VinFast IPO: Everything you need to know about VinFast
Rebecca Cattlin April 19, 2022 9:00 AM
Another electric vehicle company is about to enter the fray - Vietnamese company VinFast is going public to take advantage of the fast-growing EV market in North America. Find out everything you need to know ahead of the VinFast IPO.
What do we know about the VinFast IPO?
VinFast registered for its IPO in early April 2022. Although it hasn’t yet decided on the number of shares it will offer or its price range, its parent company – VinGroup – is aiming to raise $2 billion according to Bloomberg reports from last year.
This valuation would make it the largest IPO on US markets by a Vietnamese company.
When is the VinFast IPO?
The timing of the VinFast IPO is very much open, although CEO Le Thi Thu Thuy told reporters that it was planned for the second half of the year.
The open-ended nature of the listing window isn’t uncommon at the moment. The IPO market has been extremely quiet so far this year, with rising inflation and market volatility caused by the ongoing Ukraine crisis. Most companies who have decided to list have done so with the caveat that they’ll delay offerings if conditions don’t improve.
Explore other upcoming IPOs to watch in 2022.
How much is VinFast worth?
VinFast could be worth as much as $60 billion following its IPO, according to reports from last year. However, given the current state of equity markets that could now be a rather aspirational market capitalisation.
How to trade VinFast stock
Once VinFast has been listed, you’ll be able to trade its shares in the same way as any other stock on the market.
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What does VinFast do?
VinFast is an electric vehicle manufacturer based in Vietnam. It became the first-fully fledged domestic car maker in 2019, based on second-hand BMW platforms, and has since started to transition to all-electric vehicle production, which it aims to complete this year.
The company already receives export orders from Canada, France, Germany and the Netherlands, and now has plans to expand its US market. It’s expected to start building a vehicle assembly plant in North Carolina at some point in 2022. Completion of the plant isn’t scheduled until mid-2024, so in the meantime, VinFast intends to import cars from Vietnam to start selling to US consumers in 2022.
How does VinFast make money?
VinFast makes money through the sales of its SUV models VF 8 and VF 9. VinFast the models start from $41,000 and $59,000 respectively, but neither price includes the cost of the battery – consumers will have to lease these separately from VinFast. The batteries are offered on a flexible plan with monthly subscriptions of $35 for the VF 8 and $44 for the VF 9.
We can compare this to Tesla’s SUV, which costs upward of $63,000.
VinFast aims to target global electric vehicle sales of 42,000 units for 2022, while Tesla is aiming for 1.4 million units delivered this year.
Is VinFast profitable?
VinFast is not yet profitable and doesn’t expect to be anytime soon. Pham Nhat Vuong – founder and chairman of VinGroup – told local media that further losses should be anticipated in the company’s automotive business in the near term.
VinFast has no independent financials yet, so we’ll have to wait to see any further filings with the SEC. VinGroup as a whole posted saw revenues of $5,597 million for 2021 but had a net loss of -$109.60 million.
What is VinFast's business model?
VinFast’s business model is based on becoming a global brand and disrupting the existing EV market. These goals have been reflected in its production capacity growth so far.
In its first year, VinFast created an assembly plant in the northern port city of Haiphong with an initial annual production capacity of 250,000 vehicles, which expanded to 500,000 units/year later due to the rising domestic and international demand. In fact, VinFast accounted for 13% of domestic passenger vehicle sales in its first full year. The company also began producing a range of electric scooters at the plant in 2019.
VinFast is now investing heavily into succeeding overseas with a preliminary deal to invest $2 billion into its North Carolina factory to make electric buses, sport utility vehicles and batteries for other electric vehicles. Overseas sales are expected to start in 2022.
VinFast also recently announced plans to integrate the Amazon Alex voice experience into vehicles, in another bid to appeal to US consumers.
While it currently only has prototypes for its VF8 and VF9 SUVs, the automaker has also shown three more EVs – the VF 5, VF 6 and VF 7 – at the 2022 Consumer Electronics shows.
Who are VinFast’s competitors?
VinFast’s largest competitors in the EV space are the likes of Tesla, Rivian and Lucid. VinFast is relatively unknown in Western markets when compared to its rivals, so it remains to be seen how fast the company can establish itself. As the traditional automakers also switch their focus to the EV market, we could see market share get stripped from smaller firms.
Who owns VinFast?
VinFast is owned by VinGroup, Vietnam’s largest privately-run, publicly-traded company. The group’s primary operations are in real estate but has invested in businesses across industries such as healthcare, private education and artificial intelligence. The company was founded in 1993 by Vuong Nhat Pham.
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