[News in Business] Vietnam's 'VinFast' Surpasses BMW and GM on Nasdaq Debut Day

Stock Price Soars 68% on First Day of Listing on the 15th
Aggressive Investment Targeting the US... Local Factory Groundbreaking Also
Parent Company Vingroup Chairman's Assets Increase by 52 Trillion Won in One Day

Vinfast Auto, Vietnam's leading electric vehicle manufacturer and a global production hub in Southeast Asia, made a sensational debut on the Nasdaq stock exchange in New York on the 15th (local time). Immediately after listing on the New York Stock Exchange, its market capitalization surpassed those of major global automakers such as BMW, General Motors (GM), and Ford, drawing significant attention.

On the 15th (local time), Vietnamese electric vehicle company VinFast was listed on the Nasdaq stock exchange in New York, USA. (Photo by VinFast website)

According to Bloomberg and other sources, Vinfast went public through a reverse merger with a Special Purpose Acquisition Company (SPAC) on Nasdaq that day. The listing was achieved by merging with the SPAC company Black Spade Acquisition. On its first day of trading, Vinfast's stock opened at $22 (approximately 29,500 KRW) and surged 68% in one day, closing at $37.06. The stock experienced high volatility, leading to a temporary trading halt.

Black Spade Acquisition, the SPAC used for the reverse merger, initially valued the company at $23 billion (about 31 trillion KRW, $10 per share). Vinfast was thus recognized at more than twice that valuation from the opening price.

Vinfast's market capitalization soared to $85 billion, surpassing BMW ($68.4 billion), Ford ($48 billion), GM ($45.8 billion), and Rivian ($19.7 billion). Bloomberg reported that Vinfast's market cap is even higher than the combined market caps of Ford and Rivian. Vinfast's valuation also approached that of BYD ($93.9 billion), China's leading electric vehicle manufacturer.

[Image source=Reuters Yonhap News]

Vinfast, the first Vietnamese automaker to enter the global market, is a subsidiary of Vingroup, Vietnam's largest conglomerate. Founded in 2017 by Pham Nhat Vuong, chairman of Vingroup, with the automotive industry’s importance in mind, the company initially produced motorcycles, sedans, and sport utility vehicles (SUVs) before moving into electric vehicle manufacturing and export.

Vinfast's listing on Nasdaq is interpreted as a move to attract investor interest and secure capital for local investment in the U.S., its core target market.

From the early stages of its business, Vinfast set the U.S. as a key market. Le Thi Thu Thuy, Vice Chairwoman of Vingroup and CEO of Vinfast, said in a 2021 Bloomberg interview, "The U.S. is one of the first global markets we are focusing on," adding, "We will develop high-end models for the U.S." CNBC reported that Vinfast has exported 2,100 vehicles to the U.S. and 800 to Canada so far.

Since last month, Vinfast has been constructing a car manufacturing plant in North Carolina, USA. The company aims to start mass production of electric vehicles at this plant in 2025, targeting an annual output of 150,000 electric vehicles. Bloomberg reported that the Vuong family has invested at least $300 million in this project alone. Given the U.S. government's implementation of the Inflation Reduction Act (IRA) and other policies, producing locally is expected to provide competitive advantages in pricing, prompting active investment.

At the groundbreaking ceremony for the VinFast factory held last month in North Carolina, USA, Le Thi Thu Thuy, Vice Chairman of Vingroup and CEO of VinFast (left), and Roy Cooper, Governor of North Carolina, are posing for a commemorative photo holding shovels.
[Image source=AP Yonhap News]

CEO Thuy told foreign media, "Listing in the U.S. is a major milestone for us." She explained, "Our strategy is to supply high-quality products at reasonable prices along with excellent after-sales service." She added, "We have always offered products at competitive prices compared to similar products, but if you look closely, our products have better features and technology," expressing confidence that consumers will recognize this value.

However, despite Vinfast's spectacular start on Nasdaq, immediate success in the electric vehicle market does not seem easy. With global companies rushing into the electric vehicle market and intense competition already underway, it remains to be seen whether Vinfast, which still lacks extensive global market experience, can break through. CNBC evaluated, "Vinfast delivered its first vehicles to the U.S. in March, but it still has a long way to go to compete with Tesla and other Detroit automakers." Vinfast's first-quarter revenue this year fell 49% year-on-year, with an operating loss of $598 million. Last year's annual loss reached $2.1 billion.

Moreover, although Vinfast's listing caused a stir by surpassing global companies in market capitalization, the number of tradable shares in the market is relatively small, leading foreign media to expect high volatility in stock price and market cap liquidity. Bloomberg reported that Chairman Vuong effectively owns 99% of Vinfast's shares. Vinfast also indicated the possibility of additional fundraising if necessary, stating that strategic and institutional investors are lined up.

Pham Nhat Vuong Vingroup Chairman

Meanwhile, with Vinfast's listing, the net worth of Vuong, Vietnam's richest person, surged by more than 52 trillion KRW in a single day. Bloomberg reported that Vuong's net worth increased by $39 billion due to Vinfast's listing, reaching a total of $44.3 billion.

Born in 1968, Vuong graduated from university in Moscow, Russia, and then founded a dried food production company in Ukraine. He returned to Vietnam in 2001, established the real estate company Vincom, expanded his business, and founded Vingroup in 2011. Today, Vingroup has grown into Vietnam's representative conglomerate, managing not only real estate but also retail, automobile manufacturing, and smartphone production, earning the nickname "Vietnam's Samsung."