After more than 3 years of establishment, VinFast has risen to become the fourth best-selling car company in Vietnam, setting its ambition to IPO in the US with a valuation of at least $ 50 billion.
The idea of a “Made in Vietnam” car came from a car billboard that ran through the eyes of billionaire Pham Nhat Vuong as he was sitting in a car from the airport to the inner city after a business trip. That is what people tell about the origin of VinFast – the first domestic car brand in Vietnam.
The Vietnamese car company was born before the unfinished Vinaxuki, one Thaco, TC Motor stopped at the joint venture and the tax rate for imported cars from Southeast Asian markets is gradually approaching zero. The most fluttering heads at that time also wondered, is the concept of a “Made in Vietnam” car a dream too fanciful?
However, only 13 months, the shape of the cars “in the flesh” with the stylized V logo in the word VinFast – Vietnam was officially released. And it only takes another 12 months for VinFast to become the fourth largest car company in Vietnam, with the same products as Toyota, Hyundai or Honda.
Most recently, information from Bloomberg said that Vingroup is considering an IPO for VinFast in the US market. The IPO is expected to raise about $ 2 billion.
If successful, the VinFast IPO will mark the biggest ever, and at the same time make VinFast the first Vietnamese company to be listed in the US market.
Valuation of USD 50 billion of VinFast
Accordingly, after the IPO, VinFast’s valuation is likely to be at least $ 50 billion. With this valuation, the Vietnamese car maker will be in the top of the big capitalized car manufacturers doing business in the US such as Ferrari, Hyundai, Honda, Ford.
At the end of 2019, also in an interview with Bloomberg, Pham Nhat Vuong shared that he would spend about $ 2 billion from his personal assets to support VinFast in his goal of conquering the US market. In fact, since then, Vingroup – VinFast’s parent company has not stopped pouring money into this car company.
According to Vingroup’s 2021 prospectus, as of June 30, 2020, VinFast’s charter capital has increased by more than 55 times compared to the time of its establishment in 2017, from VND 500 billion to VND 28,116 billion. In which, Vingroup holds 51.15% of VinFast shares.
Meanwhile, according to our data, more than 49% of the remaining shares of VinFast are in the hands of individual domestic shareholders. Capital contribution from foreign organizations and individuals is not recognized.
In addition, as of April 6, 2021, Vingroup Chairman has about $ 9 billion of total assets, ranked 262nd on the list of billionaires in 2021, according to Forbes. Therefore, the listing of VinFast in the US, if successful, is also expected to bring Mr. Pham Nhat Vuong to the top 50 richest people in the world due to his large shareholding rate here.
As for total assets, as of December 31, 2019, VinFast has more than 90,473 billion dong of total assets, an increase of 15.6 times compared to the time of its establishment. The company currently owns a $ 3.5 billion VinFast car production complex in Dinh Vu economic zone (Hai Phong). In September 2020, VinFast completed the acquisition of an 872-hectare test car with an estimated value of 15 to 20 million USD in Australia after opening a representative office in this country.
For the U.S. market, VinFast has also set up a research room with 50 employees in San Francisco, and plans to open 35 showrooms and service centers in California this year, while also planning to build a plant in the U.S. over the next few years, according to Bloomberg.
Regarding the situation of production and business activities, although only the first three models were launched, including VinFast Fadil, Lux A2.0 and Lux SA2.0, VinFast’s models quickly rose to the top of the segment.
In particular, the Lux A2.0 and Lux SA2.0 models are always in the top of the most purchased luxury sedans and SUVs, while the Fadil is the best-selling model in segment A in Vietnam. By the end of 2020, the total number of VinFast cars sold is nearly 30,000, ranking 4th in the list of best-selling car brands in Vietnam.
Despite the large number of car sales, the last year revenue we had was 6,127 billion VND (2019), but VinFast is still in a loss period. According to Pham Nhat Vuong, each year Vingroup will spend about 18,000 billion VND to compensate for the loss in the car business. These losses include financial expenses, amortization and sales of the vehicle below the cost of production.
However, it can be expected that this period will soon end when earlier this year, talking with an analyst from KB Securities Vietnam, VinFast’s leaders said that the company plans to part with EBITDA in the next 5 years thanks to increasing output to increase market share as well as reduce production costs.
On the other hand, in the meeting of typical businessmen and intellectuals with the Prime Minister on the afternoon of March 6, Mr. Vo Quang Hue, Deputy General Director of Vingroup, said that VinFast has finished the startup stage and is entering a new development stage, making efforts many times before to achieve the goals, reap the results.
Target 30% market share in Vietnam, sell electric cars in the US
Up to now, after more than 3 years of establishment, VinFast has owned a relatively universal product range. Including 5 gasoline car models, an electric car and 7 electric motorcycle models, covering from affordable to high-end segments.
Talking to KB Securities, a representative of VinFast said that it would continue to expand its products in the coming years and aim to reach 30% of the car market share in Vietnam.
For foreign markets, in an interview with Bloomberg, Ms. Thai Thanh Hai, CEO of VinFast said: “VinFast’s vision is to become a global smart electric car manufacturer and the US will is one of the first markets that we focus on. In the first phase, VinFast will develop high-end models for the US market. ”
The head of the Vietnamese car company confidently can sell Vietnamese cars to Americans or to customers in other markets by providing top quality car models, high safety standards and advanced technology.
VinFast spent huge amounts of money to appear heavily on the US TV channel CNN, paving the way for entering the most difficult market in the world. (Video: CNN).
Implementing this goal, since the beginning of 2021, VinFast has made many positive moves to turn to the electric car industry, which started the announcement of its first three electric SUVs, including: VF31, VF32, VF33.
Recently, VinFast has started the process of ordering the first electric car model VinFast e34 (VF31) in the Vietnamese market and is expected to deliver goods by the end of this year. While in the US, Canada and Europe markets, receiving orders from 11/2021, handing over cars from June 2022.
On March 3, VinFast also signed a memorandum of understanding on strategic cooperation with ProLogium Technology Company (Taiwan) to get the right to use ProLogium patents to produce Solid-state batteries in Vietnam. The move is considered as a strategic step in the autonomy of battery technology for electric vehicles of VinFast, which is the prerequisite for the research and development of smart and advanced electric vehicles in the future.
In Vietnam, paving the way for the delivery of the first electric cars to customers, VinFast is rushing to install a charging station system across the country, with the goal of having more than 40,000 charging ports for electric motorcycles and electric cars later this year.
It can be said that producing high-tech cars and selling them in the most demanding market is a dream that even big names like Toyota or Hyundai in the early days of their startup do not dare to think about.
However, VinFast – the 3-year-old domestic car company in Vietnam, has seen the future and is dreaming of that dream. Dream of Vietnamese brand cars rolling on the streets of lavish Manhattan of New York, or on San Francisco’s famous Golden Gate Bridge.
The road is long. “The American dream” of the Vietnamese billionaire may still be difficult, but like the famous slogan of this enterprise – “Intense spirit of Vietnam”, believes that dream is not too far-fetched.