Muốn doanh nghiệp bứt phá phải dấn thân - Bình Lê Vandekerckove, ASART Deal Advisory

Summary of YouTube Video: Vietnam Innovators - Jibin Le Vanderok (ASART Deal Advisory)

Key Concepts:

• Resolution 68: Vietnamese government initiative to empower private businesses.
• Household Businesses: Small, informal businesses in Vietnam not fully integrated into the formal economy.
• Bamboo Diplomacy: Vietnam's approach to maintaining stable international relations.
• M&A: Mergers and Acquisitions.
• Value Creation Plan: A strategy outlining how a merger or acquisition will generate additional value.
• F SBA: Share Purchasing Agreement.
• Ethical, Organic, Sustainable Farming and Sourcing: Agricultural practices that prioritize environmental and social responsibility.

1. Vietnam's Economic Restructuring and Adaptation

• Pace and Direction: The Vietnamese government is moving in the right direction with rapid but reasonable pace of reforms.
• Short-Term vs. Long-Term: While some worry about short-term difficulties (e.g., slow licensing), the long-term impact is expected to be positive.
• AI and Digitalization: The government is actively adopting AI and digitalization to support reforms. Example: New Terminal 3 at Tan Son Nhat airport.

2. Resolution 68: Empowering Private Businesses

• Scope: Resolution 68 covers a broad range of aspects, including culture and the role of private businesses as "soldiers on the front line of the economy."
• Key Pillars:
  1. Acknowledgement: Recognizing the importance of private businesses.
  2. Administrative Reforms: Cutting 30% of administrative costs for small businesses.
  3. Support: Providing incubation centers, accounting, and legal support.
  4. Legal Protection: Reducing the criminalization of private business activities, prioritizing administrative charges for business mistakes.
• Impact on Businesses: Aims to empower 5 million household businesses to become standard businesses, contributing to the economy through taxes and compliance.
• Addressing Fear: Acknowledges the fear among businesses due to investigations and charges, aiming to provide more legal freedom to entrepreneurs.

3. Trade Changes and Free Trade Agreements (FTAs)

• Vietnam's Openness: Vietnam is highly active in FTAs, having signed 17 in total.
• Bamboo Diplomacy: Vietnam's diplomatic approach provides stability in the overall environment.
• Trade Tensions: Trade tensions (e.g., between the US and China) are causing caution and slowing down decision-making.
• Diversification: Vietnam is diversifying its trading partners, engaging with Europe, China, Russia, and Asian countries.
• Vietnam as a Safe Bet: Despite global uncertainties, Vietnam is considered a safe investment due to its economic approach.

4. Shifts in Deal Activity (M&A and Investment)

• Global Trends: M&A activity has dropped globally due to uncertainties.
• Vietnam's Demand: Demand for deals in Vietnam remains, but the pace is slower.
• Capital Allocation: Investors are weighing options between the US, Europe, and Vietnam.
• Valuation Gap: A widening gap exists in company valuations due to differing interpretations of uncertainties. Sellers are reluctant to lower prices, anticipating future market recovery.
• Strong Companies: Companies with temporary revenue drops due to external factors should not have their valuations significantly impacted.
• Vietnamese Businesses' Needs: Many Vietnamese businesses don't need capital but seek know-how, strategic direction, and experience.

5. Sector-Specific Insights and Opportunities

• Resilient Sectors:
  • Media and Tech: Growing with social and behavioral changes.
  • Healthcare: Strong resilience due to the inherent need for health and care.
  • Education: Strong demand for education.
  • Logistics: High demand for acquisitions and consolidation, but complex due to regulations and management challenges.
• Nature of Deals: Deals often involve family businesses seeking exits due to lack of successors or professionally managed businesses seeking further growth.

6. Advice for Vietnamese Business Owners

• Get Plugged In: Connect with the ecosystem and familiarize yourself with market dynamics.
• Seek Expert Advice: Consult with experts who have knowledge, experience, and share similar values.
• Plan Ahead: Start planning early for future business goals, rather than waiting until late in the game.
• Be Cautious: Avoid prematurely disclosing plans or availability.

7. The Uniqueness of Doing Business in Vietnam

• Vietnamese Wisdom: A lot of Vietnamese business knowledge is not online but passed down through generations.
• Limited Applicability of Foreign Case Studies: Global case studies may not fully apply due to Vietnam's unique business dynamics and regulations.
• Country-Specific Valuation: Valuation models must be adjusted to reflect Vietnam's specific industry and country conditions.
• Independent Market: Vietnam, with over 100 million people, is an independent market with its own language and applications.

8. Capital Trends and Investment Hubs

• Traditional Investors: Japan, Singapore, and Thailand have consistently invested in Vietnam.
• Emerging US Investment: The US is increasingly becoming a top contributor, often through Singapore-based entities.
• Decline of Cayman Islands: Investments from the Cayman Islands have decreased, indicating a shift towards more transparent direct investments.
• Shift in Regional Hubs: Multinational companies are shifting their Southeast Asia hubs from Hong Kong or Singapore to Vietnam.

9. The Role of M&A Advisors

• Beyond Brokering: M&A advisory involves more than just connecting buyers and sellers.
• Comprehensive Expertise: Requires expertise in accounting, tax, markets, strategies, and finance.
• Value Creation: Creating a value creation plan is crucial for successful deals.
• Legal Understanding: M&A advisors must understand legal aspects and work with lawyers to find solutions.
• Communication Skills: Communicating complex matters in a simple way for business owners to understand.

10. Conclusion

Vietnam presents a cautiously optimistic outlook for investors and businesses. The government's reforms, particularly Resolution 68, aim to empower private businesses and foster economic growth. While global uncertainties and trade tensions exist, Vietnam's proactive approach to FTAs and its unique market dynamics make it an attractive investment destination. Success in Vietnam requires understanding the local context, seeking expert advice, and adapting strategies to the country's specific conditions.

11. Jibin's Interest

Jibin expresses interest in learning more about the aquaculture business, particularly ethical, organic, and sustainable farming and sourcing practices, due to a perceived gap in the supply chain and her work with the ASART incubation center focusing on women-led STEM and sustainable agriculture.