- Apr-23 May- Jun-23 Jul-23 Aug- Sep- Oct-23 Nov-
22 22 23 23 23 23 23 23

CPI Core Inflation

Source: Trading Economics Website: https://tradingeconomics.com/vietnam/core-inflation-rate

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BAC6005: Investment Management
 By applying appropriate policies, Vietnam has kept inflation under control, comparing
to other countries in the region. Due to these inflationary control and improvements in the
liquidity of foreign currency, the country has stabilized the exchange rate (USD/VND), at
around 24,335 VND on 20 December 2023 (Bloomberg).
1.3. The Market Index.
In the first-half of 2023, Vietnam’s stock market was adversely influenced with a
sharp decline in liquidity (Diep, 2023). This was because of the persistent inflation,
prolonged monetary tightening policies of large economies and increase in geo-political
tensions. However, the market experienced a strong breakthrough in the third-quarter,
reaching the highest point in the year, at 1,245.44 points. Although there was a downward
correction in October, which made the stock market shrinking, many troubleshooting
integrations related to corporate bonds, real estate, public investment, and interest rate have
improved investor’s sentiment.
Figure 6: VN Index and HNX Index in 2023.
1243 1245
1171 1142
1120 1125 1102
1066 1057 1051 1049 1068

211 215 228 230 251 252 239 227 226

205 203 207

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

HNX Index VN Index

Source: FireAnt Dashboard: https://fireant.vn/dashboard

2. Sectoral Analysis.
2.1. Manufacturing Sector.
According to the General Statistics Office, the added value of industrial sector
increased 1.65% in nine months of 2023, in which the manufacturing sector was the most
contribution, with a growth of 1.98%. The index of industrial production (IIP) of the entire
industrial sector, which is an economic indicator used to measure the level of output in
manufacturing, electric, and gas industries (Kenton, 2021), was estimated to rise 1%
compared to the same period last year in 11 month of 2023. Additionally, the figure for
manufacturing industry was recorded to increase 1.1%, lower than the same period in 2022,
at 8,7%.

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BAC6005: Investment Management
Figure 7: Growth of monthly IIP in 2023, comparing to the same period last year.

Source: General Statistics Office of Vietnam.

The manufacturing sector experienced many difficulties and challenges in the early of
2023 due to the fall of global demand and the depression of large trading partners, such as the
US or countries from Euro zone. Some products with strengths in export for consumption like
wood products, textiles and clothing, or electronics were recorded to decline in orders and
turnover. This also led a number of companies, mostly in Ho Chi Minh City, to lay off
workers since there was a sharp decrease in orders (Barnes, 2023). Although there were still
lots of difficulties with a relatively high inflation, an increase in the cost of input and a
decrease in export value, the manufacturing sector recovered with positive signals in the latter
months of the year. The IIP of the sector gradually increased, growing 6.3% y-o-y in
November, which was the highest figure recorded in 2023. Especially, some products
witnessed a strong growth of IIP in this month, for instance, rubber and plastic, tobacco,
chemicals, furniture, or food.
Figure 8: IIP growth of selected production in Manufacturing sector in November and the
first 11 months of 2023.
30.0% 27.7% 28.5%

25.0%

20.0% 18.4%

15.0% 12.9%
11.8%
10.5% 10.7%
10.0% 8.6%
7.1% 6.2%
5.0%

0.0%
Rubber and Tobacco Chemicals Furniture Food
Plastic

in November in 11 months

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BAC6005: Investment Management
Source: General Statistics Office of Vietnam.
It was predicted that the production and trading situation of the manufacturing sector
might be improved in 2024. The forecast for the fourth-quarter of 2023 has stated that the
situation of the sector would be more optimistic since 76.3% of firms evaluated their
production process and business operation to be better and more stable than the third-quarter
(GeneralStatisticsOffice). The general balance index of the manufacturing sector of the
fourth-quarter is 15.4% compared to the previous quarter, in which the new orders balance
index is 14%. It is clear that the US market is the largest export market of Vietnam and the
over-accumulation of inventories of US retailers in 2022 has heavily influenced Vietnam’s
manufacturing firms (VNA, 2023). Therefore, the end of this phenomenon, which was
strongly believed, will be a good signal as there will be more potential order outputs for
factories in Vietnam.
However, the cost of materials and transportation were predicted to be set at a
relatively high level due to the effects of war and political tension. In fact, because of the
influence from Israel-Hamas war, many global shipping companies had to halted journeys
through Red Sea, which disrupts transportation through the Suez Canal, to avoid being
attacked by Yemeni rebels (Mnyanda, L.; Wright, R.; Sheppard, D., 2023). This can push
transportation cost higher and disrupt the global logistic since the Suez Canal is a significant
route for goods from Asia and Middle East to Europe. Additionally, the price of outputs was
expected to stay unchanged in order to attract new orders. Therefore, it creates several
challenges for the manufacturing firms in production and business operation.
2.2. Retail Trading Sector.
In the third-quarter of 2023, the service sector experienced a robust growth in the
value added, contributing positively to the economic development. During the period, the
retail sector took a large portion in the service sector, increasing 8.04% y-o-y. Additionally,
the total value of retail sales for goods and services was 1,550.2 trillion VND, which was
higher 1.9% than the previous quarter and 7.3% than the same period last year. Overall, the
first 9 months of 2023 witnessed an increase of 9.7% in the retail trading sector, with a total
sales of 4,567.8 trillion VND. The sector continued to keep a robust growth in October and
November, with the total sales of 552.7 trillion VND in November increased 10.1% y-o-y.
This pushed the value of total retail sales for 11 months of 2023 to 5,667 trillion VND,
increasing 9.6% y-o-y.
Figure 9: Growth of Vietnam’s retail sales year over year in the 11 months of 2023.

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BAC6005: Investment Management
 25.0%

20.0%
20.0%

15.0%
13.2% 13.4%
11.5% 11.5%
10.1%
10.0%
7.6% 7.5% 7.0%
6.5% 7.1%
5.0%

0.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Source: General Statistics Office of Vietnam.

In the first 11 months, the retail sales of goods only dominated the figure for service,
with 4,420 trillion VND, taking 78% and increasing 8.6% y-o-y. To be more specific,
educational, and cultural products increased 14.7%, food consumption increased 11.4%,
clothing increased 7.6%, household consumption and furniture increased 6.3% (Vu, 2023).
However, there was a decline of 3.3% in transportation (excluding cars) during the period.
Figure 10: Increase in total retail sales of selected products in the first 11 months of 2023.

20.0%

14.7%
15.0%
11.4%
10.0%
7.6%
6.3%
5.0%

0.0%

-5.0% -3.3%
Educational and Food Clothing Household Transportation
Cultural consumption (excluding car)
and Furniture

Source: General Statistics Office of Vietnam.

The retail market was forecasted to be more positive in the late of 2023, although the
recovery was considerably slow and uncertain. According to a survey, two-third of retail
firms expected the situation of the market would be improved in the last-half of 2023
(Nguyen, 2023). It is true that the stimulation from supportive policies of the government
plays a vital role in this optimistic orientation. In fact, the recent decrease of interest rate has
gradually recovered the consumer credit and reduced the debt pressure of retail businesses
(Nguyen, 2023). Experts also predict that the retail sales may increase in the last few months
of the year as the rise in demand of customers for New Year events and promotion in
disbursements of public investment (VNA, 2023). Many firms have recognized this and

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BAC6005: Investment Management
planned several incentive strategies, such as discounted programs, selling in multi-channels,
to serve the expected demand (VietnamReport, 2023). The easing of CPI in large export
markets like the US was also a good signal for the sector since it would bring more export
orders for domestic firms.
In contrast, some analysts remained cautious perspective about the retail market. The
rising of intensive competition among retailers and the tightening of money spent by
customers are stated to be the challenges for the retail trading sector in the late 2023. In fact,
a survey of PwC showed that 62% of customers expected to cut their spending for non-
essential goods, while 54% said they would spend less on luxury items (Vietnamnews, 2023).
Because of this, the demand for luxury goods and non-essentials would be dampened, leading
to a more competitive market for these products. Additionally, the global headwinds and
disruptions in logistics due to war are also the major concerns for the sector.

IV. PORTFOLIO SELECTION.

After several analysis, there are 2 stocks that are recommended for the client, which
are Son La Sugar JSC (SLS) in the manufacturing sector and Mobile World Investment Corp
(MWG) in the retail trading sector.
1. Son La Sugar JSC (SLS).
1.1. General Information about SLS.
Son La Sugar JSC, which was the predecessor of the Son La Sugar Factory, was
founded in 1997 and was under the administration of Son La Provincial People’s Committee.
In 2008, the firm was converted into a joint-stock company with a charter capital of 50 billion
VND. The firm was listed on Hanoi Stock Exchange (HNX) on September 2012 and had its
first trade on October 2012. Currently, the company has four factories and one office in
Hanoi, with a large product distribution network in Vietnam.
The company operates in the manufacturing industry, within the food manufacturing
sector. The main business operation of SLS is the sugar industry, which manufactures and
trades sugar products. Besides, the company also produces alcohol and dental products, and
alcoholic and non-alcoholic drinks. Processing of agricultural products and commercial
trading are also parts of the firm’s business. Additionally, SLS has the second largest
capitalization in the sugar industry in Vietnam, with 1,384 billion VND.
According to the financial statements for the first-quarter of the fiscal year 2023-2024
(from 1 July 2023 to 30 September 2023), SLS has recorded 431 billion VND in revenue,
increasing 26% y-o-y, and 135 billion of gross profit. The financing cost of the firm was
reduced 77%, while the cost of sales decreased approximately 9%. This resulted in the net
profit of 119 billion VND, 47% higher than the same period last year and accounting for 87%
of net profit for the year. The strong breakthrough of the SLS stemmed from concerns about
scarce supply of food, which enormously pushed sugar prices to the highest level in over a
decade (Tran, 2023). In the new season, the firm prudently expects the revenue might slightly
decrease due to the lack of supplies for raw materials. However, the domestic price of sugar
is estimated to remain relatively high in the near future and, therefore, the business operation
of the SLS is expected to be continuously stable.

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BAC6005: Investment Management
 In the stock market, the value of SLS price grew significantly from 2019, increasing
229.64% over the last 5 years. It can be seen that the figure for SLS overtakes HNX30 by a
wide margin. Although the stock experienced a decline in price recently, it still remained in
the top stocks with the highest price in the market.
Figure 11: Comparation of 5-year stock price between SLS and HNX30.

Source: Vietstock Finance.

1.2. Valuation of SLS.
SLS has had a stable dividend payment by cash from 2014 to 2023, with a variable
growth rate, therefore, the dividend discount model will be appropriately used to evaluate
the intrinsic value of SLS. However, the valuation will only assess the period from 2019 to
2023 of the fiscal year (from 1 Jul to 30 Jun) as it is more precise to predict the value of the
stock. The ROE has been positive over the past 5 years, notably, the figure for 2019 was
lower than the others due to the influences of the pandemic. Moreover, the retention rate and
DPS growth rate of 2023 was the highest, with 81.58% and 50% respectively.
Table 1: SLS’s ROE, DPS and Retention rate.

Date ROE DPS Retention rate DPS Growth

2018 25.8% 3,500 VND 57.39% ---
2019 12.88% 5,000 VND 52.38% 42.86%
2020 22.19% 7,000 VND 58.82% 40%
2021 26.68% 8,000 VND 58.54% 14%
2022 26.49% 10,000 VND 58.51% 25%
2023 53.91% 15,000 VND 81.58% 50%
Source: Vietstock Finance and Aurthor’s calculations.

The Average Dividend Growth Rate: g2019−2023=¿ 34.43%

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BAC6005: Investment Management
The Calculation for The Next 5 Years Dividend:
 DP S 2024=DP S 2023∗( 1+ g2019−2023 )=15,000∗( 1+34.43 % )=20,164
 DP S 2025=DP S 2024∗( 1+ g2019−2023 )=20,164∗( 1+34.43 % )=27,107
 DP S 2026=DP S 2025∗( 1+ g 2019−2023 ) =27,107∗( 1+34.43 % )=36,439
 DP S 2027=DP S 2026∗( 1+g 2019−2023 )=36,439∗( 1+34.43 % )=48,984
 DP S 2028=DP S 2027∗( 1+ g 2019−2023 ) =48,984∗( 1+ 34.43 % )=65,849

The Required Rate of Return:

k =r f + β∗[ E ( r m )−r f ]=2.281% +0.35∗( 47 %−2.281% )=17.93 %

With:
 Risk-free rate (Vietnam government bond 10-year yield) : r f =2.281 %
(Source: WorldGovernmentBond on 20 December 2023)
 Beta: β=0.35 (Source: Vietstock Finance)
 Expected Market Return: The expected market return will be the average growth of
HNX from 2019 to 2023.
Table 2: HNXINDEX from 2019 to 2023.

Year 2019 2020 2021 2022 2023

HNXINDE 102.56 172.32 457.44 210.74 228.45

X
Growth rate --- 68.09% 165.46% -53.93% 8.4%

Source: Vietstock Finance.

68.09 %+165.46 %−53.93 %+8.4 %
E ( r m )= =47 %
4
The Terminal Growth Rate:
 Economic Model: As the company mostly operates in Vietnam market, the terminal
growth will be set at the average GDP growth of Vietnam from 1997 to 2022.
g=6.58 % (Source: Author’s calculation)
 ROE Model: g=RO E2023∗Retention rat e2023 =53.91 %∗81.58 %=43.98 %
The DDM Valuation:
DP S2024 DP S2025 DP S2026 DP S2027 DP S2028 DP S2028∗(1+ g)
PV = + + + + +
(1+ k ) ( 1+k )
2
( 1+k )
3
( 1+k )
4
( 1+k )
5
( k−g )( 1+k )
5

Since the growth rate based on ROE model is higher than the required rate of return,
the growth rate of economic model will be used only.
20,164 27,107 36,439 48,984 65,849 65,849∗(1+6.58 %)
PV = + + + + +
(1+17.93 % ) ( 1+ 17.93 % ) ( 1+17.93 % ) ( 1+17.93 % ) ( 1+17.93 % ) ( 17.93 %−6.58 % )( 1+17.93
2 3 4 5

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BAC6005: Investment Management
 = 384,087 VND
As the intrinsic value of SLS is 384,087 VND, which is higher than the market price
142,900 VND on 20 December 2023, the stock is undervalued. Additionally, with the
potential of the food manufacturing sector, SLS is highly recommended for the client.

( Ending price−Beginning price )+ Dividend

The Return of SLS: r average =
Beginning price
Table 3: Return of SLS from 2019 to 2023.

Year 2019 2020 2021 2022 2023

Return 14.5% 108.7% 137.4% -9% 43.8%

Average 59.1%

Source: Author’s calculations.

The Standard Deviation of SLS:

√ √
2
5
( r t −r average ) 15451.91
S= ∑ n−1
=
5−1
=√ 3862.98=62.15 %
t =1

Table 4: The standard deviation calculation for SLS.

Year Return (r t ) Average return r t −r average 2

( r t −r average )
(r average)
2019 14.5% 59.1% -44.6% 1989.16%

2020 108.7% 59.1% 49.6% 2460.16%

2021 137.4% 59.1% 78.3% 6130.89%

2022 -9% 59.1% -68.1% 4637.61%

2023 43.8% 59.1% -15.3% 234.09%

Sum = 15451.91%

Source: Author’s calculations.

2. Mobile World Investment Corp (MWG).
2.1. General Information about MWG.
Mobile World Investment Corp was founded in 2014 as a limited company. The
company expanded quickly in Ho Chi Minh City, Hanoi, and Da Nang over the period of 3
years and transferred to a joint stock company in 2007. On 7 July 2014, MWG was listed on
HOSE market and took its first trade on 14 July 2014. From that time, the firm grew

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BAC6005: Investment Management
significantly, with 4,754 billion VND of charter capital invested. Currently, there are more
than 213 shops developed by MWG in Vietnam.
The firm operates in the retail trading sector, with the main product and service relate
to trading electronic and communication equipment and components. The company also
expands to other markets with a variety of products, such as food and consumer goods.
Additionally, MWG is currently running a chain of stores, for instance, AVA World, AVA
Kids, with brand-new products about fashion, sports, mother and baby, jewelry, bicycles. In
the retail sector, MWG has the largest capitalization, at 62 trillion VND of 20 December
2023.
During the year 2022, MWG experienced a relatively high net profit, at 4,102 billion
VND, only lower than 2021 over the period of 5 years (2018-2002). Turning to 2023, the
retail sector has faced the global headwinds and uncertainties as can be seen from Figure 9.
The total sales of the sector have decreased vastly from the earlier in the year. MWG was not
an exception since the company faced several difficulties, which led to a fall in revenue.
According to the third-quarter report in 2023, MWG’s revenue was recorded at 30,521 billion
VND, which was higher than the previous quarter but lower than the same period last year.
More importantly, the net profit of the firm was only 39 billion VND, which decreased 95.7%
compared to the same period in 2022. However, it was stated that the end of the third quarter
of 2023 will be a suitable starting point for retail businesses to make a breakthrough after
having enough time to adopt to supportive policies of the government (Tran, 2023). The
process of reforming Bach Hoa Xanh also has many positive signs for MWG, proving an
optimistic future for the firm.
In the stock market, the value of MWG’s price increased gradually over the past 5
years (2019-2023). The stock had an increase of 53.84% in its value, 28.78% higher than the
figure for VN30. Although there was a fluctuation in the period from mid-2022 until now,
MWG had experienced an impressive climb from 2020 to 2022, reaching the peak of 78,879
VND in 2022.
Figure 12: Comparation of 5-year stock price between MWG and VN30.

Source: Vietstock Finance.

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BAC6005: Investment Management
 2.2. Valuation of MWG.
From 2014, MWG had a frequent dividend payment mixed by cash and share. Taking
the period of 5-year starting from 2019, the firm has paid dividend 7 times to investors. In
fact, 2 out of 7 times are paid by both cash and shares in 2021 and 2022, which were the 2
most profitable years during the period. Therefore, the dividend discount model may not be
appropriate to evaluate the intrinsic value of MWG. Instead, the price multiples will be used
to calculate the fair value of MWG.
The Price Multiples Valuation:
 Price to Earning (P/E): The average P/E of the sector is 17.96 and the EPS of MWG
in 2022 is 3646 (Simplize).
F V MWG=EP S 2022∗P E sector =3646∗17.96=65,482
 Dividend Yield (DY): The average DY of the sector is 4.91%, while the DPS of
MWG in 2022 is 1000 VND (Simplize)
DPS 1000
F V MWG= = =20,367
D Y sector 4.91 %
 Price to Book-value (P/B): The book value per share of MWG is 15,911 as 20
December 2023 and the P/B of the sector is 2.78 (Simplize).
F V MWG=BPS∗P Bsector =15,911∗2.78=44,233
 Price to Sales (P/S): The price to sale of MWG is 0.47 and the market price of MWG
was 42,400 VND as 20 December 2023, therefore, the sales per share of MWG is:
Market price 42,400
SPS= = =90,213
PS 0.47
The average P/S of the sector is 0.59 (Vietstock Finance).
F V MWG=SPS∗P S sector =90,213∗0.59=53,226
The fair value of MWG will be averaged by the weighted mean, which is equally
distributed by all metrics.
Table 5: Weighted mean calculation for MWG’s fair value.

Weight Price Multiple Fair Value W*FVS

Suggested
25% P/E 65,482 VND 16,370.5

25% DY 20,367 VND 5,091.75

25% P/B 44,233 VND 11,058.25

25% P/S 53,226 VND 13,306.5

100% Weighted Mean 45,827

Source: Author’s calculations.

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BAC6005: Investment Management
 As the intrinsic value of MWG is 45,827, which is higher than the market price
42,400 of 20 December 2023, therefore, the stock is undervalued. Because of this, MWG is
considered to be a potential investment for the client.
( Ending price−Beginning price )+ Dividend
The Return of MWG: r average =
Beginning price

Table 6: Return of MWG from 2019 to 2023.

Year 2019 2020 2021 2022 2023

Return 40.9% 3.1% 67.6% -27% -0.9%

Average 16.8%

Source: Author’s calculations.

The Standard Deviation of MWG:

√ √
2
5
( r t −r average ) 5580.87
S= ∑ n−1
=
5−1
= √1395.22=37.35 %
t =1

Table 7: The standard deviation calculation for MWG.

Year Return (r t ) Average return r t −r average 2

( r t −r average )
(r average)
2019 40.9% 16.8% 24.1% 580.81%

2020 3.1% 16.8% -13.7% 187.69%

2021 67.6% 16.8% 50.8% 2580.64%

2022 -27% 16.8% -43.8% 1918.44%

2023 -0.9% 16.8% -17.7% 313.29%

Sum = 5580.87%

Source: Author’s calculations.

3. Portfolio Management.
It is essential to calculate the correlation coefficient of return for SLS and MWG.
Table 8: Correlation coefficient calculation for SLS and MWG.

Year r SLS r MWG

2019 14.5% 40.9%

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BAC6005: Investment Management
 2020 108.7% 3.1%

2021 137.4% 67.6%

2022 -9% -27%

2023 43.8% -0.9%

Correlation Coefficient (ρ SLS ; MWG) 0.59

Source: Author’s calculations.

The correlation of the portfolio is 0.59, which means some risks are eliminated as the
correlation coefficient is less than 1 and more than 0. Based on the correlation coefficient for
SLS and MWG, with the return and standard deviation of each stock, the portfolio can be
divided into several options for the client.
The Return of Portfolio:
r p =( w SLS ¿ r average− SLS ) +( w MWG∗r average− MWG)

The Standard Deviation of Portfolio:

S p= √ w2SLS S2SLS +w 2MWG S2MWG +2 w SLS w MWG ρSLS ; MWG S SLS S MWG
With:
 S SLS=62.15 %
 S MWG=37.35 %
 ρ SLS ; MWG=0.59
Table 9: Portfolio selection for the client.

Portfolio Weight Portfolio Return Portfolio

Standard
Deviation
w SLS w MWG r average −SLS=59.1 % r average −MWG =16.8 %

1.0 0.0 ( 1.0∗59.1 % ) + ( 0.0∗16.8 % )=59.1 % 62.15%

0.9 0.1 ( 0.9∗59.1 % ) + ( 0.1∗16.8 % )=54.87 % 58.22%
0.8 0.2 ( 0.8∗59.1 % ) + ( 0.2∗16.8 % )=50.64 % 54.46%
0.7 0.3 ( 0.7∗59.1 % )+ ( 0.3∗16.8 % )=46.41 % 50.92%
0.6 0.4 ( 0.6∗59.1 % )+ ( 0.4∗16.8 % )=42.18 % 47.65%
0.5 0.5 ( 0.5∗59.1 % ) + ( 0.5∗16.8 % )=37.95 % 44.71%
0.4 0.6 ( 0.4∗59.1 % ) + ( 0.6∗16.8 % )=33.72 % 42.16%
0.3 0.7 ( 0.3∗59.1 % ) + ( 0.7∗16.8 % )=29.49 % 40.08%

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BAC6005: Investment Management
 0.2 0.8 ( 0.2∗59.1 % ) + ( 0.8∗16.8 % )=25.26 % 38.54%
0.1 0.9 ( 0.1∗59.1 % ) + ( 0.9∗16.8 % )=21.03 % 37.62%
0.0 1.0 ( 0.0∗59.1 % ) + ( 1.0∗16.8 % )=16.8 % 37.35%
Source: Author’s calculations.
After several calculations, it can be seen that the portfolio of SLS and MWG is quite
risky, with the risk or standard deviation higher than return in all scenarios. In this case, the
client is known as a risk averse and prefers a portfolio with higher return for high-risk
investment or an investment with a reasonable risk. Therefore, the option, in which SLS takes
60% and MWG takes 40% is suggested to the client since the risk is under 50% while the
return of 42.18% is an optimal figure. Subsequently, the client should invest 600 million
VND in SLS’s stock and 400 million in MWG’s stock.

V. CONCLUSION.
In conclusion, the assignment has assessed the profile of the client and considered him
as a risk-averse. Before evaluating selected stocks, the assignment has provided an overall
analysis of Vietnam’s economy, both for pre-pandemic and post-pandemic, and a detailed
analysis for manufacturing and retail sectors. Overall, the economy has a potential growth in
the long-run with various supportive factors. Additionally, both manufacturing and retail
trading sectors are facing many challenges due to the global headwinds. However, they are
expected to gradually recover in the near future as the Vietnam economic situation is
experiencing positive signals.
There are 2 stocks that are suggested to the client, which are SLS and MWG. Both
stocks have potential for significant return, especially the SLS. However, the portfolio of
these two is considerably risky. After many calculations, the assignment suggested the client
to invest 600 million VND in SLS and 400 million VND in MWG. The portfolio is believed
to be an optimal choice for the risk and return preference of the client.
Word Counts: 4478 (Excluding for Tables and Figures).

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