Vietnam’s first tech unicorn VNG seeks US listing
Announcement comes a week after EV maker VinFast made its Nasdaq debut
Jamille Tran
[HO CHI MINH CITY] VNG Corp – the first tech unicorn in Vietnam – has filed for an initial public offering (IPO) in the United States via its Cayman Islands-based shareholder VNG Ltd, with its trading debut expected to be towards the end of September or in October.
The Internet company’s announcement on Wednesday (Aug 23) comes hot on the heels of Vietnamese electric automaker VinFast’s debut on the Nasdaq stock exchange in New York last week.
VNG will own 49 per cent of VNG Corp, and the plan is to offer nearly 22 million shares in the listing under the symbol VNG. The offering is being led by Citigroup, Morgan Stanley, UBS and Bank of America.
A proposed price range will be set in a subsequent filing with the US Securities and Exchange Commission. Two sources with knowledge of the matter were quoted as telling Reuters that VNG is looking to raise US$150 million from the IPO.
Headquartered in Vietnam’s business capital Ho Chi Minh City, VNG operates a wide range of services, including music streaming, mobile payment, online games and messaging.
VNG owns the popular messaging app Zalo, which is used by around 75 million people in Vietnam, overtaking Meta Platform’s Facebook Message to be the most-used chat platform in Vietnam since 2020.
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According to the filing, VNG founders Le Hong Minh and Vuong Quang Khai will still helm the listing company by collectively holding 51 per cent of the total voting power. The 45-year-old Minh is VNG’s chairman and chief executive officer, while the 44-year-old Khai is the director of the Zalo business.
They were part of the group of founders who created the company in 2004 as a game publisher called Vinagame. Today, VNG has around 4,000 employees in 10 cities around the world.
In the second quarter of this year, VNG snapped a long series of losses dating back to 2021 to record an after-tax profit of 50 billion Vietnamese dong (S$2.82 million), versus a loss of nearly 380 billion dong over the April-June period in 2022.
VNG has spoken publicly about its intention to launch an IPO since as early as 2017. Vietnam’s other tech giants like e-commerce platform TiKi, mobile wallet Momo and logistics startup Loship have all announced their intentions to go public for years, but these have not been realised as yet.
In a letter to investors that came with the prospectus, VNG’s founders wrote: “We were born after the war, in a nation that had found peace and unity, but was still struggling with underdevelopment and isolation. Little did we know how lucky we were when the Internet arrived in Vietnam in the middle of the 1990s. The world magically and suddenly opened the door for us.”
VNG’s IPO would be the second major US listing recently, after VinFast’s successful IPO last week after its merger with Hong Kong-based blank-cheque company Black Spade Acquisition in a deal valuing it at US$23 billion.
VinFast’s stock opened at US$22 and is currently trading at US$37, roughly the same price at the close of its first trading day on Aug 15. VinFast has a stock market value of around US$85 billion — higher than that of automakers such as Ford Motor, GM, BMW, and Volkswagen.
In January this year, VNG started selling 35.8 million shares to the local public market in Vietnam and recently reduced its float to around 28.7 million.
The stock closed at 1.24 million dong per share on Thursday, giving it a market capitalisation of around 35.6 billion Vietnamese dong (or US$1.48 billion). This is over half of the US$2.2 billion valuation recorded in the 2019 financing round led by Singapore investment company Temasek Holdings.
This local listing was not on Vietnam’s main bourse, but on UPCoM, a local market for public companies that have yet to be listed on the Ho Chi Minh City Stock Exchange.
While the requirements and criteria for trading on UPCoM are simpler for companies, the total market capitalisation of stocks listed there is about a quarter of the bourse’s as of end-2021.
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