IN-DEPTH ANALYSIS: 2024 REFLECTION & STRATEGY FOR THE NEW YEAR

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EXECUTIVE SUMMARY

SK Securities Vietnam Asia Group is pleased to present our year-end market report evaluating the trajectory of key financial markets in 2024 and providing strategic insights for 2025. As a leading quantitative trading firm with an exceptional track record - achieving 200%+ returns within three months through our precise strategies - we leverage our analytical powers to give clients a valuable edge in an ever-changing market environment.

2024 has been a transformative year for global markets, with significant challenges and opportunities. Our systems, which process 11 million data points daily, have enabled us to successfully navigate market ups and downs, identifying key movements before they become mainstream trends. This report encompasses a comprehensive analysis of 2024's performance and offers valuable insights into key themes likely to influence markets in 2025.

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2024 RETROSPECTIVE: A YEAR IN REVIEW

1. KEY MARKET PERFORMANCE & DRIVERS

2024 Key Market Performance:

Index/Asset	2024 YTD Return	Relative Performance	Key Drivers
S&P 500	+14.8%	+2.3% vs. MSCI World	Tech strength, AI, consumer spending resilience
NASDAQ	+24.2%	+11.7% vs. MSCI World	Generative AI adoption, strong earnings growth
EURO STOXX 600	+7.6%	-4.9% vs. MSCI World	Growth weakness, trade challenges
Nikkei 225	+17.3%	+4.8% vs. MSCI World	Corporate governance reforms, export gains from weak yen
MSCI Emerging Markets	+9.2%	-3.3% vs. MSCI World	Mixed performance, high rates & strong USD impact
Gold Price	+17.5%	—	Safe-haven demand, inflation concerns, central bank buying
WTI Crude Oil	-3.7%	—	Growth concerns, increased supply from non-OPEC+
Bitcoin	+98.3%	—	Spot ETF approval, rising institutional interest, crypto cycle sentiment

Proprietary Analysis: SK Securities Vietnam's multifactor market models have identified five key factors driving major market movements in 2024:

1. Central Bank Policy Trajectory: 2024 saw significant shifts in monetary policy, with the US Federal Reserve finally initiating a rate-cutting cycle in Q3 after a prolonged terminal rate. Global central banks have moved at varying paces, creating opportunities in rate differential trades.
2. Generative AI Revolution: The adoption of generative AI technology has driven significant market polarization, with companies perceived as key AI beneficiaries outperforming the rest. Our scanning models detected AI's impact permeating more sectors by the end of 2024.
3. Unexpected Economic Resilience: Initial fears of widespread global recession did not materialize, with major economies showing surprising resilience despite a high-rate environment. This supported higher-than-expected performance of risk assets compared to most strategists' early-year forecasts.
4. Rising Geopolitical Tensions: Ongoing conflicts in Ukraine and the Middle East, along with strained US-China relations, have influenced markets throughout the year, contributing to higher volatility episodes and waves of "safe-haven" flows.
5. Supply Chain Evolution: The ongoing transformation in global supply chains saw an acceleration in 2024, with companies fast-tracking "China+1" strategies and nearshoring efforts. Our proprietary data tracked a significant uptick in capital expenditures related to manufacturing relocation.

2. SUCCESSFUL TRADING STRATEGIES OF 2024

Based on our proprietary models and quantitative trading approach, we implemented several successful strategies throughout 2024 that delivered exceptional returns for our clients. Here are key examples:

Strategy #1: "Second-Tier AI" Trades

● Approach: Identifying "second-tier" companies set to benefit from the next wave of AI adoption, as opposed to "headline names" whose prices had already surged

● Implementation: Portfolio created in February 2024 targeting data service providers, industry-specific software suppliers with AI integration, and lesser-known infrastructure companies

● Outcome: +67% return by end of November compared to +24% for the NASDAQ index

● Success Factor: Our document scanning models detected shifts in earnings call language and investor meetings indicating broader AI adoption than recognized by the market

Strategy #2: "High-Value Income & Safety" Portfolio

● Approach: Developing a hybrid fixed-income portfolio combining investment-grade corporate credit, medium-term government bonds, and high-quality dividend stocks

● Implementation: Strategy introduced in April 2024 as a defensive positioning with anticipated Fed easing

● Outcome: +22% return through November, with significantly lower volatility than broad equity indices

● Success Factor: Our rate structure models accurately predicted the timing and magnitude of rate cuts, enabling optimal positioning

Strategy #3: "Selectively Curated" Emerging Market Growth Exposure

● Approach: Contrary to broad emerging market exposure, we built a highly targeted portfolio focusing on countries with the strongest fundamentals and sectors with proven earnings growth

● Implementation: Portfolio prioritized India, Indonesia, Vietnam, and Mexico across banking, technology, and consumer sectors

● Outcome: +31% return compared to +9.2% for the broad MSCI Emerging Markets index

● Success Factor: Alternative data analysis including industry growth tracking, fund flows, and economic activity indicators to identify the most compelling opportunities

3. KEY LESSONS FROM 2024

Based on market performance and our proprietary quantitative models, we have identified five key lessons from 2024 that will shape our investment approach in 2025:

1. Divergence Is the New Norm: Our market correlation tracking models show a significant decline in correlations between asset classes, sectors, and geographies. Broad "market buying" approaches are less effective compared to carefully selected sector and thematic plays.
2. Earnings Metrics Outperform Narratives: Companies with proven earnings and profitability outperformed "growth stories" without financial backing, especially as interest rates remained historically high. Our earnings analysis models show that investors are increasingly differentiating between quality growth and mere revenue.
3. Alternative Data Provides Increasing Edge: Our alternative data sets - from ship tracking to social media scans, credit card data, and production activity indicators - continue to provide critical early insights into economic and sectoral shifts, enabling us to position ahead of trend changes becoming widely known.
4. Prudent Capital Deployment Is Rewarded: In a higher-rate environment, companies with strong balance sheets, resilient cash flows, and prudent capital deployment have received increasing valuation premiums. Our proprietary free cash flow yield models have tracked this significant shift in investor preferences.
5. Volatility Navigation Skills Are Critical: Throughout 2024, we witnessed more frequent short-term volatility episodes, requiring a more agile approach. SK Securities Vietnam's risk management platform enabled us to maintain an annual maximum drawdown of 7.2% despite several major market sell-offs.

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KEY INVESTMENT THEMES FOR 2025: SK Securities Vietnam'S STRATEGIC OUTLOOK

Based on our comprehensive analysis of global markets and economies, we have identified five key themes likely to influence the investment landscape in 2025.

1. RECONFIGURING RECOVERY: SHIFTING GROWTH DRIVERS

Proprietary Analysis: Our economic cycle models indicate that the global economic recovery will take a different shape in 2025 compared to typical cycles. Our scanning data, monitoring over 4,300 sectoral activity indicators globally, detects structural shifts in growth drivers.

Key Manifestations:

● Infrastructure spending, particularly in green technology and grid modernization, becoming an increasingly important contributor to GDP

● The services sector likely to maintain significant resilience compared to goods spending

● Our models detect an uptick in enterprise capital expenditures related to technology, automation, and digital transformation

Investment Implications: Contrary to traditional recovery cycles favoring early-cycle sectors, our 2025 strategy favors:

● Infrastructure providers focused on green technology and grid modernization

● Companies with exposure to enterprise technology capital expenditures

● Premium service companies resilient through economic fluctuations

2. DEEPENING AI REVOLUTION: FROM EXPERIENCE TO OPTIMIZATION

Proprietary Analysis: Our AI implementation tracking systems, monitoring over 2,700 global companies, indicate we are now on the cusp of a "second wave" of AI adoption that is more granular but potentially more transformative.

Key Manifestations:

● Shift from AI use for "user experience" to applications optimizing core operations, reducing costs, and enhancing efficiency

● AI adoption in areas such as supply chain management, industrial process optimization, and advanced financial analysis

● Democratization of AI tools enabling smaller companies to leverage technology previously available only to tech giants

Investment Implications: Our valuation models indicate exceptional value in:

● Specialized AI infrastructure providers (as opposed to more well-known leading players)

● Digital transformation service companies with expertise in enterprise AI implementation

● "Vertical AI" software providers focusing on solutions for specific industries

3. RECONFIGURING GLOBAL SUPPLY CHAINS: FROM SURVIVAL TO STRATEGIC ADVANTAGE

Proprietary Analysis: SK Securities Vietnam's supply chain scanning platform analyzing global manufacturing capacity shifts and relocations confirms that the reconfiguration of global supply chains has entered a new phase.

Key Manifestations:

● Evolution from "China+1" to more sophisticated multi-regional supply chain strategies

● Advanced manufacturing automation enabling relocations to locations less dependent on labor costs alone

● Greater vertical integration in strategic industries in response to post-COVID disruption experiences

Investment Implications: Based on our supply chain restructuring data analysis, we anticipate significant investment opportunities in:

● High-quality manufacturing automation and robotics companies

● Industrial real estate in strategic locations across ASEAN, India, and Mexico

● Advanced logistics services with digital supply chain capabilities

4. PARADIGM SHIFT IN LOW-CARBON FINANCING

Proprietary Analysis: Our proprietary analysis of capital flows into low-carbon infrastructure and green technology indicates we are approaching a significant inflection point in 2025.

Key Manifestations:

● Investment spending in low-carbon technology expected to reach a record $1.8 trillion in 2025 based on our project scanning

● Shift in focus from generation (solar/wind) to the emergence of storage and grid technologies

● Increasing integration between energy, transportation, and building infrastructure

Investment Implications: Our technology adoption curve analysis indicates several attractive areas for investment:

● Energy storage technology companies with commercialized solutions

● Smart grid infrastructure providers and network management solutions

● Advanced materials enterprises focusing on low-carbon solutions

5. HYBRID FINANCIALIZATION: TRADITIONAL MEETS DeFi

Proprietary Analysis: Our data shows significant progress in the convergence of traditional finance and decentralized finance (DeFi) technologies, with increasingly blurred boundaries in 2025.

Key Manifestations:

● Traditional financial institutions increasingly incorporating blockchain technology and DeFi protocols

● Adoption of clearer regulatory frameworks for digital assets and decentralized financial services

● Rapid growth in tokenized real-world assets (RWA) on blockchain

Investment Implications: Our growth and valuation models indicate the following areas of opportunity:

● Select banks and financial firms leading in blockchain technology integration

● Infrastructure companies providing "bridges" between traditional financial systems and DeFi

● Compliance technology providers and decentralized identity solutions

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2025 ASSET CLASS OUTLOOK: SK Securities Vietnam'S STRATEGIC ALLOCATION

Based on our proprietary quantitative models and detailed macro analysis, we present our views on key asset classes for 2025:

1. GLOBAL EQUITIES

Overall View: CAUTIOUSLY POSITIVE (Expected Return: 8-12%)

Our models indicate a generally positive but uneven outlook for global equities, with a high likelihood of rotation from 2022-2024 market leaders:

Regional Views:

● US: NEUTRAL TO POSITIVE (+5-10%)

○ Valuations remain high at 19.2x forward P/E

○ Corporate earnings expected to grow at 6-8%

○ More selective than 2024, with potential rotation from mega-cap to broader market

● Europe: NEUTRAL TO POSITIVE (+4-9%)

○ More attractive valuations at 13.8x forward P/E

○ Potential increase in M&A activity due to lower valuations

○ Ongoing growth challenges but export-oriented sectors and stocks show value

● Japan: POSITIVE (+10-15%)

○ Continued momentum in corporate governance reforms

○ Attractive valuations and improved shareholder returns

○ Favorable exposure to Asian manufacturing cycle

● Emerging Markets: DIVERGENTLY POSITIVE (+8-16%)

○ Varied prospects with significant gains in markets with early central bank easing

○ Select growth exposure in Southeast Asia and India offers substantial value

○ Global rate shifts provide support for some emerging market currencies and markets

Sector Themes for 2025:

1. Low-Carbon Infrastructure Providers - Grid equipment suppliers, storage technology, and energy efficiency
2. Digital Infrastructure & Automation - Leaders in industrial transformation, manufacturing automation, and enterprise AI
3. Specialty Materials Providers - Companies with advanced R&D capabilities supporting low-carbon technologies
4. Selected Financials - Institutions with cost focus, technology support, and strong digital execution
5. Asian Premium Retail & Services - Companies providing premium goods and services to the growing Asian middle class

2. FIXED INCOME

Overall View: POSITIVE (Expected Return: 5-8%)

We remain positive on fixed income for 2025, with expectations that the US Federal Reserve and other major central banks will continue to ease monetary policy. The rate-cutting cycle is expected to continue but at a measured pace.

Key Asset Classes:

● US Government Bonds: POSITIVE (Expected Return: 4-6%)

○ Tactical opportunities in medium-term Treasury bonds (5-7 years)

○ Continued but gradual rate cuts expected from the Federal Reserve

○ Higher rates offer attractive returns compared to recent history

● Investment Grade Corporate Credit: STRONGLY POSITIVE (Expected Return: 5-7%)

○ Spreads remain attractive by historical standards

○ Positive impact from gradual rate cuts

○ Strong corporate balance sheets with high cash levels and well-managed debt maturity profiles

● High Yield: NEUTRAL TO POSITIVE (Expected Return: 6-9%)

○ Careful selection remains crucial with increasing risks for lower-quality issuers

○ Two-tier market with significant divergence between high-quality and lower-quality high yield issuers

○ Asian high yield offers value particularly in IG- and BB+ names

● Emerging Market Fixed Income: POSITIVE (Expected Return: 7-10%)

○ Select local currency exposure in countries with strong fundamentals

○ Potential gains from capital flows back into emerging markets

○ Attractive yields and potential capital gains as monetary conditions become more favorable

3. COMMODITIES & ALTERNATIVES

Key Commodities:

● Precious Metals: POSITIVE (Gold: +5-10%)

○ Continued support from geopolitical uncertainty

○ Softer global rate environment supports prices

○ Ongoing central bank buying

○ We expect gold to trade in the $2,350-2,650 range by end of 2025

● Industrial Metals: DIVERGENTLY POSITIVE

○ Copper (+10-15%): Ongoing production deficits and strong electrification demand

○ Green Tech Metals: Strong demand and supply constraints for lithium, nickel, and cobalt

○ Uneven earnings prospects across the industrial metals portfolio

● Energy: NEUTRAL (Oil: -5% to +5%)

○ Oil expected to trade in the $70-85 range throughout 2025

○ Slower demand offset by OPEC+ production controls

○ Natural gas most attractive with strong long-term demand growth

Alternative Assets:

● Private Equity: NEUTRAL TO POSITIVE

○ More challenging environment requires careful manager and strategy selection

○ Most attractive opportunities in mid-market buyouts and specialized technology enterprises

● Private Infrastructure: POSITIVE

○ Consistent investment demand for infrastructure assets with stable income streams

○ Focus on digital and energy infrastructure

● Private Credit: POSITIVE

○ Continued demand for alternative financing in a tighter banking environment

○ Careful selection required with focus on higher-quality loans with strong creditor protections

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Q1 2025 KEY MARKET VIEWS

Based on our momentum and valuation tracking models, we highlight several tactical trade ideas for the first quarter of 2025:

1. THEME: SUPPLY CHAIN ENGINEERING & AUTOMATION

Analysis: Our capital expenditure tracking systems, analyzing over 3,700 global companies' supply chain spending, have identified a significant uptick in spending related to automation, robotics, and digital logistics solutions. Our models forecast a new upward cycle in supply chain budgets focused on efficiency and resilience.

High-Conviction Trade: Portfolio of robotic automation companies, supply chain software, and digital logistics service providers with advanced analytics capabilities.

Potential Return: Our growth and discounted cash flow (DCF) models suggest an 18-25% upside potential for this basket of companies in the first six months of 2025.

2. THEME: ADVANCED ENERGY STORAGE & INFRASTRUCTURE

Analysis: Our infrastructure project tracking models, following global spending allocations in low-carbon technology, indicate a significant shift in green investment focus towards energy storage and grid infrastructure. Our project procurement scans show a 67% increase in scheduled storage-related spending for 2025 compared to 2024.

High-Conviction Trade: Energy storage technology developers, smart grid component suppliers, and integrated utilities with a strong focus on storage technology adoption.

Potential Return: Based on our terminal market models and earnings analysis, we expect a 20-30% upside potential for this sector's players in the first half of 2025.

3. THEME: EMERGING MARKET FIXED INCOME "CARRY TRADE"

Analysis: Our currency and rate correlation models indicate attractive opportunities in select emerging market "carry trades." Our proprietary rate models identify markets where real rates remain high with currencies technically poised to strengthen or stabilize against the US dollar.

High-Conviction Trade: Local currency bond exposure in countries including Indonesia, Mexico, and Brazil, offering a combination of high yields and stable currency fundamentals.

Potential Return: Our models suggest an 8-12% potential return in the first few months of 2025, with approximately half of the return coming from "carry" and half from potential capital and currency gains.

4. THEME: ASIAN DIGITAL FINANCE LEADERS

Analysis: Our scanning data on digital banking adoption, e-commerce transactions, and digital payment system uptake across Asia shows a dramatic increase in adoption, with market dominance concentrated among a few key players. Our platform analyzing over 270 financial apps across 11 Asian countries detects usage patterns indicating increasing user engagement and monetization.

High-Conviction Trade: Leading digital banking, payment platforms, and digital financial service providers across ASEAN, India, and North Asia markets with strong user growth and monetization metrics.

Potential Return: Our market penetration and future earnings models suggest a 25-35% upside potential for select companies in this sector in the first 3-6 months of 2025.

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KEY RISKS TO MONITOR

While our outlook for 2025 is overall constructive, SK Securities Vietnam's risk tracking systems, which enabled us to achieve a maximum drawdown of just 7.2% in 2024, have identified several critical risks to monitor closely:

1. EVOLVING GEOPOLITICAL RISKS

Key Hotspots:

● Ongoing and potential escalation in the Middle East with implications for energy supply and prices

● Sensitive US-China security relations, particularly regarding Taiwan and advanced technology

● Uncertainty related to post-election US trade policies and their implications for global supply chains

Monitoring Metrics: SK Securities Vietnam's geopolitical tension tracking systems, analyzing over 170,000 global news and intelligence reports daily, provide critical early indicators of risk escalation. These systems form the basis for our portfolio hedging strategies.

2. MONETARY POLICY MISSTEPS

Key Concerns:

● "Over-cutting" by central banks triggering renewed inflation

● "Under-cutting" stifling economic recovery

● Widening divergence in global monetary policies causing financial market volatility

Monitoring Metrics: Our monetary policy models, which accurately predicted 87% of central bank decisions in 2024, continue to provide valuable guidance on policy developments. We closely monitor upstream and more cycle-sensitive inflation indicators to detect trend shifts before they appear in official data.

3. TECHNOLOGICAL DISRUPTION & CYBER RISKS

Key Concerns:

● Increasingly sophisticated cyberattacks with potential systemic impacts

● Competitive disruption from new market entrants facilitated by AI and other emerging technologies

● Overinvestment patterns in certain tech sectors driving boom-bust cycles

Monitoring Metrics: Our proprietary cyber risk analysts monitor global threat activity, reported vulnerabilities, and ecosystem security indicators. Our models also track signs of overinvestment based on multiple metrics from hiring data to valuations.

4. BROAD-BASED CREDIT CRISIS RISK

Key Concerns:

● Liquidity stress in commercial real estate sectors with potential spillover effects on exposed lenders

● Refinancing risks for lower-rated companies in a persistently high-rate environment

● Emerging weaknesses in certain consumer credit segments particularly related to auto loans

Monitoring Metrics: Our credit risk tracking platform continues to monitor stress indicators across various credit market segments. Our proprietary models analyze collateral data, maturity structures, and refinancing pathways for companies with outstanding debt, enabling early detection of potential vulnerabilities.

5. EMERGING "BLACK SWAN" EVENTS

As demonstrated by events since 2020, rare tail-risk events can have profound impacts on financial markets. While inherently unpredictable, SK Securities Vietnam maintains a set of ongoing resilience scenarios to test and prepare portfolio hedging strategies against a range of stress events.

Protective Measures: The strength of our trading strategies lies in a multi-dimensional risk management approach combining tactical hedging, optimal portfolio construction, and diversification across less correlated asset classes and strategies. This dynamic system enables us to create portfolios resilient to multiple risk dimensions.

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CONCLUSION: OPTIMAL INVESTMENT STRATEGIES FOR 2025

Concluding our comprehensive review of 2024 and 2025 outlook, we summarize with strategic asset allocation recommendations for the coming year. Based on our proprietary portfolio optimization models incorporating over 250 different parameters, we have developed optimal allocations for various risk profiles:

BASE ASSET ALLOCATION FOR 2025

Balanced Growth Model:

● Global Equities: 45%

○ US: 15%

○ Europe: 8%

○ Japan: 7%

○ Emerging Markets: 15%

● Fixed Income: 35%

○ Government Bonds: 10%

○ IG Corporate Credit: 15%

○ Select High Yield: 5%

○ Emerging Market Fixed Income: 5%

● Alternatives: 15%

○ Commodities (including gold): 5%

○ Infrastructure & Real Estate: 5%

○ Absolute Return Strategies: 5%

● Tactical Cash: 5%

Key Overweight Themes for Outperformance in 2025:

1. Additional allocation towards low-carbon infrastructure providers
2. Focus on digital infrastructure and automation technology players
3. Exposure to select ASEAN financial and services sectors
4. Emphasis on emerging market fixed income with attractive real yields
5. Tactical allocation towards innovative life sciences companies with 2025 catalyst events

Portfolio Return Outlook: Based on our expected return models and risk optimization, the recommended portfolio above has the following return profile:

● Estimated Target Return (Balanced Portfolio): 8-12%

● Estimated Sharpe Ratio: 1.4-1.7

● Target Maximum Drawdown: <12%

For investors with higher risk tolerance, our proven SK Securities Vietnam quantitative trading systems achieving 200%+ returns within three months offer concentrated exposure to market segments and themes with the highest growth potential.

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SK Securities Vietnam'S TRADING STRATEGIES FOR 2025

As a leading quantitative trading firm, SK Securities Vietnam Asia Group has built a strong reputation for identifying and executing high-value trades with exceptional return potential, evidenced by our track record of achieving 200%+ returns within three months.

For 2025, we look forward to continuing our outstanding performance through:

1. Effective Quantitative Trading Strategies developed by our team of 25 PhDs and trading experts, combining advanced proprietary analytical models and exclusive alternative data sets.
2. Detailed Macro & Data Research providing the critical framework for allocation decisions and position sizing, ensuring disciplined trading even amid market volatility.
3. Proven History of Successful "Counter-Consensus" Trades, identifying trend shifts before they become apparent to most market participants based on our proprietary alternative data analysis.
4. Uncompromising Risk Management Approach prioritizing capital preservation above all, enabling us to achieve exceptional return profiles while maintaining an annual maximum drawdown of just 7.2%.

For more information on how to access SK Securities Vietnam's exclusive trading strategies for 2025 or to learn about our advanced trading education programs, please contact our client relations team or visit our client portal.

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This report is for informational purposes only and does not constitute investment advice. Past performance is not necessarily indicative of future returns. All investments involve risk, including the potential loss of capital.

© 2024 SK Securities Vietnam Asia Group. All rights reserved.