Vietnam EV maker VinFast’s shares surge in Nasdaq debut
Jamille Tran
[HO CHI MINH CITY] Vietnam’s electric automaker VinFast celebrated its debut as a public company on Tuesday (Aug 15), with its shares trading on the Nasdaq stock exchange in the US.
The initial public offering (IPO) became a reality after VinFast completed its merger a day earlier with Hong Kong-based special purpose acquisition company (Spac) Black Spade, in what was the largest M&A deal in the Asia-Pacific region so far this year.
It is also the fourth-highest for such Spac deals, according to data from Dealogic. VinFast had previously said that the merger gave the company a valuation of about US$23 billion.
The new stock, which uses the ticker symbol VFS, opened at US$22, more than double the Spac’s last close of US$10.45. As of press time on Tuesday night, it was still unclear how many of the company’s shares would be traded.
VinFast global chief executive Le Thi Thu Thuy, who rang the opening bell at Nasdaq in New York, said that going public is a reflection of a “powerful vote of confidence” in the company’s vision and potential.
While the merger with Black Spade will not generate additional capital, the Spac said the listing would “enhance VinFast’s global outreach by facilitating even wider access to capital”.
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The latest round of VinFast’s funding were pledges worth US$2.5 billion from its parent company Vingroup, Vietnam’s biggest private conglomerate, and the company’s founder Pham Nhat Vuong, the richest man in Vietnam.
VinFast said it had almost 55,000 orders globally as at end-2022 and is able to produce 250,000 electric vehicles (EVs) per year at its first plant in Haiphong in Vietnam.
It expects to sell up to 50,000 EVs this year – almost seven times more than what it managed in 2022 – and aims to break even by the end of 2024.
VinFast has shipped around 3,000 EVs to the US from the Vietnam plant, but only 137 units were registered in the market through June, according to data tracked by S&P Global Mobility.
Despite these slow sales, VinFast still managed to begin construction of its second plant – in North Carolina in the US – in July. The facility aims to be operational in 2025 and churn out 150,000 EV units per year in the first phase.
Nguyen Manh Dung, head of institutional equity sales at Maybank Investment Bank in Vietnam, told The Business Times in an interview in June that it would be difficult for VinFast to gain acceptance in overseas markets in the initial stage because of consumers’ lack of familiarity with the brand.
But those headwinds have not hindered VinFast’s global ambition. In May, the company signalled its intent to spread its wings to South-east Asia’s fast-growing electric mobility market, a move after its big push into the US and Europe had varying degrees of success.
Dung said that VinFast’s main growth market in South-east Asia over the next five years should still be Vietnam, given that the country’s car ownership rate is among the lowest in the region.
In Vietnam, there are at least 12,000 VinFast EVs on the roads today. However, this number is small compared to the estimated 60 million motorcycles and five million cars in a country with a population of 100 million.
“While waiting for the Vietnam market to mature (in terms of charging infrastructure and EV awareness), VinFast will need to explore other markets to achieve the desired sales quantity to be able to break even,” he said. “(Selling cars in the US) will also help increase the confidence of buyers in Asia.”
VinFast had filed for an IPO on Nasdaq in December 2022, but in May this year it announced plans to list through a merger with Black Spade. Upon completion of the merger, Black Spade became a wholly owned subsidiary of VinFast and is expected to be delisted from the New York Stock Exchange (NYSE).
It was founded by Black Spade Capital, the private investment arm of Lawrence Ho, and listed on the NYSE in July 2021. Ho is the chief executive of Melco Resorts & Entertainment, which operates casinos in Macau and the Philippines.
Some of VinFast‘s rivals such as Lucid and Nikola have seen their valuations fall after their respective Spac listings. Nikola has a current market value of US$1.4 billion, down sharply from US$13.9 billion before its listing. Lucid, meanwhile, has a market value of US$15.5 billlion today, compared to US$24 billion during its Spac deal in 2021.
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