Friday roundup — VietEcon

Vinamilk

This is a bit of an old story, but it continues to increase my love of Vinamilk. The company will export dairy to China. This is in addition to news that the company announced in June that it will build an organic milk farm in Laos.

The stock is trading at a forward P/E of 22x (according to Vietstock), 3% dividend yield, and some revenue growth (3% in 2018). the stock has done alright, but not amazingly so.

My very superficial take is that margins are too high in Vietnam, so that any investment abroad means lower margins/returns. So investors may be wary about paying for that sort of growth. I will have to do more research here. It is kind of puzzling.

Hanoi water

I have not posted about the Hanoi water crisis, but that doesn’t mean I don’t think it is serious. Environmental issues are going to be a bigger and bigger driver of social unrest, economic uncertainty and potentially new regulations.

Anyway, water in Hanoi’s southwestern districts was contaminated with styrene at dangerous levels, but that has been cleared up by the local government. The government has and will continue to supply clean water by trucks for a little while.

The water crisis plus other issues including air pollution are starting to piss people off in Hanoi. HCMC will likely see more of this as well, even though they haven’t had a big crisis like Hanoi’s water. Pollution is a serious threat, not just for health, but for the economy and for political stability. I feel like investors and governments are slowly starting to wake up to that fact. We will have to see if they wake up in time.

Homelessness in Ho Chi Minh City

We have a new census out of Ho Chi Minh, and it turns out that there are only 39 homeless people in the city. Problem solved! I bet San Francisco and Los Angeles would love to hold a census like this.

All kidding aside, statistics are boring, but super important. If an organization puts out bad statistics that people use to make decisions, then those decisions are going to be bad as well.

Let’s not pick on HCMC or Vietnam here. This isn’t a problem solely in developing countries. Take the US: Facebook inflated its video metrics, meaning it told its partners (media companies, mainly) that their videos were viewed many multiple times more than they were. 150% to 900% more. So let’s say i put up a video, and Facebook says it has been viewed 1 million times, I would probably start making a lot more of that sort of video, because think of all the advertising on that video.

It turns out that the video was viewed only 120,000 times. That’s a lot less viewers leading to less ad impressions. And a lot less money. Unfortunately, I already shifted lots of investment into making more videos without the potential revenue to back up this investment. Conclusion: I go bankrupt. Facebook is now paying a $40m fine for inflating these metrics.

Anyway, back to homelessness in Vietnam. The reason why there were so few families counted as homeless is because anyone who had any home at all, such as living under stairs with a partition of some sort, was counted as homeless. Or if you are living on the street but some family member had a home that you could go to, you aren’t homeless.

This is part of the 10-year census. Let’s see what other interesting insights the census has. More results will come out this year and the full printed census will be out in 2020.