Investing in Vietnam

January 2011
CONFIDENTIAL: The information contained herein is being furnished on a confidential basis solely for your information and should not be provided to another party without our prior consent IndochinaCapitalCorporation|page1 INDOCHINACAPITALADVISORS|page1 of22

Table of Contents

Macroeconomic Primer: Current Headwinds Investing in Vietnam: C Current Attractions Indochina Capital Corporation: Firm Overview Indochina Capital Advisors: Equities Division Indochina Land: Real Estate Division Indochina Infrastructure: Infrastructure Divisions APPENDIX I | Th Growth Story: Strong Economic Fundamentals The G th St St E i F d t l APPENDIX II | Investment Themes: Equities Division Contact Us

3 9 14 18 22 26 29 36 40

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Investment Strategy

Macroeconomic Primer

Indochina Plaza Hanoi Mixed-Use Development 2011 Scheduled Opening Condominiums: 390 Retail (NFA): 18,000 m2 Office (NFA): 14,400 m2

Current Headwinds & 2011 Forecast/Medium-term Outlook

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Macro Primer

Balancing Growth & Inflation

The ebb and flow of monetary policy between 2008-2010

Policies that Drive GDP Growth in the Face of Inflation

8% 7.40% 7% 6.80% 6.50% 6 50% 6.50% 6 50% 6.20% 6% 5.30% 20.00% 5% 3.90% 3.10% 3% 10.00% 2% 5.00% 1% 4.60% 15.00% 15 00% 5.80% 6.20% 6.50% 6 50% 25.00% 25 00% Real GDP (YoY) (LHS) CPI (YoY) (RHS) 30.00%

4%

0% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010

0.00%

Liquidity Driven Inflation Bubble

Credit growth in Q1 2008 escalated to 63% YoY, fueling import growth which surged 75% YoY in the same period. As a result of loose monetary policies and rising global food prices, Vietnams headline inflation rose to 28.3% . Source: Bloomberg

Monetary Tightening
To combat inflation, the government: Successively raised the prime lending from 8.25% p.a. to 14% p.a.; Compulsory bond issuance to domestic banks; and Raised reserve requirements.

Global Financial Crisis

With inflation abating, the government unwound its monetary and credit tightening measures. By yearend 2008 it 2008, had reduced reserve requirements to 6% and the lowered the prime lending rate to 8.5% p.a.

Post-GFC Stimulus
The knock-on effect of the GFC caused Vietnams quarterly GDP growth rate to dip to a decade low in Q1 2009. In turn, the government initiated a stimulus package amounting to US$8-9 billion

Recovery y
On the back of the stimulus package, GDP growth in 2009 rebounded, as a result of resilient domestic consumption and further aided by a recovery offshore. Along with accelerating growth, the inflation rate began to pick up steam.

Pre-Party Paralysis
In the run up to the National Party Congress in January 2011, there was a paralysis in the State Bank of Vietnam and governmental authoritiesand inflation pressures returned.

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Macro Primer

Sovereign Credit Ratings

Vietnam downgraded in 2010

EM Asia: Sovereign Credit Ratings

Ratings Downgraded
Fitch, Moodys and Standard & Poors downgraded Vietnams sovereign debt rating in 2010 The downgrades were driven by the following factors: g y g Inconsistent economic policies that heighten the risk of a balance of payments crisis. Instability in the VNDs foreign exchange rate and black market premium. Accelerating inflation that surged to nearly 12% YoY in 2010, driven by increases in food prices due to local weather disruptions and hikes in global commodity prices. Rising inflation led to official and informal depreciations of the local currency, where the black-market rate still persists around 8% above the outer band of the official exchange rate. exchange-rate Limited foreign exchange reserves and bank asset quality/liquidity: with foreign exchange reserves running low at an estimated US$15 billion, down from the 2008 peak of US$23 billion, the government is in a weak position to shore up balance of payment concerns. The primary impact of the rating downgrades is an increased cost of borrowing for the country and in-turn an increase in the cost of capital for Vietnamese corporations. This is evident from the following market indicators: 5-year credit default swaps, the cost of insuring against a credit default on Vietnam government bonds, have increased from their mid September mid-September levels of 220 basis points to 330 basis points as of the start of 2011. Yields on 10-year government bonds have increased 80 basis points since September 2010 to 11.8% while overnight interbank rates spiked from 7% in October to 11% at the end of the 2010.

Recent monetary tightening to ease inflation and currency pressures

Moody's Aaa S&P AAA Fitch AAA Moody's SG S&P SG Fitch SG Definitions Prime investment grade

Aa1 AA+ AA+ HK HK High grade and high Aa2 AA AA HK quality Aa3 AAAACN,TW TW A1 A+ A+ KR CN KR,TW,CN A2 A A KR Upper medium grade A3 AAMY MY MY Baa1 BBB+ BBB+ TH TH Baa2 BBB BBB TH Lower medium grade Baa3 BBBBBBIN IN IN Ba1 BB+ BB+ ID Non investment grade Ba2 BB BB ID ID,PH,VN PH Speculative Ba3 BBBBPH B1 B+ B+ VN,SL,FJ SL VN,SL B2 B B Highly speculative B3 BBPK FJ,PK SG=Singapore; HK=Hong Kong; KR=Korea; CN=China; TW=Taiwan; MY=Malaysia; TH=Thailand; IN=India; ID=Indonesia; PH=Philippines; VN=Vietnam

Price of 5-Year CDS (US$)

Insuring Vietnam credit risk is lower than PIG nations
887

616 462 330 282

Greece

Ireland

Portugal

Vietnam

Spain

Source: Bloomberg, 17 January 2011

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Macro Primer

State-Owned Enterprise Balance Sheet & Profitability

Troubled Vinashin is an outlier compared to other SOEs

Vinashin appears to be the exception, not the norm, from a balance sheet quality perspective.
Vietnam: State-Owned Enterprises - Balance Sheet: Size and Composition
(% of GDP) 1/ Assets 2006 Major economic groups (EGs) > EVN (electricity) > PETROVN (petroleum and gas) > VNPT (post and telecommunications) > VINASHIN (shipping/ship-building) > VINACOMIN (coal and minerals) > VINARUBBER (rubber) > VINATEX (textiles) Other EGs / special general corporations Other general corporations All EGs and general corporations 1/ 48.0 14.1 15.1 8.1 5.7 2.2 2.0 0.9 11.1 18.1 77.2 2007 48.7 16.2 12.5 7.7 6.8 2.8 1.8 1.0 12.4 19.3 80.4 2008 52.3 13.8 19.1 6.9 6.2 3.3 2.2 0.8 2006 23.8 5.5 10.2 5.7 0.3 0.9 1.0 0.3 4.4 5.4 33.7 Equity 2007 22.8 6.5 8.4 5.3 0.5 1.0 1.0 0.3 4.4 6.5 33.7 2008 22.7 4.5 10.6 4.7 0.5 1.0 1.1 0.2 2006 23.4 8.6 4.8 1.8 5.4 1.3 0.9 0.6 6.5 12.5 42.5 Debt 2007 24.5 9.4 4.1 1.6 6.2 1.7 0.8 0.7 7.7 12.4 44.7 2008 26.7 8.0 7.9 2.1 5.7 2.1 0.6 0.5 2006 49.6 38.8 67.4 70.4 5.8 39.2 52.1 29.1 39.8 30.0 43.6 Equity/Assets 2/ 2007 49.5 40.2 66.9 68.5 6.8 35.1 54.4 26.3 35.4 33.7 41.9 2008 43.4 32.8 55.6 67.2 8.4 30.4 49.8 29.6

Vietnam: State-Owned Enterprises - Profitability Indicators State Owned

(%; asset-weighted averages) 1/ Pre-tax Profit Rate 2006 Major economic groups (EGs) > EVN (electricity) > PETROVN (petroleum and gas) > VNPT (post and telecommunications) > VINASHIN (shipping/ship-building) > VINACOMIN (coal and minerals) > VINARUBBER (rubber) > VINATEX (textiles) Other EGs / special general corporations Other general corporations All EGs and general corporations 20.2 5.8 36.0 27.9 4.1 8.9 39.2 1.6 3.0 30 4.6 11.3 2007 21.0 7.4 32.2 38.5 3.9 7.9 32.2 2.2 3.3 33 6.0 10.9 2008 14.9 2.8 24.7 24.7 2.7 11.2 29.8 3.3 2006 9.5 1.9 15.5 14.1 0.9 12.4 23.6 2.3 2.9 29 4.5 7.4 Return on Assets 2007 9.6 2.3 16.5 13.2 1.1 9.6 22.2 2.7 3.2 32 6.0 7.2 2008 7.4 0.9 11.4 12.6 0.9 13.3 15.1 3.1 2006 17.2 4.9 23.0 20.0 15.0 31.6 45.2 7.8 7.3 73 15.0 16.9 Return on Equity 2007 17.8 5.8 24.7 19.3 16.4 27.5 40.7 10.4 9.1 91 17.9 17.2 2008 15.1 2.8 20.5 18.8 10.6 43.7 30.2 10.4

Sources: Ministry of Finance; National Steering Committee for Enterprise Reform and Development; and IMF staff calculations. 1/ Combined, the EGs and general corporations account for about 80%of total state capital invested in SOEs (estimated at 43.7% of GDP at end-2007) 2/ In percent.

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Macro Primer

Monetary Policy
Balancing Pro-Growth Policies to Contain Inflation and Stabilize the VND

Credit Growth and Inflation (% growth year-over-year)

Inflationary Pressures have Returned

Following a few mid-year months of moderation, inflation picked up towards the end of Q3, largely attributed to the pass-through of the 2.0% devaluation of the Vietnamese Dong (VND) in August . Inflation escalated to 11.8% year-over-year by the end of 2010, primarily as a result of rising food costs (Duly noted, foodstuff represents 40.0% of Vietnams CPI basket, which is typical of an emerging market). However, the reacceleration of Vietnams inflation rate is no surprise against the backdrop of strong demand-led pressures and the recent g p g p round of currency devaluation. For 2011, the governments aims is to target an annual inflation rate of 7-8%, which may be achievable barring a commodity price spike.

Corollary between credit and inflationary cycles

60%

Credit Growth Annual Inflation

25% 20% 15% 10%

40%

20% 5% 0% 2006 2007 2008 2009 2010 Source: General Statistics Office 0%

Balanced Monetary Policy required for Stability

Pressure on the VND is clearly rising, both from a fundamental level and from market forces. Despite pro-growth talk from policymakers, the State Bank of Vietnam has prioritized macroeconomic stability and will likely continue the recently started monetary tightening cyclethe SBV hiked the base rate 100bps in mid Q4. p Credit growth will also play into reining in inflation and easing pressure on the VND. By the end of 2010, credit expansion stood at 29% across the banking industry. Compared to 2009 when lending ballooned 38.0% year-over-year due to stimulus measures, credit growth has significantly moderated but has still contributed to the rise in inflation. The SBV will also have to prioritize its currency regime in 2011, aligning its credit growth targets, interest rate policies, and OMO to bring stability to the VND.

Money S M Supply l
Liquidity in the market plays a critical role in the VND/US$ x-rate
$2,500,000 M2 growth VND / US$ Unofficial Rate 20,000 20 000 $2,000,000 18,000 $1,500,000 16,000 22,000

$1,000,000 Jul-07 Jul-08 Jul-09 Jan-07 Jan-08 Jan-09 Jan-10 Oct-07 Oct-08 Oct-09 Jul-10 Oct-10 Apr-07 Apr-08 Apr-09 Apr-10

14,000

Source: State Bank of Vietnam, Currency Traders

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Macro Primer

Containing Inflation
The #1 policy priority for the government

Composition of Vietnams Consumer Price Index Increase

30

CPI Basket Weighting

Food & Foodstuff represent 40% of the CPI basket
Post and Culture, Sport & Telecom Ent. Other 3% 4% 3% Bev.and Cig. 4% Healthcare 5% Education 6% Garment & Footwear 7% Household goods 9% Transportation Building materials 9% 10%

25

Food and Foodstuff 40%

20

% Change YoY C

15

10

Food & Foodstuff -5 Source: General Statistics Office

Housing & Construction Materials

Transportation

Education

Others

CPI (Annual Avg)

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Investment Themes

Investing in Vietnam

Hyatt Regency Danang Resort and Spa Luxury Resort Complex 2011 Scheduled Opening Hotel Rooms: 200 Condominiums:182 Villas: 27

Attractive Elements for Investing in Vietnam g

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Investing in Vietnam

Attraction 1: Low Valuation Levels

Low valuations despite strong EPS Growth

Vietnam s Vietnams Trailing P/E Ratio

Valuations have trended down to a 4-year low

Valuation multiples have compressed considerably from a heady 43x P/E in 2007 to highly attractive levels of around 11x trailing P/E ratios as of the end of 2010. The relative valuation compared to other Asia Pacific emerging markets is particularly remarkable as Vietnam trades at a fraction of regional equity markets despite having similar or higher EPS growth. Equity valuations have trended down to a 4-year low. Our forward P/E projections for 2011 is approximately 9.5x for the VN-Index, in line with our 15% EPS growth forecast. Valuations are appealing compared to historical multiples and other Asian markets. Developments in the real economy are showing signs of improvement with GDP growth rebounding. rebounding Against the backdrop of consistent economic expansion, the combination of low valuations and strong EPS growth has created a unique window of opportunity to gain exposure to Vietnams equities market. It won t be long before word gets out and the swell of liquidity wont reaches the shores of Vietnam. In fact, we are already witnessing the initial indications of this with foreign trading volume as a percent of total volume creeping up from 5% in early 2010 to 15% by yearend. In mid-January 2011 net buying among foreigners further mid January 2011, accelerated to approximately 20% of total trading.

VN-Index P/E is at a 43% discount to its 5-year Average

50

40

30

Period average P/E 19.77x

20

10
31-Dec-2010 P/E 11.28x

0 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10

Regional Relative Valuations: P/E & EPS

Low valuations d L l ti despite strong EPS growth it t th
16

Philippines
14 2011 P/E

India Malaysia Indonesia Thailand

12

China

10

Vietnam Vi t
8 10% 15% 20% 25% 30% 35% 2011 EPS growth Source: Bloomberg, January 2011 IndochinaCapitalCorporation|page10 INDOCHINACAPITALADVISORS|page10 of22

Investing in Vietnam

Attraction #2: Final Privatization Drive

Well-managed SOEs and the Crown Jewels to be Equitized

Privatization process will resume in 2011

Prior to the last National Congress in 2006, there was a swell of SOEs that underwent privatization. However, most of the important privatizations occurred after the party summita cycle that is expected to occur again following the January 2011 congress. p g g y g In recent years, the process has slowed, mainly due to overly inflated valuations and no real funding needs, as the state provides financial support to SOEs. Vietnams fiscal deficit will remove SOEs safety net; and the g governments valuation expectations are now more in line with those p of the market, as the GFC has been a sobering experience. There are at least 60 SOEs with approved privatization plans. These include some of Vietnams Crown Jewels: BIDV, Vietnam Airlines, Saigontourist and Hanoitourist.

SOEs with an approved privatization plan

Agricultural Supplies Corporation Agriculture and Rural Development Construction Corporation Agriculture, Irrigation Mechanization, Electrification Construction Corporation Animal Husbandry Corporation Bach Dang Construction Corporation Bank for Investment and Development of Vietnam (BIDV) Ben Thanh Corporation Central Vietnam Corporation Construction Glass and Porcelain Corporation Construction Materials Corporation No 1 No. Construction Mechanical Corporation East Sea Fisheries Corporation Electrical Technical Equipment Corporation Ha Long Fisheries Corporation Hanoi Construction Corporation Sai Gon Transport Mechanical Corporation Song Da (Da River) Construction Corporation Southern Riverway Corporation State Corporations Under Ministries Sugarcane Corporation No. I Sugarcane Corporation No. II Thang Long Construction Corporation Traffic Works Construction Corporation Urban and Industrial Zones Development Investment Corporation (IDICO) Urban Infrastructure Development Investment Corporation Vegetable, Fruit and Farm Produce Corporation Vietnam Airlines Corporation Vietnam Automobile Industrial Corporation Vietnam Bank for Agriculture and Rural Development (Agribank) Vietnam Cement Corporation Vietnam Construction Investment Corporation for Water Supply and Drainage Vietnam Engine and Agricultural Machines Corporation (VEAM) Vietnam Fisheries Corporation Vietnam Forestry Corporation Vietnam Industrial Construction Corporation (VINAINCON) Vietnam Insurance Corporation Vietnam Machinery Installation Corporation (LILAMA Corporation) Vietnam Medical Equipment Corporation Vietnam Mulberry, Silkworm and Silk Corporation Vietnam National Chemical Corporation Vietnam National Salt Corporation Vietnam National Tea Corporation p Vietnam Paper Corporation Vietnam Steel Corporation Waterway Construction Corporation

Number of P i ti ti N b f Privatizations
Trickled off in recent years but expected to pick-up
710 725

Hanoi Housing Investment and Development Corporation Hanoi Tourism Corporation (Hanoitourist) Hanoi Trade Corporation (HAPRO) Hanoi Transportation Corporation (Hanoi Transerco) Industrial Machinery and Equipment Corporation

540

Infrastructure Construction and Development Corporation Irrigation Construction Corporation No. 4 Mekong River Delta Housing Development Bank Northern Food Corporation

250 125

260 210 200 190 125 75

240 80

Northern Riverway Corporation Sai Gon Agricultural Corporation p Sai Gon Construction Corporation Sai Gon Real Estate Corporation Sai Gon Tourism Corporation (Saigontourist)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: European Chamber of Commerce, Inst. of SE Asian Studies

Sai Gon Trade Corporation

Source: Steering Committee for Enterprise Renewal and Development IndochinaCapitalCorporation|page11

Investing in Vietnam

Attraction #3: Foreign Ownership Limitations

Foreign limits are filling up with few quality names remaining

Foreign Ownership Limitations

By yearend 2010, foreigners contributed approximately 15% of the total turnover of the VN-Index. As global markets have started to stabilize and valuations of Vietnamese equities have become attractive, foreign p participation is p p poised to escalate in 2011. However, there are limitations to foreign ownership of Vietnamese listed securities, with regulations varying among sectors. Foreign ownership of Vietnam's equity market
Ho Chi Minh Sector % allowed Financials Consumer Staples Industrials Health Care Materials Energy Consumer Discretionary Information Technology Utilities Total 33.9 47.8 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49 0 41.2 % owned 16.8 29.0 16.8 31.8 18.5 21.7 15.5 35.9 10.2 10 2 19.7 % allowed 38.9 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49 0 45.1 % owned 17.9 16.2 5.6 4.0 3.1 10.3 3.9 1.8 6.6 66 10.8 % allowed 34.7 47.9 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49 0 42.0 % owned 17.0 28.4 11.8 29.2 17.2 17.1 12.5 28.9 10.1 10 1 18.0 Hanoi Total

Some of the key holdings of a Vietnam listed portfolio have already been fully subscribed by foreign investors. This includes: VinaMilk, Exim Bank, Sacombank and Asia Commercial Bank. In addition to those that have reached their foreign limit, there are a number of attractive selections in the healthcare, consumer staples and information technology sectors that have less than 10% remaining in their unused foreign quota.

Select Stocks that have Reached the Quota

Ticker VNM EIB STB ACB Short Name VINAMILK VIETNAM EXPORT BANK SACOMBANK ASIA COMMERCIAL BANK GICS Sector Name Con Staples Financials Financials Financials Cur Mkt Cap (US$ mm) 1,603 758 724 1,082 Exchange HCM HCM HCM Hanoi Unused Foreign Quota (%) 0 0 0 0 Foreign Quota (%) 46 30 30 30

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Investing in Vietnam

Attraction #4: Value Creation despite Economic Headwinds

Strong value creation is being created amid a weak environment

Despite macro difficulties, several stocks have exploded

The VN-Index moved relatively sideways during the first half of 2010 and was repeatedly challenged by Vietnams macroeconomic woes. The downward pressure was most discernibly in H2 2010 as a result p y of Vietnams accelerating inflation rate, vulnerable balance of payments position and devaluing currency. By yearend, the VNIndex dropped by 2% to 489 for the year, making it the 2nd worst performing market in the world behind Shanghai. This is in stark comparison to other emerging markets, which reinflated from the lows of 2009 on the back of a tidal wave of foreign g inflows: the MSCI Emerging Markets Index rose 102% over the course of 2010. Despite the market downturn, several stocks listed on HOSE have significantly outperformed the market. There are stocks whose prices increased by more than 100% from 2009 to 2010: MSN ( (108%), BVH (113%), TBX (196%), VTL (170%) and HCC (108%). ), ( ), ( ), ( ) ( )

Stock performance vs. VN-Index (2009 2010)

Select stocks that have outperformed the VN-Index
150% 120% 90% 60% 30%
VN-Index

BVH MSN VIC VNIndex de

BVH

MSN VIC

0% -30% Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11

Source: Bloomberg

Intrinsic values enhanced given excellent performance

Companies are still growing fast with profitable operations despite the aftermath of the global economic crisis and its effect on the local market. They can sustain their earnings, growing by double digit rates (e.g. VNM, HAG and CII, etc.). The table on the right presents some of the companies who have the highest Return on Equity in the market. These companies with very strong fundamentals may offer attractive p y g y investment opportunities to long-term investors.

Company performance
Several companies are performing well in a weak environment
ROE 2009 50% 42% 37% 28% 48% 32% ROE 2010E 34% 46% 27% 31% 37% 31% NPAT % growth 18% 39% 13% 78% 19% 171%

Ticker VIC VNM FPT HAG SJS CII Source: Bloomberg

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About Us Economics

Indochina Capital Corporation

The Nam Hai Luxury Beach Resort Opened 2006 O d Hotel Villas: 60 Residential Villas: 40

Firm Overview

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About Us

About Indochina Capital

One of Vietnams Most Established Financial Services Firms

Fund Management & Advisory Services

Founded in 1999, the Indochina Capital Group is one of Vietnams leading financial services firms with diversified fund management and financial advisory businesses In 2010, Indochina Capital formed a strategic businesses. 2010 partnership with ORIX Corporation, one of Japans leading financial services firms. Business Categories: Indochina Capital manages several funds, including three private, closeended real estate funds with a total committed capital of approximately US$500 million from large global financial institutions, as well as a series of equities focused funds and managed accounts totaling US$58 million in funds under management. Real Estate Fund Management Equities F d Management E iti Fund M t Advisory and Finance Services Infrastructure Advisory and Investment Indochina Capital and its affiliates have a countrywide footprint with offices in Hanoi, Danang and Ho Chi Minh City. We are represented by over 200 professionals both expatriates and local Vietnamese to realize our investment activities.

Indochina Land
Indochina Land Holdings US$42 mm Closed Apr-05 Private LLC Indochina Land Holdings 2 US$265 mm Closed Nov-06 Private GP / LP Indochina Land Holdings 3 US$180 mm Closed Oct-10 Private GP / LP

Equities
Indochina Capital Investments SPC US$19.1 mm NAV Dec-10 Private Segregated Accounts Indochina Capital Vietnam Holdings US$23.5 mm NAV Dec-10 Public Listed LSE Main Market Mekong Portfolio Investments Ltd US$6.1 mm NAV Dec-10 Private Segregated Accounts UW Indochina Vietnam V Ltd US$5.7 mm NAV Dec-10 Private Segregated Accounts

Assets Under Management as of December 2010

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About Us

About Indochina Capital

Fund Management & Advisory Services

Business Divisions
Indochina Land, the group's real estate division, is Vietnam's premier real estate development and fund management firm, developing and financing real estate projects covering the full range of property types from multi-family residential and mixed-use commercial (retail and office) developments to hotels, resorts and leisure facilities. Indochina Land, the sponsor of Vietnam's first real estate fund, currently manages three private, closed-ended funds with approximately US$500 million of committed institutional capital, facilitating over US$2 billion in property development completed, under construction or in the development pipeline throughout Vietnam. Largest real estate fund manager in Vietnam primarily focused on residential, retail, hospitality and office sectors Recognized by Euromoney as Best Developer in Vietnam and Top 10 in Asia Personalized investment management services for individuals and i tit ti d institutions Private Equity investments for institutional clients

Indochina Land

Indochina Capital Advisors

Indochina Capital Advisors, Indochina Capital's equities division, manages a diversified portfolio of public and private securities in Vietnamese companies. These emerging corporates include listed and prelisted companies, privatizing state-owned entities, and private companies and ventures. Indochina Capital Advisors offers personalized investment management services to individuals and institutions, which are provided with preferred access to the equities markets of Vietnam.

Indochina Infrastructure

Indochina Capital formed Indochina Infrastructure Management in 2008 to invest in and advise on infrastructure related projects in Vietnam. Indochina Infrastructure's core platforms include projects in environmental, transportation and social infrastructure sectors such as water treatment plants, seaports, and healthcare facilities. The division's key role is to bridge the gap between foreign technical expertise and investment capital and the broad network of local enterprises with attractive infrastructure investment opportunities. Indochina Infrastructure also provides advisory services to nongovernmental donor agencies working with Vietnamese authorities, helping to pioneer the framework for Public-Private Partnerships in infrastructure related investments.

Infrastructure advisory services focusing on environmental, transportation and social sectors Private Equity facilities for institutional clients

Indochina Finance & Investment

Indochina Finance & Investment Limited (IFI) is the investment banking division of Indochina Capital, providing affiliated companies and third party clients with project financing, financial advisory, and market entry services. Typical clients are large- and medium-sized multinational corporations looking to execute cross-border transactions such as setting up a branch, distribution, or manufacturing base, or acquiring an existing business in Vietnam. The firm was contracted by Morgan Stanley, Kajima, Shi i and other prominent multi-nationals as market entry consultants and advisors on K ji Shimizu d th i t lti ti l k t t lt t d d i investments in the Indochina region. In addition, IFI has arranged more than US$160 million of nonrecourse project financing for Indochina Land developments and acquisitions.

Finance arrangement services for affiliates and third party clients Financial advisory services and market entry solutions for multinational corporations and domestic enterprises

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About Us

Indochina Capital
Board of Directors

Dr. Marc Faber, Chairman A well-known economist, author, and investment advisor, Dr. Faber is often noted for his contrarian investment approach. Dr. Faber is associated with a large number of funds and institutions around the world including the Iconoclastic International Fund, Baring Chrysalis Fund, Overlook Partners Fund, d th I F d and the Income Partners Global St t P t Gl b l Strategy Fund. Dr. Faber publishes a widely read monthly newsletter The Gloom Boom & Doom Report and he is the author of several books, including Tomorrows Gold which was a 2002 bestseller.

Peter R. Ryder, Chief Executive Officer Prior to forming Indochina Capital from 1992 1998, Peter was a partner in two New York-based investment companies active in investing in Vietnam across various sectors, including realestate, construction, IT, consumer services and products, banking and education. From 1983 1992, P t 1992 Peter was with Salomon Brothers real estate ith S l B th l t t finance group. As Director of the Asia-Pacific region in Tokyo (19871990), he was responsible for US$3 billion of investment in office, retail, residential and hotel projects. He was formerly the Chairman of the American Chamber of Commerce, helping to conclude the1991 US-Vietnam Trade Agreement. Richmond (Rick) Mayo-Smith III, Managing Director Prior to launching Indochina Capital from 19911999, Rick operated an investment firm in HCMC and Hong Kong which advised clients, invested-in, and developed projects valued at over US$100 million in real estate, tourism, building materials, and food/beverages. During this time, Rick also acted as an advisor to time Citicorp Capital and Morgan Stanley, with responsibility for sourcing deal flow in the Indochina region with an emphasis on Vietnam. Rick was the first Chairman of the HCMC American Chamber of Commerce in Vietnam.

Raymond Burghardt, Independent Director Ambassador Burghardt is a non-executive member of Indochina Capitals board of directors. From 2001 2004, he served as U.S. Ambassador to Vietnam. Ambassador Burghardt is also the Director of EastWest Seminars at the East-West Center. He was formerly the Director of the American Institute in Taiwan. In addition, he previously served in diplomatic posts in China, Philippines, and South Korea. Ambassador Burghardts earlier diplomatic assignments included the role of Special Assistant to President Reagan and Senior Director of Latin American Affairs on the National Security Council staff. Hiroyuki Sakai, Independent Director Hiroyuki is Executive Vice President of ORIX Corporation, a Japanese integrated financial services group headquartered in Tokyo, and is overseeing its South East Asian private equity investments. Hiroyuki is also President and Director of ORIX (China) Investment based in Dalian, responsible for a range of p g investment banking activities including real estate development. Hiroyuki has been with ORIX all his career having worked in China for 5 years in the 1980's as Director of a JV with CITIC, and in the USA for 13 years. Prior to returning to Tokyo in 2006, he was Deputy President of ORIX USA Corporation.

Ninh Quang Nguyen, Director of Government Relations Ninh has 15 years of experience with foreign investment, government relations, licensing and project management in Vietnam. Ninh currently is the General Director of Indochina Resorts Limited, the Vietnamese entity which owns our flagship resort, The Nam Hai, and p y has overall responsibility for local relations in the Central Coast and the South. Prior to joining Indochina Resort (Hoi An) Ltd, Mr. Ninh worked for My Duc Ceramics Joint Venture Company, a US$37 million foreign invested project funded by Morgan Stanley, which Mr. Ninh played an important role in establishing.
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Indochina Capital Advisors

Montgomerie Links Vietnam Golf Course & Estates Opened 2009 O d Golf Course: 18-Holes Villas: 66

Equities Division q

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Equities Division

Indochina Capital Advisors

Listed Securities and Private Equity

Executive Summary
Indochina Capital Advisors (ICA) offers investment management services to individuals and institutions via three distinct products: Listed Equities Funds (Institutions) Private Equity Investments (Institutions) Managed Accounts (Individuals) ICA has been engaged in providing investment management and advisory services since 2004. Our mission is to be the preeminent Vietnam-focused equities fund management company by generating Our board members include Dr Marc Faber and Francois Bohn both Dr. Bohn, experienced emerging market investors. The two other board members who review our portfolio investments include Peter Ryder (CEO) and Richmond Mayo-Smith (Managing Director), both of whom have been investing in the Vietnamese market for nearly twenty years. Our investors are provided with preferred access to the equities markets of Vietnam, which has recently emerged as one of Asias great success stories, as evidenced by consistent economic growth driven by both exports and domestic consumption. Vietnam, the worlds 13th most populous nation, has highly compelling investment fundamentals based on sustained economic growth, demographic dividends, socio-political stability and dynamic consumer growth. What attracts us, and our investors, to Vietnam are these underlying building blocks that create q pp y unique investment opportunities for investors that can effectively integrate local networks and knowledge with international investment best practices. Philosophically, we believe our Vietnam focus and world-class investment capabilities enable us to provide superior asset management and client services. Our guiding investment principles p g ,p p y , g include active portfolio management, proprietary research, longterm strategies and team oriented decision-making. strong investment performance across the equities asset class while class, providing exceptional customer service and delivering excellence in all that we do. Our vision is to grow our funds under management, including individual managed accounts, listed equities funds and a private equity program, establishing a sizeable and best-in-class operation managed by high-quality professionals with uncompromising integrity. Our investment spectrum covers listed equities, pre-IPO and OTC equities, as well as private equity. Preferred sectors are industries that target domestic consumption or are export-oriented, allowing us to capture Vietnams dynamic growth as an emerging market. ICA manages funds and client accounts and provides exposure to a diversified portfolio of attractive equity and equity-linked securities of Vietnamese companies. companies

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Equities Division

Indochina Capital Advisors

Managed Accounts

Managed Accounts
Through our Managed Accounts services, we construct and manage a portfolio of equity investments, provide access to investment opportunities and monitor market developments Investors are offered developments. discretionary portfolio management services or exposure to our actively managed model portfolio. ICAs over-arching investment strategy for Managed Accounts is to focus on well managed companies with strong growth prospects that are well-managed priced at reasonable valuation levels and maintain significant trading liquidity. More specifically, we seek companies with the following characteristics: Dominant market position: th company maintains a D i t k t iti the i t i commanding share of a particular sector or niche High returns on capital: an economic returns model is built to ascertain the Return on Invested Capital of the firm Attractive sector fundamentals: the growth and profitability potential of the sector are thoroughly analyzed Appropriate levels of debt: methodical balance sheet analysis is performed to evaluate the risks associated with leverage Entry point at discount to intrinsic value: a variety of methodologies are deployed to determine the intrinsic value of the company Indochina Capitals Track Record with Managed Accounts 2005 2006 2007 2008 2009 Average ICA Managed Accounts 68.8% 173.0% 173 0% 45.5% -53.0% 31.0% 54.3% VN-Index 28.5% 144.5% 144 5% 23.3% -66% 56.8% 37.4% The Managed Accounts division is led by Mr. Nikhil Singh who has over 15 years of emerging markets equities investment experience and a strong track record He is supported by our long-serving portfolio record. long serving managers with extensive local and international fund management experience. Our Managed Accounts investment performance has outperformed the broader index over the past five years:

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Equities Division

Indochina Capital Advisors

Private Equity

Private Equity
ICA is currently performing due diligence on various private equity investment opportunities in the Indochina region, with an aim to launch a private equity fund in 2011, meanwhile providing investment 2011 management services on a non-fund basis for institutional investors deploying capital into Vietnam. The preferred focus is privately negotiated direct investments and direct secondaries in equity or equity linked instruments in innovated high growth companies operating in the middle market sector of Vietnam The basic outline of our investment Vietnam. criteria follows simple bottom-up investment principles: Business Characteristics Aligned and talented management team with proven expertise Market l d M k t leaders and significant growth potential d i ifi t th t ti l Fully developed products or service offerings Financial Characteristics Meaningful revenues (US$10-25 million) High ROE and Strong EBIDTA performance (US$1-5 million) Use of Funds Working capital purposes, including expansion/development Recapitalization and/or balance sheet improvement Strategic acquisitions or production capacity investments Transaction Structure Initial investment size in the range of US$5-10 million Meaningful minority ownership (10-49%) Senior equity/equity linked with protective governance provisions Growth & Expansion Capital Financing Financial and strategic support to established businesses with the potential for outstanding value growth Typically this is accomplished through a significant minority share to help a business to achieve growth ambitions, restructure shareholdings, release equity or change the balance of equity to debt
IndochinaCapitalCorporation|page21

ICA is pursuing investments that fall into the following three categories: Pre IPO & Privatizations IPO financing and privatization sponsorship The State Capital Investment Corp. manages the privatization process in Vietnam and has over 900 companies currently in its portfolio of which it plans to divest The IPO market has been extraordinarily active in Vietnam with 89 offerings in 2008 and 122 in 2009 Direct Secondaries ICA maintains close relationships with private equity firms operating in the region and is well positioned to be a key provider of liquidity for funds seeking an exit due to the end of a funds life or for other reasons There are certain benefits from this approach such as (i) management familiarity in working with financial investors and (ii) being the beneficiary of companies having been upgraded in the areas of governance and operations

Investment Themes

Indochina Land

Real Estate Division

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Real Estate Division

Indochina Land
Vietnams leading real estate fund manager and developer

Executive Summary
Indochina Land is the real estate division of Indochina Capital, developing and financing real estate projects including residential, retail, office, hotels residential retail office hotels, resorts and leisure Today Indochina leisure. Today, Land manages three private, closed-ended funds with nearly US$500 million of committed equity, facilitating more than US$2 billion of projects in operations or under development in Vietnam. Our core strategy is residential plus where we develop stand alone forresidential stand-alone for sale residential projects or combine for-sale residential with other property types such as retail, office, hotels and resorts. This strategy allows us to capitalize on the significant imbalance between supply and demand in the residential sector. It also enables us to limit fund equity injections and enhance our returns through the optimal use of pre-sale equity financing. Specifically for Indochina Land Holdings 3, our focus will be the residential markets in Hanoi and Ho Chi Minh City, which are projected to be the worlds top two fastest growing urban economies from 2008 to 2025 by PricewaterhouseCoopers.
Indochina Land Holdings 3 (ILH3) Geographic Diversification Commencing disposition cycle 11 Investments Geographic Diversification Realized IRR on Investments Exited to Date Indochina Land Holdings 2 (ILH2) Capital Raised Closed US$265 mm November 2006 Hotel/Resort: 28%, Residential & Serviced Apartments: 28%, Retail: 5%, Office: 3%, Land Bank: 30%, Other: 6% North: 18%, Central: 43%, South: 39% One partial exit to date Indochina Land Holdings (ILH) Capital Raised Closed 9 Investments US$42 mm April 2005 Hotel/Resort: 32%, Residential: 39%, Retail: 6%, Office: 6%, Land Bank: 17% North: 4%, Central: 34% South 62% 59%

To realize our projects and promote our brand, we partner with some of the most prominent names in architecture and design, ensuring that we deliver quality projects and add value to Vietnams built environment. We pp y professionals and 200 have a team of approximately 30 investment p project-specific expatriates and local Vietnamese to implement our projects, making us one of the leading property developers in Vietnam and the region. We maintain an administrative office in Singapore in addition to project offices throughout Vietnam.

Capital Raised Closed Target Sector

US$180 mm October 2010 Urban Residential, Urban Mixed-Use with significant Residential components combined with Commercial Retail and Office space Hanoi and Ho Chi Minh City 2

Geographic Focus # of Committed Investments

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Real Estate Division

Indochina Land
Country-Wide Portfolio

Indochina Plaza Hanoi Mixed-Use Development 2011 Scheduled Opening Condominiums: 390 Retail (NFA): 18,000 m2 Office (NFA): 14,400 m2

Indochina Riverside Towers Mixed Use Mixed-Use Development Opened 2008 Condominiums: 95 Office (NFA): 6,200 m2 Retail (NFA): 4,600 m2 Hyatt Regency Resort and Spa Luxury Resort Complex 2011 Scheduled Opening Hotel Rooms: 200 Condominiums:182 Villas: 27

River Garden Ri G d Urban Residential Opened 2009 Condominiums: 212 Retail (NFA): 3,800 m2

The N Th Nam Hai H i Luxury Beach Resort Opened 2006 Hotel Villas: 60 Residential Villas: 40

Montgomerie Li k Vietnam M t i Links Vi t Golf Course & Estates Opened 2009 Golf Course: 18-Holes Villas: 66 IndochinaCapitalCorporation|page24

Real Estate Division

Indochina Land Holdings 3

Urban residential currently in investing period

ILH3
In the past decade, Vietnam has emerged as one of Southeast Asias greatest success stories for economic progress, posting consistently positive GDP growth Vietnams political and social stability make it one growth. Vietnam s of the worlds safest countries and the global investment community has responded by pouring record levels of Foreign Direct Investment into Vietnam, particularly the manufacturing and services sectors. What attracts us, and our investors to Vietnams property market are the us investors, underlying fundamentals of rapid urbanization, consistently positive economic growth, compelling demographics and political stability. Because of these strong fundamentals, Vietnams property market offers high-yielding investment opportunities to investors who can effectively integrate local contacts and knowledge with international development, finance, and management experience. Our investment strategy for ILH3 focuses on the primary urban markets of Hanoi and HCM City, with a particular emphasis on urban residential and urban mixed-use projects with residential. The pipeline deals that we have cultivated for ILH3 feature sites that have already been cleared or involve minimal relocation. Additionally, our projects are located in strategically attractive locations in both downtown districts as well as new urban areas.
University Endowments 15% IndochinaCapitalCorporation|page25 Family Offices 19% Pension Funds 50%

Global Institutional Investor Base p g g , Despite the challenging investment climate, our core base of global institutional investors continues to recognize the potential of Vietnams real estate market. 80% of the ILH3 Limited Partners have participated in our previous fund vehicles. The closing is a testament to our investors enduring confidence in the Vietnam real estate market and Indochina Land as a fund manager and premiere property developer. Our investment strategy targets large scale residential projects in Hanoi and Ho Chi Minh City, whereby we will reduce the funds required equity commitment by introducing foreign and/or Vietnam-based co-investors.

ILH3 Investor Composition

Other 2%

Investment Funds 14%

Indochina Infrastructure

Infrastructure Division

IndochinaCapitalCorporation|page26

Infrastructure Division

Indochina Infrastructure
Infrastructure Advisory and Fund Management

Executive Summary
Indochina Infrastructure Management was established in 2008 to advise and invest in infrastructure companies and projects in Vietnam. In line with the countrys economic growth the demand and need for country s growth, infrastructure related investments in Vietnam has grown significantly. An increase in population and general under-investment in infrastructure in recent years, combined with strong and sustained economic growth, growth improved international integration and rapid urbanization has integration, urbanization, resulted in increased pressure on existing infrastructure assets, strengthening the demand for infrastructure development in all sectors of the economy. Our infrastructure division focuses on investments in environmental, transportation and social infrastructure sectors such as water treatment plants, seaports, and healthcare facilities. Indochina Infrastructure provides advisory services to foreign and local enterprises active in Vietnams broad network of infrastructure related investment activities. The group advises governmental agencies on policy matters as well as local and foreign companies on their merger and acquisition strategies. Social Infrastructure Education Healthcare Ports and logistics zones Transport Bridges Highways
IndochinaCapitalCorporation|page27

Fund Management The Indochina Infrastructure team has concentrated on providing advisory services to international investors developers investors, developers, multilateral institutions and government agencies in Vietnam. We currently offer a broad range of advisory services to companies looking to make investments in or do business related to infrastructure in Vietnam, including: deal sourcing, Public Private Partnership consultation, consultation financial arrangements (debt and equity) feasibility studies equity), and market entry. With the assistance of our new corporate partner, ORIX Corporation, we intend to resume our efforts to raise an infrastructure focused fund in 2011. The focus for the fund will be to invest in core platforms within the environmental, social and transport sectors, with a particular emphasis on sustainability and renewable resources. Target Sectors Environmental Services Industrial Waste (solid and hazardous) Water supply and wastewater

Infrastructure Division

Indochina Infrastructure
Advisory Projects

Current Advisory Projects and Bids

Lead local advisor on a hallmark project to revise Decree78/108 governing Public-Private Partnerships in Vietnams infrastructure sector. In Q1 2010, along with our partners at the World Bank, we submitted a revised regulatory framework that is currently being applied to two pilot projects in the transport sector and later to three other projects in the environmental sector. Bidding to be a sub-contractor, responsible for the financial analysis and development of technical specification for a feasibility study on Danang Software Park. USTDA is considering the project proposal for funding.

World Bank / Ministry of Planning and Investment

Lead Policy Advisor

US Trade Development Agency

Financial Advisor

FMO / WACO

We are acting as financial advisor on arranging a US$7 million loan for a water project in Long An Province. WACO (the developer) has agreed on FMOs indicative terms for the loan. The Feasibility Study and Environmental and Social Assessment are currently being revised to meet IFC standards. The project is expected to reach financial close by Q1 2010. p y In this assignment, we will be serving as joint financial advisors with Credit Agricole in arranging US$700 million loan for the Trung Luong My Thuan expressway (the middle portion of the new HCMC-Can Tho expressway). Two of Credit Agricoles clients (construction companies) confirmed their interests in the project. Both have received ECA approval from their respective countries. Credit Agricole is currently drafting indicative terms for the loans. Expectation is for the first US$300 million loan to be proposed for 2010 with the remaining US$400 million for second half of 2011. In the process of forming a JV with Mazars to bid for the project, which will provide support to the Ministry of Finances Project Management Unit in monitoring and qualifying a number of Local Development Investment Funds to receive ODA funding from the World Bank for their infrastructure projects. Our proposal was submitted in Q3 2010, and the contract award is expected to be announced in Q1 2011.

Financial Advisor

BIDV / Credit Agricole Highway Project

Financial Advisor

World Bank / Ministry of Finance

Financial Advisor

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Investment Strategy

APPENDIX I The Growth Story

Six Senses Con Dao Luxury Beach Resort Opened 2010 O d Hotel Villas: 35 Residential Villas: 15

Strong Economic F d St E i Fundamentals t l

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Growth Story

Regional Perspective
Vietnam Leads Southeast Asias Economic Rebound

Southeast Asian Rebound

In the face of a global economic slowdown, Southeast Asia is demonstrating impressive strength and resilience compared to other parts of the world. While there is indeed slower economic growth in Southeast Asia than in recent years, the global crisis has had less of a relative impact on the region, especially when compared to economies in the West. Southeast Asias dependency on exports has negatively impacted GDP growth. However, the regions banks are relatively healthy, and g , g y y, the allure of cheap labor, natural resources and low trade barriers, coupled with strong domestic demand, are attracting investors. Southeast Asias resilience to the downturn was evidenced by a sharp rebound in GDP growth in 2010, a trend which is forecasted to continue with aggregate growth for the region estimated at 5.3% in 2011, according to the Asian Development Bank. , g p

Vietnams Regional Comparison

Vietnam achieved GDP growth of 5.32% in 2009, significantly stronger than many of its Southeast Asian neighbors. Along with China, India and Indonesia, Vietnam is leading Asias economic recovery and is one of the few countries in the world that has not experienced a year on year contraction in GDP year-on-year GDP. While all ASEAN economies were effected by the global downturn, Vietnam produced steady GDP growth in 2009 and 2010, nearly rebounding to pre-crises levels. Growth in 2011 is expected to expand to 7.0%.
8.5% 5.3% 6.7%

Thailand
-2.2%

Vietnam: Consistently Strong Growth

As the fastest growing economy in Southeast Asia in 2009, Vietnams economic growth has rebounded further in 2010 and will continue to lead the ASEAN pack in the years ahead. Vietnams GDP growth rate reached 5.32% in 2009, outperforming projections from the Asia Development Bank and the International Monetary Fund. For 2010, Vietnams GDP growth rate accelerated from 5 83% in 2010 5.83% Q1 to 6.4% in Q2 and then further to 7.2% in Q3 and 7.3% in Q4, boosting yearend growth to 6.7%. GDP Growth for 2011 is expected to exceed 7.0%.

Southeast Asias auto manufacturing hub

15%

Vietnam Low wages and high literacy rates are attracting electronics companies, with the domestic economy buoyed by an emerging middle class Strong manufacturing base moving up the value chain
5.0%

Asian Attraction: Economic growth in Southeast Asia is has successfully rebounded with from the global financial crisis

GDP Percent Change Per Year 091 102

Country

Well-educated and W ll d t d d English-speaking workforce make it a hotspot for outsourcing centers

6.2%

.9%

Philippines

Malaysia
-1.2%

6.0% 6 0%

Singapore As a major financial -2.1% services center and export-led economy, the impacts of the global recession were acute but the rebound has been even sharper

4.5%

Indonesia

Vast natural resources of copper, gold, coal and nickel fuel the economy
Source: DBS, November 2010

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Growth Story

GDP Growth
Manufacturing bounced back in 2010

Composition of Vietnams GDP

Manufacturing Construction Hotels and restaurants 10.0% 9.3% Real estate, renting and business activities Wholesale and retail trade Transport, storage and communications Education and training Others Agriculture, forestry & fishery Mining and quarrying Electricity, gas and water supply GDP

8.4% 8.2% 8.0% 7.3% 6.8% 6.9% 7.1% 7.8%

8.2%

8.5%

6.8% 6.3%

6.0%

5.8% 5.3% 4.8%

4.0%

2.0%

0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

-2.0% Source: Bloomberg IndochinaCapitalCorporation|page31

Growth Story

Comparative Analysis
Vietnam is an Attractive Emerging Market Investment Destination

GDP Growth (% change year-over-year) G G )

Consistently one of the fastest growing economies in Asia
12% 5-Year Avg (20062010) 9%

Consumer Expenditure (% change year-over-year)

Vietnams consumer society has emerged and is driving growth

12% 10% 8%

5-Year Avg (20062010)

7.0%
6%

8.4%

6% 3% 4% 2% 0% 0%

Source: HSBC, October 2010

Source: HSBC, October 2010

Top Investment Destination Survey Ranking T I t t D ti ti S R ki

Vietnam is the No. 1 investment target following the BRICs
Country Vietnam Indonesia do es a Mexico Argentina Saudi Arabia South Africa Nigeria Malaysia United Arab Emirates Turkey 2010 1 2 3 4 4 6 7 8 8 8 2009 1 6 3 12 10 4 2 5 2 8 2008 1 5 2 8 10 8 12 12 3 9

Age St A Structure of Major Asian Countries t fM j A i C ti

Vietnams demographic dividend will drive economic growth
< 14 Japan Hong K H Kong Singapore China Indonesia India Vietnam 0% 20% 40% 60% 80% 100% 15-24 25-39 40-59 > 60

Source: Economist Intelligence Unit, September 2010 Survey

Source: U.N. Population Fund IndochinaCapitalCorporation|page32

Growth Story

Foreign Direct Investment

Disbursed FDI has Remained Steady

Foreign Direct Investment in Vietnam (US$ Billions)

Committed FDI has Declined

Predictably, foreign direct investment (FDI) in Vietnam suffered a sharp decline during the global downturn, as multinationals were forced to turn their attentions inward, abandoning or postponing investment projects overseas to deal with p p j problems at home. In 2010, foreign investors registered US$19 billion in new FDI in Vietnam a 14% reduction compared to 2009, and a steep drop from the real-estate driven boom of 2008, which ended with a record-setting US$71.2 billion of registered FDI. However, the pie-in-the-sky FDI p j , p y projects witnessed in 2008 ( (i.e. billion dollar real estate projects, etc.) have faded away.

Disbursed FDI has held steady

$80 Registered FDI Disbursed FDI # of Projects 2000

$ $60

1500

$40

1000

$20

500

$2006 2007 2008 2009 2010 Source: General Statistics Office

but Disbursed FDI has Increased

Despite the decline in pledged FDI over the past two years the years, amount of FDI actually disbursed not just committed in Vietnam has remained remarkably steady through boom, bust and recovery. Disbursed FDI in 2010 reached an estimated US$11.5 billion, a 10% increase compared to 2009 and, surprisingly, a near-identical number to the amount disbursed during the irrational exuberance witnessed in 2008 2008. The composition of FDI projects is returning toward the previous standard, with the manufacturing sector attracting 46% of registered FDI and real estate receding to 34%. A return to the status quo of the previous decade may seem the antithesis of progress, but it is important to note that Vietnams progress Vietnam s manufacturing sector is not what it used to be: high value-added products like microprocessors and laptop components are supplanting low value-added T-shirts, handbags and plastic dishes.

% o Foreign Direct Investment pe Secto of o e g ect est e t per Sector

FDI into Tech Manufacturing
80% Manufacturing Real Estate All other Areas 60% %

40%

20%

0% 2005 2006 2007 2008 2009 2010

Source: General Statistics Office IndochinaCapitalCorporation|page33

Growth Story

The Current Account

Structural trade deficit due to importation of intermediate products for export items

Export / Import Turnover (US$ Billions)

Quick rebound in exports following the Global Financial Crisis
$90

Trade Deficit (US$ Billions)

Structural deficit in current account
2000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$60 -$6 Export Import

$30

-$12

Raw material imports for inputs into export products exacerbates the trade deficit

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -$18 Source: General Statistics Office Source: General Statistics Office

Export Value of Non-Oil Export Items (US$ Billions)

Vietnam has a diversified basket of export items and is moving up the Value Chain
$12 2006 2007 2008 2009 2010

$8

$4

The contribution of computers and electronics to Vietnam's export turnover is steadily i t i t dil increasing, moving i i Vietnam up the value chain. This is also reflected in the changing landscape of FDI, with new investments targeting high-tech manufacturing sector

$0 Textiles Source: General Statistics Office Seafood Footwear Computers/Electronics Electrical Wires/Cables Plastic Products Handbags/Luggage

IndochinaCapitalCorporation|page34

Growth Story
GDP Per Capita (US$)

Emerging Middle Class

Vietnam is also attractive as a consumer market

Demographic Dividend
Population of nearly 90 million
80+ $1,200 $1,024 $835 $1,074 70-74 60-64 60 64 Age class 50-54 40-44 30-34 20-24 10-14 0-4 Female Male

Rising incomes on par with economic expansion

$1,400 $1,200 $1,000 $800 $600 $402 $400 $200 $0 2000 2002 2004 2006 2007 2008 2009 2010f $552 $440

Official incomes are hard to pin down in an opaque market like Vietnam, and GDP per capita in the urban areas is more than double the national average
$725

Source: General Statistics Office

5 4 3 2 Source: General Statistics Office

1 0 1 millions population

Total Retail Turnover (US$ Billions) ota eta u o e o s)

Vietnams emerging middle-class is driving retail sales
$90 2008 2009 2010 Year-over-Year Growth 28%

Modern Retail Space (sq m) ode eta )

Growth in modern retail illustrates Vietnams ballooning consumer society
600,000 500,000 26% 400,000 300,000 200,000 22% 100,000 HCM City Modern Retail Space Hanoi Modern Retail Space

$60 24% $30

$Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: General Statistics Office

20%

2006 2007 2008 Source: CB Richard Ellis Vietnam, November 2010 2009 2010 2011f

IndochinaCapitalCorporation|page35

Investment Themes

APPENDIX II Investment Themes

Indochina Riverside Towers Mixed-Use Development Opened 2008 Condominiums: 95 Office (NFA): 6,200 m2 Retail (NFA): 4,600 m2

Equities Division E iti Di i i

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Investment Themes

Food & Beverage and Retail

Salient component of Domestic Consumption

Food & Beverage

Very important sector accounting for 47% of Consumption and 67% of total retail sales Excellent fundamentals across sector given (i) rising incomes g () g allowing the Vietnamese to upgrade the quantity and quality of food and beverages they consume and (ii) the significant export potential given produce cost differentials Branded fruit and vegetable juice: Vietnam per capita consumption of 1 liter vs 2 liters in Thailand, 20 liters in the U.K. and 40 liters in the U.S. 0 S Low per capita consumption of soft drinks at 9 liters per annum vs 15 in China and 70 in the Philippines Regions highest mass grocery retail sales forecast at 123% by 2012 (BMI, 2010) Per Capita Food Consumption
Food consumption steadily rising on par with disposable incomes
$124 $123 $123 $122 $122 $121 $121 $120 $120 $119 $119 $118 $117 2008 2009 2010 2011 2012

Retail
Ranked as the most attractive retail market in the world in AT Kearneys 2008 GRDI study 13th most populous country, experiencing rising disposable p p y, p g g p income Retail sales to double from US$39 billion in 2008 to US$85 billion in 2012 according to RNCOS Modern retail chains account for only 20% of distribution, as compared to 90% in Singapore, 60% in Malaysia, 51% in China and 34% in Thailand. Highly fragmented market with maximum 3% market-share; conventional outdoor markets make up 90% of sales Distribution opportunities given lack of nationwide supply chains and policy directive to formal retail channels Share of Modern Retail in terms of Retail Sales
High growth potential for modern retailers
60% 60%

40%

20% 10%

0% 2007 Source: A.T. Kearney 2017 IndochinaCapitalCorporation|page37 INDOCHINACAPITALADVISORS|page37 of22

Source: General Statistics Office

Investment Themes

Infrastructure and Healthcare

Building blocks for successful development

Infrastructure Enablers
One of the least urbanized countries in Asia with 1 million migrants to major cities a year for next 20 years Given the long g g gestation p period for p j project investments, this , theme focuses on the eco-system of companies benefitting from the long-term building boom in Vietnam, and includes construction companies, building materials, equipment, design and other service providers Given Indochina Groups decade long experience in real estate development, opportunities in this sector are clear and strong relationships are already in place with target companies Low housing space per capita: urban living space of 11 sqm per capita vs. 17 sqm in Thailand; pipeline of infrastructure megaprojects

Healthcare
Significant growth potential, given a population of approximately 86 million in 2009, expected to be 99 million in 2018 Strong traditional medicines segment with potential to improve the non-prescription drugs market in the longer term. Improvements in pricing and regulatory environment to boost foreign companies interest and investment in the country. Health a d welfare a p o ty a o g e e g g middle-class. ea t and e a e priority among emerging dd e c ass Vietnam has only one full service, international standard hospital (FV Hospital in HCM City).

Forecast for Population Growth (in Millions)

Young and Growing
93 92 90 90 88 87 87 89

Health Expenditure Forecast (in US$ billions)

Increased spending on healthcare a byproduct of rising wealth
12 10 8 6 4 2 $8 $6 $9

$11

84 2008 2009 2010 2011 2012

0 2009e Source: BMI 2010 2010f 2011f 2012f

Source: General Statistics Office

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Investment Themes

Financial Services
Under-penetrated and deepening financial services sector

Financial Services Penetration and Density increasing from very low base
Only 15% of Vietnamese have bank accounts and total deposits to GDP is half the Asian average Rapid growth in system loans with CAGR of 21.9% between 2001 and 2009 The mortgage market is set to benefit from stabilized real estate prices and lo er long term interest rates as the Vietnamese choose stabili ed lower long-term to expand the diminutive living spaces they occupy (19% of Vietnamese live in temporary structures, 40% of population occupies under 36 sqm while urban per capita living space stands at 11 sqm) Life insurance as a percent of GDP stands at a meager 1% vs. China 2%, Singapore 6% and Hong Kong 8%; 95% of Vietnamese do not have insurance though 35% can afford the premiums % of Adults with Access to Financial Services
Low penetration leaves room for growth

Loans as a % of GDP
Increased leverage will spur further economic expansion

98% 131% 63% 77%

160%

59% 48% 42%

95% 70% 57%

29%

Vietnam

China

India

Thailand

Korea

Singapore

India

Vietnam

Thailand

Korea

Singapore

Korea

Source: World Bank

Source: General Statistics Office

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Contact Us

Peter R. Ryder P t R R d
Chief Executive Officer T: (84) 43 930 6399 E: peter@indochinacapital.com

Hawkins Pham
Investor Relations / Communications T: (84) 83 910 4855 E: hawkins.pham@indochinacapital.com

Ho Chi Minh City

Capital Place Floor 10 6 Thai Van Lung Street District 1 HCMC, Vietnam

Indochina Riverside Towers Danang, Vietnam An Indochina Capital development

Hanoi
Opera Business Center Floor 9 60 Ly Thai To Street Hoan Kiem District Hanoi, Vietnam

This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. It is the responsibility of any person or persons in possession of this material to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction. Prospective investors should inform themselves and take appropriate advice as to any applicable legal requirements and any applicable taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant to the subscription, purchase, holding, exchange, redemption or disposal of any investments. Information contained herein is believed to be reliable but no warranty is given as to its completeness or accuracy and views and opinions, whilst given in good faith, are subject to change without notice. Members of Indochina Capital and its affiliates, connected persons and employees may from time to time deal, hold or act as market-makers, advisers or brokers in relation to any investments or derivatives thereof or be otherwise interested therein thereof, therein. Past performance is not a guide to future performance and the value of investments and the income derived from them can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Change in exchange rates may cause the value of the investment to increase or decrease. Some investments may be restricted to illiquid, there may be no readily available market and there may be difficulty in exiting or liquidating these investments for an unforeseen amount of time.

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