Vietnam Equity FVMR Snapshot
that FVMR stands for Fundamentals, Valuation, Momentum, and Risk. Those are the factors that we look at to get an understanding of the market. This Vietnam Equity FVMR Snapshot is a bottom-up aggregate of 74 Vietnamese companies and all forecasted figures are consensus estimates. seekingalpha.com reported
Fundamentals: High profitability in Vietnam
The return on equity (ROE) in Vietnam is expected at 16.2% in 2018CE* and 18.6% in 2019CE*. This is well above the global average at 14.1% and 14.3% for 2018CE* and 2019CE* respectively. The two consumer sectors have the highest ROE in Vietnam at about 25-26% in 2018CE*, while the Energy sector has the lowest at about 10.8%.
Looking at the dividend payout ratio (DPR), Vietnam is below the Global average. Consumer Staples pay out the largest share of profit as dividend. The lowest DPR you find is in the Real Estate and Materials sectors.
Valuation: Vietnam trades above the World
Vietnam trades above the World on price-to-earnings (PE) and price-to-book (PB) for 2018CE*. The Materials sector trades at the lowest PE and PB. If we look at the PEG ratio, though, Materials looks a bit expensive at a 2018CE* PEG ratio of at 2.6. Still, the sector offers the best 2018CE* ROE/PB at 8.8%.
Real Estate trades at the cheapest 2018CE* PEG ratio of 0.6, followed by Consumer Discretionary at 0.9. Health Care and Energy have the highest PEG ratios, and hence appear most expensive on the measure.
As mentioned, Materials offers the most ROE for the PB you pay, while Consumer Staples, Energy, and Real Estate give you the least.
Momentum: EPS growth for Vietnam is slightly below the global average
The 2018CE* EPS growth for Vietnam is slightly below the global average. Real Estate and two consumer sectors have the highest 2018CE* EPS growth expectations. Info Tech and Industrials are expected to see falling earnings.