VietNam : Annual Report

Our Purpose

Our Vision

Capturing the growth of Vietnam through an actively managed, high-conviction portfolio of companies.

Owning a portfolio of companies with the potential to double their underlying earnings over the next four to five years. Active stock selection balanced between high-growthsmall-and-medium companies and best-in-class blue chips. Seeking companies that can benefit from enhanced valuations by following a trajectory of better Environmental, Social, Governance practices.

Financial Highlights

• Total NAV return was -5.7%
• Outperformed VNAS index by 4.3% during the year
• Outperformed VNAS index on 1, 3, 5 and 10 year basis

Operational Highlights

• Fund is invested in 26 positions
• Top-tenpositions account for 62.4% of the NAV
• Fund received two five stars in latest UN PRI Transparency Report

Annual Report 2023

Company Overview

Focused Investment

Approach

Investment Manager

Dynam Capital Ltd

Vietnam specialist, regulated by the Guernsey Financial Services Commission. Partner- owned business whose sole focus is asset management. Appointed Investment Manager on 16 July 2018.

What Dynam Does:

• Top-down& bottom-up research driven fundamental analysis.
• Active engagement with portfolio companies on ESG.
• Long-terminvestment horizon.

Strategic Report

Portfolio of 26 companies with 62.4% in top-ten positions. The portfolio has a price-to-earnings valuation of circa 8x and an earnings growth forecast of circa 17% for 2024.

The Company

Vietnam Holding

Premium Listed London Investment Company established in 2006. Seeks to achieve long-term capital appreciation by investing in a diversified portfolio of companies in Vietnam that have high growth potential at an attractive valuation.

What Vietnam Holding Does:

• Capturing the growth of Vietnam through long term investment in an actively managed, high-conviction portfolio of companies.
• Protect shareholder interests by aspiring to the highest standards of corporate governance at both fund & portfolio level.

Summary Information

The Company

VietNam Holding Limited (the "Company", the "Fund" or "VNH") is a closed-end investment company that was incorporated in the Cayman Islands on 20 April 2006 as an exempted company with limited liability under registration number 166182. On 25 February 2019, the Company, via a process of cross-border continuance, transferred its legal domicile from the Cayman Islands to Guernsey and was registered as a closed-ended company limited by shares incorporated in Guernsey with registered number 66090. The Shares were admitted to trading on AIM in June 2006 and changed to a Premium Listing on the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange on 8 March 2019. The Company also listed on the Official List of The International Stock Exchange on 8 March 2019. The Company has an unlimited life with a continuation vote in 2023.

Investment Objective

The Company's investment objective is to achieve long- term capital appreciation by investing in a diversified portfolio of companies that have high growth potential at an attractive valuation.

Investment Policy

The Company attempts to achieve its investment objective by investing in the securities of publicly traded companies in Vietnam, and in the securities of foreign companies if a majority of their assets and/or operations are based in Vietnam. The Company may invest in equity securities or securities that have equity features, such as bonds that are convertible into equity.

The Company may invest in listed or unlisted securities, either on the Vietnamese stock exchanges, through purchases on the OTC Market, or through privately negotiated deals.

The Company may invest its available cash in the Vietnamese domestic bond market as well as in international bonds issued by Vietnamese entities.

The Company may utilise derivatives contracts for hedging purposes and for efficient portfolio management but will not utilise derivatives for investment purposes.

The Company does not intend to take control of any company or entity in which it has directly or indirectly invested (the "investee company") or to take an active management role in any such company. However, Dynam Capital, Ltd. ("Dynam Capital"), (the "Investment

Manager") may appoint one of its directors, employees or other appointees to join the board of an Investee Company and/or may provide certain forms of assistance to such company, subject to prior approval by the VNH Board.

The Company integrates environmental, social and corporate governance ("ESG") factors into its investment analysis and decision-making process. Through its Investment Manager, the Company actively incorporates ESG considerations into its ownership policies and practices and engages investee companies in pursuit of appropriate disclosure and the improvement of material issues.

The Company may invest:

• up to 25% of its Net Asset Value ("NAV") (at the time of investment) in companies with shares traded outside of Vietnam if a majority of their assets and/or operations are based in Vietnam;
• up to 20% of its NAV (at the time of investment) in direct private equity investments; and
• up to 20% of its NAV (at the time of investment) in other listed investment funds and holding companies which have the majority of their assets in Vietnam.

Borrowing Policy

The Company is permitted to borrow money and to grant security over its assets provided that such borrowings do not exceed 25% of the latest available NAV of the Company at the time of the borrowing unless the Shareholders in general meeting otherwise determine by ordinary resolution.

Investment Restrictions and Diversification

The Company will adhere to the general principle of risk diversification in respect of its investments and will observe the following investment restrictions:

• the Company will not invest more than 10% of its NAV (at the time of investment) in the shares of a single Investee Company;
• the Company will not invest more than 30% of its NAV (at the time of investment) in any one sector;
• the Company will not invest directly in real estate or real estate development projects, but may invest in companies which have a large real estate component, if their shares are listed or are traded on the OTC Market; and
• the Company will not invest in any closed-ended investment fund unless the price of such investment fund is at a discount of at least 10% to such investment fund's NAV (at the time of investment).

Chairman's Statement

Hiroshi Funaki - Chairman

Dear Shareholder,

I am pleased to present the Annual Report for VietNam Holding Limited for the twelve-month period ending 30 June 2023.

Although this has been a turbulent year globally, including in Vietnam, I am pleased to report that the Fund has once again outperformed peers and the Vietnam All Share Index ("VNAS").

I wrote in the interim report earlier this year about many of the reasons for the market disturbances. Some were global, however, some also were very local. As the Investment Manager notes in his report, there is often a 'game of two halves' going on, and this year has been no exception.

In the first six months of the financial year, the Company's Net Asset Value ("NAV") per share declined by 16.8%, but in the second half of the year (from 1 January 2023 until 30 June 2023) rose by 13.3%. The total NAV return was still negative, at -5.7%, but this was 4.3% better than the VNAS.

The Company's Total Assets were USD 116,191,137 at 30 June 2023, a decrease of 10.1% from USD 129,177,449 at 30 June 2022. Total Comprehensive loss was USD 8,622,089 at 30 June 2023 compared with a loss of USD 7,719,310 in the corresponding period in 2022. Although VNH's NAV has declined in absolute numbers, the focus, active management, and nimble performance of the Investment Manager have led to a significant relative outperformance against the market as a whole, as well as most of its peers.

The share price has fluctuated throughout the year, reaching a year high of GBP 3.375 per share and a low of GBP 2.21 per share. Contributing factors to the ups and downs include the NAV's movements, the GBP/USD exchange rate and the discount volatility.

Market and Opportunity

The Board visited Vietnam in March of this year and sat down with the Investment Manager to go through their strategy, meet with the research team and also to review in depth with the team one of the top five holdings.

We came away from the meeting feeling confident about several fronts. Firstly, Vietnam remains a dynamic investment opportunity. Despite periods of volatility and market depression, the underlying macro story and potential for the country and its companies are both tremendous and distinctive. Secondly, its public markets offer a rare mix of growth that is not based on financial gearing and is at modest valuation levels and indeed at historical lows. Thirdly the structural improvements in liquidity will continue this year with more enhancements made to the stock market infrastructure, which also makes us more convinced that it is only a matter of time before the market is considered for an upgrade to Emerging Market Status. Finally, Dynam Capital, our Investment Manager has proven themselves to be a nimble, focused team, punching above their weight, and delivering superior risk adjusted returns in both financial and environmental, social and governance ("ESG") terms.

Progress over past 5 years

When we appointed Dynam Capital five years ago, we set out three main objectives. Firstly, to provide solid risk adjusted returns for shareholders. Secondly, to build on and develop an ESG centered investment strategy fit for purpose. Thirdly, to use all means possible to narrow the discount between the Company's share price and NAV. In addition, we also set forth a dedicated marketing plan to broaden the shareholder base, in an attempt to increase the visibility of the Fund and its liquidity and ultimately attract retail and wealth management platforms, which we felt would be natural buyers of a focused, yet niche investment company structure.

I report on each of these below:

Risk Adjusted Returns

Performance

In the twelve months to 30 June 2023 the Company's NAV per share declined by 5.7%, while the market as a whole, as measured by the VNAS, declined by 10.0%. In the first six months of the financial year the NAV per share fell by 16.8%, against an index fall of 20.5%, and in the second six months the Company's NAV rose by 13.3% in line with the index, which rose by 13.2%. At 30 June 2023, the Company has outperformed the VNAS on 1, 3, 5 and 10-year measures.

Performance monitoring remains a key focus of the Board and we engage closely with our Investment Manager in this respect through monthly conference calls as well as quarterly presentations. A more detailed account of the Company's annual performance is also provided in the Investment Manager's Report.

ESG Strategy

Responsible Investing and Sustainability Reporting

The Investment Manager and the Board have been committed to responsible investing and aligned approach to ESG years

Annual Report 2023

before the mainstream global investing community moved in this direction. The Company has been a signatory to the United Nations' Principles on Responsible Investing ("PRI") since 2009, and in its most recent PRI assessment scored two 'five-stars' reflecting our efforts to contribute to responsible investing in Vietnam in a meaningful way.

The Company and the Investment Manager were sponsors of the inaugural ESG Investing Conference held in Ho Chi Minh City on 31 May and 1 June 2023. We helped the organisers deliver two full days of content to a packed audience of close to 350 participants.

We also have been measuring the carbon footprint of both the Company and the portfolio for several years, and this year's findings are in the Sustainability Report. It is worth noting that unlike in previous years, when the portfolio had a significantly lower carbon footprint than the market as a whole, at this reporting date, our footprint is slightly higher than the index. The key reason for this is that we have backed a company that is in transition - Petro Vietnam Services ("PVS") which has one of the country's largest fleets of specialised offshore supply vessels, historically used to implement and maintain oil and gas infrastructure. PVS has stated its ambition to become one of the leading service providers in renewable energy - specifically onshore and offshore wind energy. Over time, we believe PVS's transition to clean energy will result in a lower overall carbon impact, even if it distorts our reported carbon footprint for the reporting period.

Discount

During the year the Company's shares traded at an average discount to NAV of 15.7%. The Board seeks to manage the discount through regular share buybacks, as detailed below. In addition to delivering a strong relative performance of the Company's portfolio, the Investment Manager, in close cooperation with the Board and the Company's broker and marketing agent, has maintained an active investor relations program. For much of the year the discount has been the narrowest of the three London listed investment companies focused on Vietnam. At the time of writing the discount was 16.4%.

Marketing

With the help of the Investment Manager, Dynam Capital, the Board has further developed the Company's marketing activity throughout the year to help narrow the discount, improve liquidity in the Company's shares, and widen our Shareholder base.

The Investment Manager has been actively promoting the Company and along with our broker and sales partners has conducted roadshows, topical seminars, podcasts, and several webinars. Articles produced by the Investment Manager have also appeared in trade media, illustrating some of our core investment themes, and other exciting developments

Strategic Report

in the market. Our analysis shows that the marketing and communications efforts continue to bear fruit. We are delighted to see a greater number of wealth management platforms on the share register having also seen the overall mix of investors broaden considerably over recent years. The Investment Manager has maintained a strong social media presence for the Company as well. We welcome all Shareholders who may be reading this Annual Report for the first time and thank all existing holders for their ongoing support.

Share Buybacks

The Board has a mandate to authorise the purchase up to 14.99% of the Company's shares each year in the open market at prices below NAV per share, and this was renewed at the AGM on 1 November 2022. In the year from 1 July 2022 to 30 June 2023, the Company bought back 1,500,563 shares (representing 5.1% of the shares outstanding at 1 July 2022) at a weighted average discount of 15.2%. This resulted in a 0.78% accretion to NAV per share. From September 2017, when the current Board was appointed, through until 30 June 2023, the Company has bought back 14.82 million shares at a weighted average discount of -15.4%. This represents a 3.4% accretion to NAV per share.

Continuation vote

As you will know, at the AGM in 2018 we told shareholders we would bring a five-yearly continuation vote to the 2023 AGM, which will take place this November.

As detailed above, we believe the market opportunity for the Fund remains, despite the Company's relatively modest size, and that the Investment Manager is doing an excellent job in delivering on the Company's investment objectives.

The Board (and Dynam Capital) maintain a regular dialogue with shareholders and believe that many share our view that the Company should continue for a further five years. A resolution to that effect will be put to shareholders at the Company's AGM later this year. As such, the Directors will be recommending that shareholders vote to approve the continuation of the Company for a further five years and we propose a new continuation vote to be held in November 2028.

On behalf of the Board, I would like to extend a further thank- you to shareholders for your ongoing support throughout the past year. While the global mood is gloomy, we believe Vietnam remains a bright spot - an attractive investment destination with good prospects for further growth over the years to come.

Hiroshi Funaki

Chairman

VietNam Holding Limited

13 October 2023

This year marks the 17th anniversary of the Company and its listing in London1. Over this time, the Company, which is just six years younger than Vietnam's stock market, has seen Vietnam grow dramatically not only in absolute terms, but in stature and visibility. While the country's stock markets have also grown at an average annual rate of 4%, VNH has outperformed the market on a 1, 3, 5 and 10-year basis. Nevertheless, the market can be volatile and there have often been periods, lasting 6 to 12 months of significant weakness in the equity markets. The past twelve months was, as with previous annual periods, a 'game of two halves'.

From 1 July to 31 December 2022, Vietnam's stock market experienced a sharp decline. Markets are always fickle friends, and in Vietnam, they are often also hostage to the mood of the country's seven million or so domestic retail investors. That mood darkened in Q4 last year following the arrests of some high-profile property entrepreneurs, which brought the bond and real estate markets to an abrupt halt in the face of uncertainties over issuing bonds and refinancing existing obligations. Several large, listed property groups faced liquidity and solvency issues, and were forced to start the lengthy process of restructuring their borrowings from local and international investors. Towards the end of December, two deputy prime ministers were removed from office, and in January 2023, the President stepped down, for failure to resign in the mistakes of some government officials, and in the wake of a scandals relating to PPE procurement and COVID-19 repatriation flights.

The mood has brightened somewhat in more recent months. Interest rate cuts, bottom fishing by local and regional investors, and a returning 'sense of order', despite the global disorder, have all helped the stock market to post six-month gains of around 13.2% at the end of June 2023.

This 'sense of order' includes ever increasing levels of foreign direct investment ("FDI") and a record trade surplus, albeit because of imports falling faster than exports. Vietnam has a very open trade-based economy, and weaker global demand for technology goods - computers, tablets, mobile phones and accessories - has naturally hit its usually high export growth. This also has had a knock-on effect on consumer confidence.

The record USD 12.25 billion trade surplus in the first half of calendar 2023 and rising levels of disbursed FDI have enabled the country to keep a relatively stable foreign- exchange balance, stemming off the weakness in the Vietnam Dong seen last year.

Inflation has also remained under control. Unlike in Europe or the US, Vietnam has a lower energy exposure in its cost of goods basket: half of its energy mix is domestically sourced, including a reliance on hydropower.

Portfolio

Investors in the Company should recognise the value of having a closed-end fund structure. This means that we do not need to ordinarily maintain liquidity for the sake of funding redemptions. We have a concentrated portfolio that allows us to take conviction positions in core companies. For example, our top-holding, FPT, has averaged between 10-15% of the portfolio over the past five years. This would not be possible in a regulated open-end fund (UCITS for example). Our top ten positions account for 62% of the portfolio and our top 5 for 41%.

1 The Company was initially listed on AIM in July 2006 and then moved to the premium segment of the main board of the London Stock Exchange in March 2019.

The level of concentration means that we need to be focused on finding robust companies, with strong positions in their sectors and industries, and with the ability to compound their earnings over a five to ten year period. As an example of this FPT has a compound annual growth rate in earnings of 21.5% in the last 3 years.

We use our size to our advantage. We navigate nimbly around the market capitalisation opportunity set in Vietnam. Although our median portfolio market capitalisation remains at around USD 1bn, a decrease of 6% over the year, we are uniquely size agnostic.

Phu Nhuan Jewelry JSC ("PNJ"), for example, was a USD 100m market cap company when the Company first invested over a decade ago - putting it at the small-to- medium category. As at 31 August 2023, it has a market capitalisation equivalent to USD 1.096bn, making it a 'large cap' company.

We do not have to sell companies when they become large, and nor do we have to reduce the smaller companies on liquidity grounds. Our portfolio philosophy is an active one: our active weight has been around 70% over the past five years, and our portfolio turnover has been in the range of 30 to 40%.

Performance

As described in the interim report as of 31 December 2022, the first six months of the financial year saw significant volatility in the Vietnamese stock market. During this period, the NAV per share fell by 16.8%, outperforming the Vietnam All Share Index's ("VNAS") decline of 20.5%. Towards the end of the second half of the financial year, the equity markets themselves started to recover, rising by 13.2% as of June 2023 with the Company's NAV per share similarly finishing the period up.

At 30 June 2023, the NAV per share declined by 5.7% for the full financial year in accordance with the drop reported for the previous financial year. Nonetheless, unlike this time last year, we are optimistic about the second half of calendar 2023. The Company continues to outperform its peers, and has also outperformed the VNAS on a 1, 3, 5 and 10-year basis. The Company's share price still fell by 10% during the financial year due to a combination of the 5.7% decline in NAV per share and a slightly wider discount between the share price and the NAV.

Liquidity

Portfolio liquidity remains robust, and we estimate that over 95% of the portfolio could be liquidated in less than 30 days.

The portfolio's size and nimbleness as per our style of investment management means that we can navigate across the spectrum of company sizes, and we believe this has contributed to the outperformance of the Company versus the index and our peers. We have been able to take profit in sectors that surged last year and move swiftly as market forces and economic mood changes.

Although the Fund's investment policy allows up to 20% of the assets to be invested in unlisted or pre-IPO 'private equity' type deals, the Fund is currently only invested in listed securities, and all are valued as 'Level 1' - see Valuation in the notes to the Financial Statements page

65. In 2018 we increased the exposure to some pre-IPO opportunities, including making a three-year convertible loan to a logistics company, but following the complete return of that investment, we have not made any further such investments. Given the forthcoming continuation vote, we did not want to set false expectations in the minds of potential investee companies or do the Board or shareholders in the Company a disservice by tying their hands to a significant illiquid position should the continuation vote not pass.

As of 30 June 2023, the portfolio has about 1.5% of NAV in cash.

Positioning and Core Themes

Our main investment approach remains focused on industrialisation (best-in-class manufacturers, international logistics); urbanisation (purposeful real estate, transportation, clean energy, and clean water); and domestic consumption and its enablers (sustainable retail, domestic logistics, products, and finance). These themes are inter-linked, as industrialisation and urbanisation foster further robust growth in GDP and domestic consumption, and are underpinned by the banking sector.

Industrialisation

Over the past thirty years Vietnam has emerged as a key manufacturing centre for a wide range of goods. The country's GDP growth has been fueled by FDI into the industrial and manufacturing-for-export sectors. The trend of 'made-in-Vietnam' has been accelerated by the 'China-plus-one' strategy of global manufacturers, seeking to de-risk their supply chains. The war in Ukraine, and the economic isolation of Russia, has also played into these fears, with many companies looking to spread their production more evenly over the world. Some commentators have called this the beginning of the end of globalisation. What is perhaps more likely is a continuation of the trend of supply chain restructuring. Some companies will look to re-shore manufacturing back home, others to