Arisaig Partner sells Vinamilk shares and new investments in Sabeco and MWG

Đăng bởi

  • Arisaig Partner ‘s member funds have ended their investment positions at Vinamilk, achieving a return of 20% per year since the acquisition in 2009.
  • Arisaig Asia has received the transfer of 17.3 million MWG shares from October 2019 up to now.
  • The fund also reported new investment in Sabeco but did not disclose specific numbers.
  • Despite selling Vinamilk shares, the proportion of Vietnamese shares still increased to 3.1% at the end of July.

Arisaig sells Vinamilk shares, with a profit margin of 20% / year

A recent report by Arisaig Partner shows that foreign funds are becoming concerned about the dairy industry when selling at Vinamilk ( HoSE: VNM ) and Group Lala (a Mexican dairy company). The rest of the milk portfolio is primarily related to Nestle and the fund hopes the company will launch new products outside of the dairy category.

Arisaig Partner believes that the agricultural resources (land, water …) spent on the maintenance of dairy cows are too expensive and this is the most environmentally damaging category among the fund’s investment areas. Scientists say a 50% cut to global red meat and dairy consumption could reduce global warming by 1.5 degrees Celsius. These statements do not imply strong predictions of the effects. Specifically; However, Arisaig analysts still support the sale of stakes in Vinamilk and Group Lala.

Member funds that sold Vinamilk shares were Arisaig Asia Consumer Fund and Arisaig Gem Consumer Fund. In the first decade, Vinamilk led the growth wave of Vietnam’s dairy industry, supported by the policy of increasing school milk consumption. However, the fund found that growth has slowed considerably.

Vinamilk has responded well to intrusive foreign competitors such as Abbott or Coca-Cola, but this is not enough to offset the slowing growth of key products such as drinking milk and infant formula. children.

In addition, the trend of dairy consumption in China in recent years (a market that is culturally similar to Vietnam) has prompted Arisaig to reevaluate the company’s long-term growth in Vietnam. Specifically, the fund observes that the saturation point is closer than originally envisaged and sees more attractive opportunities in other countries.

The foreign fund invested in Vinamilk since 2002 through a direct auction and sold its shares in 2007. After the financial crisis, the fund bought back shares in 2009 and ended its position in the second quarter. by. Arisaig Asia estimates the average 11-year return on investment is 20% / year (in USD).

According to Vinamilk’s 2019 annual report, Arisaig Asia is the 5th largest shareholder of the dairy company with 28.8 million shares, a 1.65% share rate. With the price of about 100,000 VND / share in the second quarter, these shares are worth about 2,900 billion VND.

Arisaig Partner believes that the agricultural resources (land, water …) spent on the maintenance of dairy cows are too expensive and this is the most environmentally damaging category among the fund’s investment areas. Scientists say a 50% cut to global red meat and dairy consumption could reduce global warming by 1.5 degrees Celsius. These statements do not imply strong predictions of the effects. Specifically; However, Arisaig analysts still support the sale of stakes in Vinamilk and Group Lala.

Invest in MWG and Sabeco

Despite selling Vinamilk’s dairy stocks, Arisaig Partner is still interested in Vietnamese stocks when increasing the weight from 2.6% at the end of April to 3.1% at the end of July. This is because the fund buys other stocks.

Specifically, only through the Vietnam Securities Depository (VSD), Arisaig Asia has received the transfer of 17.3 million shares of Mobile World Investment ( HoSE: MWG ) from October 2019 up to now. With the price around 80,000 dong / share, this amount of shares is currently at market price of about 1,400 billion dong.

mwg

MWG is growing rapidly in the food retail and consumer industry with Bach Hoa Xanh chain.

MWG specializes in the retail of phones and electronics but gradually penetrates into the retail industry with Bach Hoa Xanh chain. At present, Bach Hoa Xanh has the largest number of stores in the network with 1,486 stores and sales growth of 132% per year thanks to increase in number of stores and increase in sales volume of Covid-19 outbreak. The Group also started to pay attention to clean agriculture when investing in a 4KFarm agricultural model in Dong Nai.

In addition, in the May report, Arisaig Asia also said that there was new investment in Vietnam’s largest brewing company Sabeco ( HoSE: SAB ), but there was no specific number. Sabeco’s stock price devaluation in April-April could be a factor that makes the fund’s interest.

Sabeco’s business situation is still very difficult due to the double impact from Covid-19 and Decree 100, resulting in a rapid decrease in consumption; The company had to respond with stricter cost controls. The semi-annual report showed a 35% decrease in revenue to VND 12,044 billion and a 30% decrease in net profit to VND 1,865 billion.

Reported at the end of July, Arisaig Asia Consumer Fund has a total asset value under management of more than 2.67 billion USD. Vietnamese stocks accounted for 3.1%, or about $ 83 million. India remains the main investment market for foreign funds.

allocation

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