The re-escalating US-China trade war spate has emphasized the importance for manufacturing operations to diversify out of China.
One of the prime destinations to achieve such economic sense is Vietnam. Its economy is already strategically plugged into the regional manufacturing supply chain and offers a close substitute to China as a key component of the supply chain. Furthermore, with Vietnam’s trade surplus against the US, US is also keen to entertain more trade with Vietnam.
Here are six Singapore stocks that offers investors exposure to the Vietnamese market.
Investors Takeaway: 6 SG Stocks To Ride On Vietnam’s Growth Potential
ThaiBev is one of the best proxies for exposure to Vietnam’s enormous growth potential. ThaiBev derives around 25 percent of its sales from the Vietnamese market, thanks to its stake in Sabeco. ThaiBev owns 54 percent of Sabeco, which produces Saigon Beer (a leading beer brand in Vietnam).
BUY, TP $0.91; Current share price $0.83
- Keppel Corp
Keppel Corp’s property arm, Keppel Land, is one of Vietnam’s pioneer and largest real estate investors with a diverse portfolio of properties in Vietnam. It has properties in Hanoi, Ho Chi Minh City, Dong Nai and Vung Tau ranging from Grade A offices, residences, award-winning serviced apartments and integrated townships. Vietnam accounts for around ten percent of Keppel Land’s property revised net asset value.
BUY, TP $9.20; Current share price $6.090
- Mapletree Logistics Trust
While Mapletree Logistics Trust currently derives a small proportion of its revenue from Vietnam (two percent), the REIT is keen on bulking up its exposure in Vietnam. Its sponsor, Mapletree Investments, has a pipeline of properties that the Sponsor is currently developing or leasing up that could be acquired by Mapletree Logistics Trust in the longer term. It is also looking to add more land and facilities in Vietnam in the longer term.
BUY, TP $1.60; Current share price $1.56
- Sembcorp Industries
Besides operating a gas fired power plant in Vietnam, Sembcorp Industries has also been establishing a presence in the property market in Vietnam since 1996. Under its Urban Development segment, SembCorp Industries has partnered with the Vietnamese government to create integrated townships and industrial parks in the country. These integrated townships are complete work-live-play environments where Sembcorp Industries is involved through buying of land parcels for industrial, commercial and residential uses, as well as inclusion into development of selective property projects. According to DBS, Vietnam market represents ~60 percent of SembCorp Industries’ remaining saleable lands.
BUY, TP $3.90; Current share price $2.33
- Ascott Residence Trust
Ascott REIT derives close to five percent of its revenues from properties in Vietnam. These properties are mainly centrally located assets within Hanoi and Ho Chi Minh City. While performance of these properties have been mixed over time and most recently under pressure from new supply completions, DBS believes that performance will likely strengthen on the back of stronger business activities in the longer term.
BUY, TP $1.35; Current share price $1.33
CapitaLand has a strong and growing Vietnam business franchise focusing on the residential sector and lodging sector (through Ascott Limited and Ascott Residence Trust). The manages serviced residences are mainly in Hanoi and Ho Chi Minh City. DBS also notes that DBS has pre-sold close to ~$750M in presales from its residential projects, which will be recognised in the coming years.
BUY, TP $4.00; Current share price $3.53
6 Blue-Chip Stocks To Own In A ‘Risk-On’ Environment (Part 2)