nathan.dang

Vietnam Investment: Investing in Manufacturing Industry

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In addition to investing in Vietnamese real estate, stocks, and funds, business-minded readers can consider investing in the Vietnamese manufacturing industry. The development of Vietnam’s manufacturing sector has shown a trend towards diversification and scale, primarily concentrated in electronics, textiles, footwear, machinery, automobiles, and other fields.

The growth of Vietnam’s manufacturing industry is mainly attributed to factors such as low labor costs, strategic geographical location, and government support. Furthermore, Vietnam has signed free trade agreements with multiple countries, including the EU-Vietnam Free Trade Agreement, China-Vietnam Free Trade Agreement, and Korea-Vietnam Free Trade Agreement, expanding the market and development opportunities for Vietnam’s manufacturing sector. In recent years, many Hong Kong companies have invested in building factories in both Ho Chi Minh City and Hanoi, reducing manufacturing costs and increasing profits when fulfilling overseas production orders.

越南投資製造業

Vietnam’s manufacturing industry primarily focuses on sectors such as electronics, textiles, footwear, machinery, and automobiles. (Image source: carlos aranda@unsplash)

Advantages of investing in Vietnam’s manufacturing industry include

 

1. Relatively lower labor costs in Vietnam, which can reduce production expenses for manufacturers.

2. Vietnam’s strategic location in the center of Southeast Asia, with convenient transportation links to China, India, and ASEAN countries, facilitating import and export trade.

3. Vietnam has signed free trade agreements with multiple countries, such as the EU-Vietnam Free Trade Agreement, China-Vietnam Free Trade Agreement, and South Korea-Vietnam Free Trade Agreement, expanding market opportunities and development prospects for the Vietnamese manufacturing industry.

越南投資 製造業

The relatively lower labor costs in Vietnam can help reduce production expenses for manufacturers (Image source: Lenny Kuhne@unsplash)

Risks in Investing in Vietnam’s Manufacturing Industry

1.  Vietnam’s labor force may have relatively lower skills and a shortage of highly skilled technical personnel, which could potentially limit the development of the manufacturing industry.

2. Vietnam’s manufacturing industry may lag behind in terms of technological advancement and may lack the ability for independent innovation. This limitation could hinder progress in line with technological advancements.

3. Vietnam’s tax policies are relatively unstable, which may impact investors’ investment plans.

4. Environmental and Social Responsibility Concerns:** The manufacturing industry in Vietnam faces environmental and social responsibility challenges, such as pollution and labor rights issues. Strengthened management and supervision are necessary to enhance sustainability.

投資越南製造業

Vietnam’s manufacturing industry faces environmental and social responsibility issues (Image source: Lalit Kumar@unsplash)

Considerations for Investing in Vietnam’s Manufacturing Industry

1. Before investing in Vietnam’s manufacturing industry, investors should familiarize themselves with Vietnam’s relevant investment policies, tax policies, and legal regulations to ensure compliance with local laws and access corresponding investment incentives.

2. Investors need to search for reliable local partners, including suppliers, agents, banks, and others, to receive support and assistance in their local investment operations.

3. Investors should pay attention to local labor rights and environmental issues in Vietnam, ensuring compliance with local laws and environmental requirements to avoid potential risks and negative impacts.

4. Investors need to protect their intellectual property rights to prevent infringement and misuse, strengthening intellectual property management and protection measures.

投資越南製造業

Investors need to pay attention to local labor rights and environmental issues in Vietnam (Source: Rio Lecatompessy@unsplash)

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nathan.dang

Vietnam Investment: Vietnamese Investment Funds

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The Vietnamese fund market is one of the key investment focuses in Vietnam. Many international investment firms offer various types of Vietnamese funds for institutional and retail investors, including equity funds, bond funds, real estate funds, money market funds, and more. The Vietnamese fund market has been growing in tandem with the development of the Vietnamese economy, attracting attention and investments from domestic and international investors. For more details, you can inquire with your bank’s investment client manager.

越南投資基金

Many international investment firms offer various types of Vietnamese funds for both institutional and retail investors (Image source: licensed by rawpixel.com@freepik)

Advantages of investing in Vietnamese funds

1. Funds offer advantages such as risk diversification, professional management, and the option of monthly contributions.
2. Investing in Vietnamese funds carries relatively lower risk compared to investing in individual assets like Vietnamese stocks or real estate, especially for retail investors.

越南投資基金

Vietnamese investment funds offer advantages such as risk diversification, professional management, and the option of monthly contributions (Image source: licensed by jcomp@freepik)

Risks of investing in Vietnamese funds

1. The Vietnamese government may amend fund-related laws and regulations at any time, such as fund management regulations and capital flow restrictions, which could have unfavorable effects on investors.
2. The management capability and risk control abilities of fund management companies can impact the fund’s performance. Investors should pay attention to the strength and risk management capabilities of the fund management company.
3. Different types of funds have varying risk-return characteristics. Investors should choose funds that align with their risk preferences and investment objectives while also considering risk diversification.

投資越南基金

The management capability and risk control abilities of fund management companies can influence the fund’s performance (Image source: licensed by jcomp@freepik)

Considerations for investing in Vietnamese funds

1. It’s important to understand the fund’s investment strategy, target assets, risk-return characteristics, and select funds that align with your risk preferences.
2. Gain insight into the strength of the fund management company, its management team, and operating style to ensure professional management of the fund.
3. Monitor market risks, policy risks, exchange rate risks, and make timely adjustments to your investment portfolio.
4. Pay attention to the fund’s fee structure, including management fees, custody fees, subscription fees, redemption fees, etc., to ensure reasonable investment costs.
5. Understand the fund’s portfolio and risk diversification, diversify risks appropriately, and develop buying and selling strategies.
6. Be mindful of the fund’s liquidity risk to ensure you can buy or sell fund units when needed.

投資越南基金

Investing in Vietnamese funds requires understanding the fund’s investment strategy, target assets, risk-return characteristics, and more (Image source: licensed by Freepik)

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nathan.dang

Vietnam Investment: Investing in Vietnamese Stocks

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The Vietnamese stock market is one of the primary investment markets in Vietnam. There are three stock exchanges in the Vietnamese stock market, namely the Ho Chi Minh Stock Exchange (main board), the Hanoi Stock Exchange (small and medium-sized board), and UPCoM Exchange (similar to the Growth Enterprise Market). There are over 700 listed companies in the Vietnamese stock market. In recent years, the Vietnamese stock market has experienced rapid development, with significant growth in market capitalization and the number of investors.

越南投資股票

The Vietnamese stock market is one of the primary investment markets in Vietnam (Image source: licensed by rawpixel.com@freepik)

Advantages of investing in Vietnamese stocks

  1. The Vietnamese stock market has significant potential for rapid development, with promising market prospects. Moreover, the Vietnamese government actively promotes economic reforms and open policies, which has garnered high interest from many investors.
  2. Valuations in the Vietnamese stock market are relatively lower, providing investors with opportunities to purchase stocks of companies with high growth potential at lower prices.

越南投資 股票

The Vietnamese stock market has the potential for rapid development (Image source: licensed by Freepik)

Risks of investing in Vietnamese stocks

1. The market exhibits higher volatility, along with risks associated with policies and currency exchange rates.
2. The Vietnamese stock market lacks a mature investment ecosystem, including a lack of diversified investment products and relatively weaker risk management capabilities among investors.

投資越南股票風險

The Vietnamese stock market lacks a mature investment ecosystem; therefore, caution should be exercised when investing in stocks (Image source: licensed by pressfoto@freepik)

Considerations for investing in Vietnamese stocks

1. It’s important to understand the basic conditions, investment requirements, and risks of the Vietnamese stock market.
2. Choose suitable Vietnamese companies for investment by thoroughly understanding their fundamentals, financial status, and growth prospects.
3. Pay attention to market risks and policy risks, and stay updated on market dynamics and policy changes.
4. Implement risk management strategies, such as diversifying your investments and selecting stocks of larger companies with lower risk profiles.

投資越南 股票注意

When investing in Vietnamese stocks, it’s important to carefully choose suitable Vietnamese companies for investment and have a thorough understanding of their fundamentals, financial status, and growth prospects (Image source: licensed by our-team@freepik)

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nathan.dang

Vietnam Investment: Vietnamese Real Estate Investment

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The first recommendation for investment in Vietnam is investing in Vietnamese real estate. In recent years, Vietnamese real estate has become one of the hottest industries in Vietnam. The real estate market in Vietnam has seen rapid development, especially in luxury residential projects in the central districts of Ho Chi Minh City, where explosive growth has occurred in recent years. This has attracted many overseas investors from China, Hong Kong, and Southeast Asia to seek investment opportunities in other cities and areas of Vietnam, with real estate investment in Hanoi being a preferred choice among overseas property investors in recent years.

The Vietnamese government has actively promoted reforms and open policies in the real estate market, offering various investment incentives and favorable policies to attract both domestic and foreign investors to invest in Vietnam. What are the different submarkets for real estate investment in Vietnam? Real estate investment in Vietnam can be divided into several submarkets, including residential, commercial, office, industrial, and more. In recent years, many investors have taken an optimistic approach to investing in the Hanoi real estate market, as Vietnam has been actively developing Hanoi, similar to how Melbourne in Australia has been catching up with Sydney in terms of economic growth and population in recent years.

越南投資地產

The first recommendation for investment in Vietnam is to invest in Vietnamese real estate (Image source: Tron Le@unsplash)

Advantages of Real Estate Investment in Vietnam

1. Vietnam’s population exceeds 100 million, with a median age of around 30 years old, indicating a significant young workforce. This demographic dividend is a major advantage, as there is substantial domestic demand for real estate.

2. Foreign investment continues to rise, benefiting from Vietnam’s population, as more and more companies establish factories in Vietnam, contributing to economic and urban development.

3. Vietnam’s infrastructure is flourishing, with the first railway in Hanoi opening at the end of 2021, and eight more subway lines planned for the future. This development stimulates urban growth and stimulates the real estate market. Purchasing property in Hanoi, Vietnam, has become a new investment trend.

4. Vietnam’s real estate market has rapid growth potential and a promising outlook. According to data from the Vietnam General Statistics Office, the real GDP growth rate has consistently remained above 5% for the past decade. Additionally, the Vietnamese government actively promotes economic reforms and open policies, providing various investment incentives and favorable policies.

5. Compared to real estate in Hong Kong, property prices in Vietnam are much more affordable. Investors can acquire real estate with high growth potential at lower prices.

6. Vietnam’s mortgage policies are open to foreigners, allowing individuals from different countries to purchase property in Vietnam.

越南投資房地產

In recent years, many foreign investors have been investing in Vietnamese real estate (Image source: Peter Nguyen@unsplash)

Risks of Investing in Vietnamese Real Estate

1. The Vietnamese government may modify real estate-related laws and regulations, such as taxation policies, at any time.
2. The Vietnamese real estate market is highly competitive, and investors need to understand the local market conditions and competitive environment.

投資越南地產

The Vietnamese real estate market is highly competitive, and investors need to understand the local market conditions and competitive environment (Image source: Minh Minh@unsplash)

Considerations for Investing in Vietnamese Real Estate

1. Understand the basics of the Vietnamese real estate market, investment conditions, and risks.
2. Choose the right investment project by understanding property details, location, market demand for rentals and sales, and potential returns on investment.
3. Be aware of market and policy risks and stay updated on market dynamics and policy changes.
4. Comply with relevant investment regulations and laws in Vietnam to ensure legal and compliant investment activities.

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nathan.dang

Amkor’s new facility in Vietnam is scheduled to commence operations in October. ASE Holdings and Foxconn have already proactively positioned themselves in the market

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Semiconductor packaging and testing giant Amkor announced today that its new factory in Vietnam will commence operations in October, with a focus on advanced system-level packaging (SiP), memory packaging, and select testing lines. Universal Scientific Industrial – a subsidiary of ASE Technology Holding and Foxconn have already proactively positioned themselves in Vietnam.

艾克爾越南新廠10月營運日月光、鴻海已搶先布局- 國際- 中央社

Amkor specifies that the new Vietnamese facility, located in Bac Ninh province, will primarily specialize in advanced system-level packaging (SiP) and memory packaging production lines, along with some testing solutions. Notably, the SiP production line will target applications in radio frequency (RF), wearables, and automotive sectors, while memory packaging will cater to mobile storage devices, NAND-type flash memory related to solid-state drives (SSD), and automotive applications.

The semiconductor testing and packaging industry continues to expand its production capacity in Vietnam. Universal Scientific Industrial (USI) – a subsidiary of ASE Technology Holding, announced an investment of $35 million (approximately NT$1.008 billion) in March last year to increase capital for its subsidiary in Vietnam, expanding its production of wearable electronic chip packaging and electronic manufacturing services (EMS).

USI’s Vietnam factory was established on June 18, 2020, located in Dinh Vu Industrial Zone, Hai An District, Hai Phong City, Vietnam, and commenced production in July 2021.

Hon Hai Group invested in the system module packaging factory ShunSin-KY (6451), which has previously deployed its factory in Hanoi, Vietnam. The Bac Giang factory in Vietnam, opened in May this year, is expected to undergo trial production and enter mass production within a year. ShunSin-KY’s Vietnam factory primarily supplies optical fiber transceiver modules to European and American customers.

Intel, a major player in the semiconductor industry, has also expanded its presence in Vietnam by venturing into semiconductor packaging and testing operations. Vietnamese media in July quoted local Intel executives indicating Intel’s intentions to further expand its investments in Vietnam.

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nathan.dang

Singapore is Vietnam’s second largest source of foreign investment, Prime Minister Lee Hsien Loong leads a delegation to visit

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Singaporean Prime Minister Lee Hsien Loong arrived in Hanoi this afternoon to embark on a three-day visit to Vietnam. Singapore is Vietnam’s second-largest source of foreign investment, with a total of 3,273 investment projects valued at $73.4 billion in Vietnam.

Thủ tướng Singapore Lý Hiển Long thăm chính thức Việt Nam: Thúc đẩy quan hệ Đối tác Chiến lược - Ảnh 1.

According to reports by VnExpress, Lee Hsien Loong’s visit to Vietnam was in response to an invitation from Vietnamese Prime Minister Pham Minh Chinh. Lee Hsien Loong’s official aircraft landed at Noi Bai International Airport in Hanoi this afternoon.

The reports note that Lee Hsien Loong’s visit coincides with the 50th anniversary of diplomatic relations between Vietnam and Singapore, as well as the 10th anniversary of their strategic partnership. During this trip, Lee Hsien Loong will meet with Vietnamese leaders and witness the signing of various bilateral agreements.

Vietnam and Singapore established diplomatic relations in 1973, and in 2013, they elevated their relationship to a strategic partnership. According to the Vietnam News Agency (VNA), this is Lee Hsien Loong’s fifth visit to Vietnam as Prime Minister, underscoring the close relationship between Singapore and Vietnam.

Accompanying Lee Hsien Loong on this visit are Madam Ho Ching, Minister for Foreign Affairs Vivian Balakrishnan, Minister for Education Chan Chun Sing, Minister for Manpower Tan See Leng, and other officials.

Singapore is Vietnam’s second-largest source of foreign investment, with a total of 3,273 investment projects valued at $73.4 billion. Bilateral trade reached $9.15 billion in 2022, marking an 11.57% annual increase.

The Vietnam-Singapore Industrial Parks symbolize bilateral economic cooperation, with 14 of these industrial parks jointly established in 10 Vietnamese provinces and cities. They have attracted a cumulative total of $18.7 billion in investment and created 300,000 job opportunities.

Singapore is a major economic partner for Vietnam in the region. Vietnam is currently Singapore’s 12th largest trading partner, while Singapore ranks as Vietnam’s 15th largest trading partner.

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nathan.dang

Stock Price of ‘Vietnam’s Version of Tesla,’ VinFast Auto (VFS), Plummets! Richest Individual’s Wealth Shrinks Over 730 Billion in 3 Days

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Vinfast

After the debut of VinFast Auto (VFS), often hailed as the ‘Vietnam’s Version of Tesla’, on the US stock market, the 18th witnessed a substantial 23% decline, concluding at $15.4. As per international media sources, Pham Nhat Vuong, Vietnam’s wealthiest individual and principal stakeholder of VinFast, encountered a swift 52% reduction in his net worth within just 3 days, a trend that grabbed considerable attention upon its revelation.

According to reports from the ‘The Wall Street Journal’, VinFast, Vietnam’s pioneering electric car brand, has been energetically venturing into global markets. On the 15th of this month, it underwent a public listing in the US via a Special Purpose Acquisition Company (SPAC) mechanism. Although its stock value surged remarkably on the initial day, surpassing market caps of iconic names such as Ferrari, Honda, and Ford, the favorable trajectory took an abrupt turn, giving way to a steep downturn.

It’s worth highlighting that Pham Nhat Vuong, Vietnam’s wealthiest individual who holds the majority of VinFast’s shares, has encountered significant oscillations in his net worth since VinFast’s listing in the US. Commencing with an astounding surge of $39 billion (equivalent to approximately 1.24 trillion New Taiwan Dollars) on IPO day, his wealth plummeted by 52% within 3 days, translating to a loss of $23 billion (about 734 billion New Taiwan Dollars), ultimately bringing down his net worth to $21.2 billion (around 676.5 billion New Taiwan Dollars). Nevertheless, the affluence of Pham Nhat Vuong still stands significantly higher compared to pre-VinFast market introduction.

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和碩
nathan.dang

Viettel sets up 5G private mobile network for electronics giant Pegatron

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Viettel

Viettel has successfully trialed a 5G private mobile network (5G PMN) service on a trial plot for a Pegatron factory, the Vietnamese military-run telecom giant announced Thursday.

The factory of the Taiwanese electronics giant in the northern coastal city of Hai Phong became the first one in Vietnam to run automation via 5G technology, which offers high speeds, low latency and multi-connection support.

In the project’s first phase, Viettel will provide 5G technology for five applications. The services will include public cloud computing, assembly station, product testing and production supervision.

The application of 5G technology will help Pegatron improve efficiency and profitability. It will enhance management via real-time data collection, decrease occupational hazards and provide other benefits.

Viettel said its 5G PMN can provide effective solutions for factories, warehouses, seaports and airports to operate efficiently. The success of technology provision at the Pegatron factory proves that it can apply the world’s top technology, it added.

Viettel, valued at $8.9 billion in 2022, up $144 million year-on-year, remains the only Vietnamese brand in the 2023 edition of the Global 500 report by valuation consultants Brand Finance. The group has now deployed 5G technology in 58 out of 63 provinces and cities in Vietnam.

Pegatron, a major supplier for Apple, runs two businesses in Vietnam – the Pegatron Vietnam Company Limited (PVN) and Pegatron Technology Hai Phong Company Limited (PHP) – focusing on manufacturing and selling consumer electronics, computers, related peripherals, communications equipment and electronic parts. The two companies were established in March and April 2020, respectively.

In September 2022, the Taiwanese giant poured an additional $100 million into Pegatron Vietnam Company Limited, which had begun constructing a 5.04-hectare worker accommodation project in the northern port city of Hai Phong a few months earlier. The company said it aimed to complete six buildings by the fourth quarter of 2024. The project will improve workers’ livelihoods, reduce the cost of transporting workers and improve labor productivity, it added.

Hai Phong attracted $1.81 billion in foreign direct investment in the first half of this year, up 64.8% year-on-year. The city recorded a gross regional domestic product (GRDP) growth of 9.94% in the same period; and its index of industrial production (IIP) increased 12.28% year-on-year.

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Vietnam’s digital economy
nathan.dang

Vietnam’s digital economy value expected to be $49 billion by 2025

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Vietnam’s digital economy is predicted to continue growing with a CAGR (compound annual growth rate) of 31 percent with value reaching $49 billion by 2025, according to a report about e-commerce.

The 2023 report “Sustainable development of e-commerce – the driving force for digital economy” released on March 21 shows that the digital economy in 2022 was the fastest growing in the region. E-commerce is one of the pioneers creating a driving force for economic development and leads digital transformation in enterprises.

The report by Google, Temasek and Bain & Company showed that the gross merchandise value (GMV) of Vietnam’s digital economy is predicted to reach $49 billion by 2025.

E-commerce is expected to be over 60 percent of the value of Vietnam’s digital economy. Of the $23 billion Vietnam’s digital economy gained in 2022, $14 billion was from e-commerce.

Speaking at the event, Nguyen Quang Vinh, deputy chair of the Vietnam Confederation of Commerce and Industry (VCCI), said it is necessary to analyze the development of the e-commerce sector and grasp sustainable growth suited to Vietnam’s economic conditions, thus making contributions to national digital transformation in accordance with the government’s policy.

Regarding sustainable development, Pham Cong Hiep from RMIT Vietnam University said this is indispensable to help enterprises define their vision and strategic development orientation in the digital era. Sustainable development will also require enterprises to continue to increase the value of products and services via e-commerce through technology application, satisfying consumer needs.

The report emphasized that an effective logistics system will serve as a key for e-commerce firms that helps end-to-end connection in the entire system of supply chain and increase customer’s e-commerce shopping experience.

Dang Anh Dung, deputy CEO of Lazada Vietnam, noted that sustainable development is a matter of survival for enterprises today. It will comprehensively change the e-commerce sector in the near future.

Predicting the trends of e-commerce, Nguyen Thanh Son, a senior strategic consultant, president of MVV Group, said sustainable e-commerce will continue to strive for long-term investments in infrastructure, technology, logistics and human resources.

Resources: Vietnamnet| Link

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Global Supply Chain
nathan.dang

Taiwanese and South Korean Companies Accelerate Exodus from China: Vietnam Takes Center Stage in Global Supply Chain

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Global Supply Chain

Taiwan and South Korean companies are accelerating their move out of China, seeking a more stable business environment amidst escalating geopolitical tensions and rising operational risks in China. Vietnam has emerged as the new destination for these manufacturers. Vietnamese developer Deep C, operating five industrial parks in Vietnam, revealed that Taiwanese, Chinese, and South Korean enterprises are rapidly shifting their operations away from China or relocating to other countries. In this wave of divestment from China, Vietnam has risen to become a crucial player in the global supply chain.

The Financial Times reported that the impact of geopolitical tensions is prompting a shift in the supply chain away from China. As a result, there is significant demand for land in Deep C’s Two Industrial Zone in northern Vietnam, and the developer is considering ways to create more space. Currently, major suppliers of global tech companies like Apple are concentrated in this industrial park.

Belgium developer Deep C is ready to seize the opportunity brought by the exodus from China. Koen Soenens, Sales Director of Deep C, stated that Taiwanese, South Korean, and Chinese entrepreneurs appear to be accelerating their relocation from China to other countries. When asked about the plans of foreign companies currently operating in China, they responded that they are seeking new locations to serve their overseas clients.

Over the past 30 years, Vietnam’s export-oriented growth has lifted millions out of poverty and gained a significant position in the technology supply chain, including producing millions of AirPods for Apple. According to Vietnamese government data, foreign direct investment in Vietnam reached $22.4 billion in 2022, growing at an annual rate of 13.5%.

Despite a slight dip in foreign direct investment during the first five months of this year compared to the same period last year, investors, analysts, and officials state that foreign interest remains robust. During the first five months, Vietnam attracted 962 new foreign direct investment projects, exceeding last year’s 578 projects during the same period.

Vietnamese Finance Minister Ho Duc Phoc expressed that Vietnam possesses abundant and affordable labor supply, which is expected to remain cost-effective for an extended period. The infrastructure is also improving and becoming more modern.

However, challenges like power shortages and bureaucratic attitudes in the government have negatively impacted Vietnam’s economic development. Koen Soenens of Deep C noted that regardless of concerns about labor, infrastructure, or other issues, few believe that the growth brought by the ‘China+1’ strategy will end anytime soon.

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