Monday, July 1, 2013

Vietnam exports strong and people hardworking

There are a lot of bad loans in the banking system, and the stock market has fallen 70% from the highs. But exports are strong, and the people are hard-working. There is a 35-kilometer stretch of beach between Danang and Hoi An that will be a huge resort area in the future. It is only an hour and 10 minutes by plane from Hong Kong, and two hours from Singapore. A Park Hyatt resort in the area has been selling villas and condos, and almost all have been bought by Vietnamese. I visited during a holiday, and 90% of the people on the beach were Vietnamese. One man even brought his Lamborghini.

You can find companies in Vietnam with yields of 5% to 7%. I like Military Commercial Bank, and I'm overweight Vietnam Dairy Products. It is a dominant force in the diary-foods industry and has been growing by about 20% a year for the past 10 years. It could keep growing by 10% to 15% per annum, and the valuation is low. Sooner or later, it will be acquired.