Vietnam has been one of the hottest stock markets thus far in 2021 so I would be cautious of jumping in and allocating large amounts of my capital in a hurry. With other boom years in the Vietnam stock market, it has often been characterised by fickle hot money from overseas. It is not uncommon in a boom to see money flock to the largest and liquid names that are easiest to attract this sort of capital. Vietnam’s stock market is characterised by relatively higher valuations on such names. I thought it would be useful to explore what the largest companies on the Vietnam stock market do and whether valuations suggest we should invest in them or not?
In 2021 we are increasingly reading stories that a driver of the boom this time has more been about liquidity picking up from retail flows from the Vietnamese. Perhaps as a result the boom this year still leaves some opportunity to invest in the biggest Vietnam companies on the stock market? Just to recap where I ended my last blog post, here is the list we shall take a bit more of a look at. I touched on these names when I discussed a broad overview of the Vietnam stock market. For those wanting to first get a grounding on this overview, here once again is AN OVERVIEW OF THE VIETNAM STOCK MARKET – A ONE STOP GUIDE. – VIETNAM STOCK MARKET (vietnamesestockmarket.com).
Now let’s get back to the list of the biggest blue chip companies on the Vietnam stock market.
ARE THE BIGGEST BLUE CHIP VIETNAM STOCKS A BUY?
LARGEST 10 COMPANIES LISTED ON THE VIETNAM STOCK EXCHANGE
- Vingroup Joint Stock Company (HOSE:VIC)
- Commercial Bank for Foreign Trade of Vietnam (HOSE:VCB)
- Vinhomes Joint Stock Company (HOSE:VHM)
- Hoa Phat Group Joint Stock Company (HOSE:HPG)
- Vietnam Commercial Bank For Industry And Trade (HOSE:CTG)
- Commercial Bank For Investment And Development Of Vietnam (HOSE:BID)
- Vietnam Technological And Commercial Bank (HOSE:TCB)
- Vietnam Diary Products Joint Stock Company (HOSE:VNM)
- Vietnam Prosperity Joint Stock Commercial Bank (HOSE:VPB)
- Petrovietnam Gas Joint Stock Corporation (HOSE:GAS)
Let’s take a quick look at some of the p/e ratios of the Vietnam stock market’s key companies.
Are there some undervalued Vietnam stocks to buy for 2021 and 2022?
Vingroup Joint Stock Company (HOSE:VIC), is the largest conglomerate of Vietnam, focusing on technology, industry, real estate development, retail, and services ranging from healthcare to hospitality. Investors have been attracted to the growth story of the car making unit in VinFast, and the prospects surrounding electric vehicles.

Approximate Market Cap in USD Billions – 17.2
Vingroup PE Ratio 2020 – 67
Commercial Bank for Foreign Trade of Vietnam (HOSE:VCB), a leader in terms of Vietnam’s premier current account savings account (CASA) franchise. With such a broad national footprint the bank trades on higher valuation metrics.

Approximate Market Cap in USD Billions – 15.9
Vietcombank PE Ratio 2020 – 22.6
Vinhomes Joint Stock Company (HOSE:VHM), together with its subsidiaries, invests in, develops, and trades in real estate properties in Vietnam. The company also engages in office leasing activities, as well as provision of real estate management and related services. It is a leading residential real estate developer in Vietnam, and has a history of success in delivering large scale and quality developments.

Approximate Market Cap in USD Billions – 14.6
Vinhomes PE Ratio 2020 – 10.8
Hoa Phat Group Joint Stock Company (HOSE:HPG), is a Vietnam-based company primarily engaged in the steel sector. The Company’s operations are comprised of five segments which are iron and steel, steel pipes and galvanized steel, agriculture, other industrial production and real estate. They have over 30% market share in Vietnam and can benefit from long term secular growth in their space. Vietnam have a strong appetite to improve their national infrastructure and Hoa Phat look well positioned to capitalize.

Approximate Market Cap in USD Billions – 10.2
Hoa Phat Group PE Ratio 2020 – 9.7
Vietnam Commercial Bank For Industry And Trade (HOSE:CTG) Vietinbank does not enjoy the same position of funding strength as say a Vietcombank and we can see trades at lower valuation metrics. The P/E is not forecast to come down for 2021 which may indicate a somewhat uncertain earnings outlook. In the past investors have focused on foreign ownership limits and how this affects the stock, as any changes in this regard can impact funding options they have.

Approximate Market Cap in USD Billions – 8.6
Vietinbank PE Ratio 2020 – 11.5
Commercial Bank For Investment And Development Of Vietnam (HOSE:BID), BIDV is building on Vietnam’s growing economy. The majority of its portfolio is in commercial loans — primarily construction, manufacturing, and agricultural loans. Most borrowers are state-owned enterprises; the rest of the bank’s portfolio also includes loans for state-directed projects.

Approximate Market Cap in USD Billions – 8.5
BIDV PE Ratio 2020 – 22.1
Vietnam Technological And Commercial Bank (HOSE:TCB) Techcombank was experiencing some impressive growth across many facets of the bank in the years leading up to 2020. The business model tends to place more emphasis on groups of larger customers, which may bring with it a degree of uncertainty in earnings predictability in the shorter term. Over the last decade they have diversified towards non net interest income activities. They are know for a strong market share in bond related activities such as advisory and issuance.

Techombank Approximate Market Cap in USD Billions – 8.2
PE Ratio 2020 – 8.7
Vietnam Diary Products Joint Stock Company (HOSE:VNM) is a company engaged in the food processing industry, specifically, the dairy industry. It is involved in the manufacturing, marketing, wholesale trading and retail distribution of dairy products, such as milk of various forms and flavors, including fluid milk, powdered milk and sweetened condensed milk, along with yogurt, frozen yogurt, ice cream, cheese and infant nutrition flour. Milk consumption per capita in Vietnam has been a structural growth story as the relatively young population becomes more affluent over time. Vinamilk has a high market share and therefore often trades on a higher P/E multiple.

Approximate Market Cap in USD Billions – 8.2
Vinamilk PE Ratio 2020 – 22.5
Vietnam Prosperity Joint Stock Commercial Bank (HOSE:VPB) VP Bank in recent history has a solid balance sheet and management and higher ROE than peers. It’s consumer finance subsidiary, FE Credit, has accounted for nearly half of its earnings. Fears over increasing consumer finance regulation can weigh on the stock. Longer term though their vision to embrace more the trend to digital transformation could be a catalyst if we see cost savings.

Approximate Market Cap in USD Billions – 7.4
VP Bank PE Ratio 2020 – 7.7
Petrovietnam Gas Joint Stock Corporation (HOSE:GAS) engages in gathering, manufacturing, storing, distributing, and trading gas products. Its products include liquefied petroleum gas, dry gas, condensate, compressed natural gas, and liquefied natural gas. At the time of writing the stock is about in the middle of its historical P/E band. This year its prospects look better as the sector in general is rebounding as revenues should climb.

Approximate Market Cap in USD Billions – 6.9
Petro Vietnam PE Ratio 2020 – 21.6
Source: market caps & P/E ratios – Dragon Capital May 2021 monthly report
INVEST IN VIETNAMESE?
That is a brief summary on some of the biggest companies on the Vietnam stock market. Those investors who look at various Vietnam ETFs and closed end funds (CEFs) might become familiar with some of these names. If you wish to further explore specific Vietnam ETFs and CEFs you can refer to these blog posts.
Vietnam STOCK Market ETFs
Here is a list of Vietnam stock market ETFs that are listed on major global stock exchanges.
WHAT IS THE BEST VIETNAM ETF ON THE STOCK MARKET? – VIETNAM STOCK MARKET (vietnamesestockmarket.com)
Vietnam closed end funds (CEFs)
Here is a list of the most well established Vietnam closed end funds (CEFs).
CONCLUSION OF SHOULD I INVEST IN VIETNAM STOCK MARKET LARGEST COMPANIES?
With the caveat of being a bit hesitant using a product with a high weight to potentially expensive stocks like Vingroup which I shall discuss shortly, the largest companies in Vietnam do not seem in bubble territory despite the massive performance in 2021. Generally speaking 2021 forecasts suggest P/E ratios for 2021 will be coming down. Valuations still look acceptable compared to the region and taking into account relative growth prospects. Market action in terms of Vietnam’s currency and bond markets suggest inflation is well contained and the stock market will continue to be viewed favourably compared with other investment alternatives. A worry in boom times in such “frontier” markets is often inflows from foreign investors. In this boom that theme seems relatively absent to date in 2021.
From a P/E ratio perspective I note that Vingroup Joint Stock Company (HOSE:VIC) stands out as a very high P/E stock. It is interesting that a few of the actively managed funds I have looked at own either zero exposure, or if any an exposure that is significantly underweight the benchmark. Whereas if you are using a product tracking a popular Vietnam stock index you might have an exposure here of circa 10-15% in one name. Having said that brokers do suggest the P/E can come down to the 30s in 2022 as the growth outlook is strong.
RETAIL INVESTOR BOOM IN VIETNAM AND TOP VIETNAM BANK STOCKS
Retiring on dividends in Vietnam?
There has been a big surge in the number of stock broking accounts opened up in Vietnam by retail investors. One key driver has been the rates they can earn on their deposit accounts at the bank are trending lower. They may be figuring if you can’t beat the banks, then join them as shareholders, and showing a liking to some of the above top Vietnam bank stocks.
They would also be very familiar with other big names on the Vietnam stock market. It would be natural for them to ask is Vinamilk a good stock to buy? Or is Vinhomes a good stock to buy? Names they are more familiar with.
These 10 names above may feature more in future blog posts as I expect to drill down into various fund offerings and their differences. We can get more of a sense which funds prefer which particular companies above with their exposures, and look at how they have performed etc. Comments as always welcome below.
Is Vietnam a good investment?
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