Vietnam Strategy Update - Ten laggards for re-opening catch-up

Ho Chi Minh City (HCMC) and several surrounding provinces are re-opening after the strict lockdowns which dragged Vietnam’s Q3 2021 GDP down to post a decline of 6.17% YoY. Earnings reports for Q3 2021 thus far look comfortably on track vs our current full year 2021 forecasts and with no immediate inflation concerns in Vietnam, we expect a supportive policy stance to continue through the current quarter and into 2022. We maintain our end-2021 VN-Index target of 1,450 and end-2022 target of 1,600, implying just 4% expected upside for the remainder of 2021 and an extension of the market’s recent consolidation phase. However, we believe there is a tactical opportunity in selected stocks which should be leveraged to re-opening and anticipation of normalization of economic activity. We highlight ten stocks which: 1) have lagged the index in 2H 2021 to date; 2) whose revenues should be positively leveraged to re-opening; and 3) are rated BUY by our analysts.

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