Two Vietnamese billionaires set to make a splash in US IPO markets

TWO self-made Vietnamese billionaires are taking their companies out West. They are off to the American stock markets where a record number of initial public offerings (IPOs) are generating much excitement, while their prospects of raising funds back home in Hanoi have turned bleak in the pandemic.

The richest man in Vietnam, Pham Nhat Vuong - whose Vingroup is planning an ambitious IPO for its VinFast unit, which is the biggest carmaker in the country - expects to raise US$2 billion in the resurgent US market. And the three-year-old Bamboo Airways, established by Trinh Van Quyet, who heads the property and leisure company Finance Land Corporation (FLC) Group, is hoping to drum up US$200 million.

One of these companies could become the first Vietnamese firm to list in the United States. However, the exact terms of the two proposed IPOs have not yet been made public. Their timing is right on the money, so to speak. The IPO market in the US crescendoed last year - during the pandemic - with a record of more than 400 IPOs that collectively raised US$195 billion, as the new listings more than doubled over the 195 IPOs staged in 2019.

To the delight of the Vietnamese billionaires, last year's boom has spilled over into 2021, as there were more than 100 IPOs in the US in the first quarter of this year, which raised a total of US$39 billion, said Renaissance Capital, signalling that the boom of IPOs is set to continue with several scheduled listings.

The US' IPO market is burgeoning because of the trend of the transformation in digital technology, which is pushing more companies into the markets as they adopt cloud computing, analytics and artificial intelligence, as well as the fact that the US venture capital markets have been cash-rich for several years.

Little wonder that Vingroup is planning the VinFast IPO which may take place in the current quarter and may even go beyond its own fund-raising expectations. The company is believed to be aiming for a market valuation of about US$50 billion after its listing.

But even if VinFast succeeds in raising the US$2 billion, it would mark the biggest ever IPO by a Vietnamese company. It is not surprising that Vingroup shares trading in Vietnam's domestic stock market have been rising this year, taking its market value to about US$20 billion.

The Vingroup was set up by Mr Vuong, who studied in Russia and launched an instant noodle business in Ukraine in the 1990s. The noodle company became a market leader in dehydrated culinary products in Ukraine, which he sold to Nestle for US$150 million in 2009. He returned home to Vietnam to set up the Vinpearl Resort Nha Trang in 2003, and Vincom City Towers in central Hanoi in 2004. After Vincom went public in 2007, it merged with Vinpearl to form VinGroup in the same year. The wealthiest man in the country, the 53-year-old Mr Vuong has a net worth of US$9.9 billion, said Forbes, which listed him on its billionaires roll.

TAKING FLIGHT

In a sign that other Vietnamese firms are gearing up for IPOs in the US, Vietnam's Bamboo Airways, which had its first flight in January 2019, has recently announced its plan to raise about US$200 million in its American IPO, demonstrating its intention to garner a market capitalisation of about US$4 billion, said its chairman Mr Quyet.

Bamboo Airways plans to offer a 5 to 7 per cent stake in the IPO, which it expects to hold in the third quarter of this year. Mr Quyet expects that the IPO on the New York Stock Exchange would help the airline grow its services globally. The company appears to have shelved a plan to list in the local Vietnamese bourse later this year because of weak market conditions and has turned its attention to the US.

Bamboo Airways aims to increase its fleet from 30 to 40 aircrafts by the end of this year, including two Boeing 787-9 Dreamliners as it prepares to launch new routes to the US, Australia, Germany, Japan and the United Kingdom this year, pending an improvement in the Covid-19 pandemic.

In an interview posted on the Bamboo Airways website, the 46-year-old Mr Quyet talks enthusiastically about how the idea of starting an airline occurred to him: "My childhood memories and business insights gave me the idea of opening an airline. I remember that in my early teens, children were so interested in airplanes. I was born in Vinh Phuc, which is near Noi Bai airport. My friends and I used to run out and look at the flying airplanes until they hid in the clouds. We all wished that we could fly someday."

Then, he adds: "At the age of 19, I had that dream come true when taking a one-way flight from Saigon to Hanoi. After saving enough money, I decided to take my first flight. I didn't remember much about that trip, but the feeling of satisfaction still remained. I even kept the ticket for a long time to show off to my friends."

Mr Quyet is confident he can compete with rivals such as the budget carrier VietJet and state-owned Vietnam Airlines by using Bamboo Airways to connect his golf resorts to cities in Vietnam and north-east Asia. "Even international airlines don't have an ecosystem like Bamboo's," he said about his company, FLC, which owns five golf resorts across the country.

"We have the rooms and combo packages for passengers. They can visit Vietnam, stay and play golf for free," Mr Quyet said in a recent press interview. The prospect of getting to play golf for free would be music to the ears of most golfers.

A lawyer-turned-entrepreneur, Mr Quyet built his empire investing in property through FLC. In 2016, he became Vietnam's second dollar billionaire, after Vingroup's Mr Vuong, with a net worth of US$1.2 billion, and then he grew interested in aviation.

The two billionaires are scripting inspirational stories. The chief of the young airline who reveals that he "couldn't even afford a bicycle" when he was a student, and the dynamic Mr Vuong who, instead of opening a bottle of champagne after the launch of one of his projects, said: "I prefer sipping happiness by myself."

• The writer is the editor-in-chief of Rising Asia Journal.