Tesla Vietnam, market value 700 billion

Fengse Cresi comes from Aofei Temple
Qubits | Public account QbitAI

This year’s “most amazing” IPO appeared in the U.S. stock market——

It’s the “Vietnamese Tesla” VinFast .

This electric car company just listed on Nasdaq two weeks ago, and its stock price has skyrocketed, becoming the largest IPO in the U.S. market this year.

In the market value list of global automakers, it jumped to third place , behind Tesla and Toyota .

This also made founder Pan Riwang become the 16th richest person in the world and the 5th richest person in Asia.

However, on Tuesday this week, the attention-grabbing VinFast began to plummet. The stock price fell directly by 44% that day, losing 83 billion US dollars in one fell swoop.

This is jaw-dropping.

It is worth mentioning that after carefully reviewing the data, everyone discovered that there is indeed a clue behind this gap:

Looking at sales alone, VinFast only sold 11,300 cars in the first half of this year, compared with 1.25 million BYD in the same period .

But BYD’s market value still ranks behind VinFast (fifth) …

It really makes people feel very "demon".

How did VinFast make its fortune?

VinFast was founded in 2017. Its founder Pan Riwang is 55 years old this year.

He was born in an ordinary family in Ha Tinh Province, Vietnam. He is the eldest of three children; his father serves in the air defense department, and his mother runs a tea stall to make ends meet.

Due to his good academic performance, Phan Ri Vang was admitted to the Hanoi University of Mining and Geology. During this period, he went to Moscow to study abroad on a government scholarship and completed his university studies (majoring in geology) .

Then he stayed in Ukraine, next to Russia, where he started by raising money to open a Vietnamese restaurant. Later, he smelled a business opportunity and took out a loan to start a fast food processing factory. He eventually made a lot of money (the factory was later sold to Nestlé). ) .

With this money, he returned to Vietnam and began to join the real estate industry. In about ten years, he established his own brand Vingroup, which has four major brands, including commercial real estate, tourism real estate, beauty and fitness, and high-end medical care.

He also became the richest man in Vietnam .

Similar to the once richest man in China , Xu Jiayin, Pan Riwang later entered the car manufacturing industry.

In September 2017, VinFast, the company he founded, began building a factory in the remote Ge Hai County of Haiphong, Vietnam, covering an area of ​​335 hectares. In the same year, it bought General Motors' business in Hanoi.

At the beginning, VinFast only produced fuel vehicles, electric buses, electric motorcycles, etc.:

In October 2018, two products were officially released and exhibited for the first time at the Paris Auto Show. They were delivered to Vietnamese consumers in June of the following year, ranking fifth in the country in sales.

The official delivery of the first 100 electric models (VF e34) will be three years later (in 2021) , and will become the first electric car ever produced and sold in Vietnam.

At the end of last year, VinFast officially announced that it would completely stop producing fuel vehicles and transform into a true pure electric vehicle company.

It is worth mentioning that compared to the later "pure electric road", VinFast has laid out the international market very early .

In March of the following year after the release of the first two models in 2018, VinFast sent 155 cars (113 finished cars and 42 semi-finished cars) to Europe, Asia, Australia and Africa for field testing to check the quality. Obtained ASEAN NCAP five-star rating.

Prior to this, VinFast had already opened an office in Frankfurt.

What followed was a global "blooming": the US headquarters was established in Los Angeles, a test site was purchased in Australia, and in March last year it was announced that it would set up its first North American factory in Chatham County, North Carolina, claiming to provide 7,500 jobs.

At the same time, VinFast is also planning to move its headquarters to Singapore.

But just like the Internet saying, "One operation is as fierce as a tiger's, and one glance is xxxxx", VinFast's data does not seem to be very good.

So far, VinFast has sold a total of 7 electric vehicles globally. As of June this year, VinFast has sold a total of 105,000 vehicles worldwide, of which only 18,700 are electric vehicles .

△ The latest tram VF 9

If you compare any member of the "Wei Xiaoli" in the country, they will be severely crushed.

However, on August 15 this year, under the leadership of CEO Le Thi Thu Thuy , this new Vietnamese car-making force that "no one looks down upon" was successfully listed on the Nasdaq, the world's largest capital market, and was valued 50 billion——

Although VinFast used a special SPAC method (which can be understood as a variant of "backdoor listing") , it was completed through cooperation with Spades Capital initiated by Stanley Ho, the son of gambling king Stanley Ho.

ps. Regarding Li Thi Qiu Shui, she can be said to have contributed a lot to what VinFast is today.

She was born in Vietnam in 1974 and received an MBA degree from Japan International University. She then worked at Lehman Brothers and joined Vingroup in 2008.

She helped the company raise more than $1 billion in funding, established a partnership with General Motors, and hired Toyota's top engineers and designers.

Cut in half overnight after peaking

Like life with its ups and downs, VinFast's stock price has also experienced ups and downs.

In the two weeks since its listing, VinFast's stock price has been soaring, reaching $82.35 at the close of trading on the 28th, with the highest price that day being $93.

Compared with the closing price of $10.45 on the 14th, it increased by 688%.

△ Source: Nasdaq Exchange official website

The market value of over US$210 billion is more than double BYD's closing price on the same day (HK$675.13 billion, approximately US$86 billion) , and has become one of the most popular stocks on Stocktwits.

However, after VinFast's stock price reached its peak, it began to plummet continuously, and the closing price on the 29th was almost halved.

The stock price on the 30th continued to show a downward trend, with a single-day decline of 10.77% even ranking among the top five in the decline list.

△ Source: Google Finance

As of the close of trading on the 30th, VinFast's latest market value was US$95.22 billion (approximately RMB 700 billion) , which was less than 100 billion, and more than half of it had evaporated in two days.

However, be careful!

The publicly issued shares of VinFast account for less than 1% , with a total number of less than 25 million shares, and the remaining 99% are indirectly controlled by Pan Riwang.

In comparison, Tesla has publicly issued 2.76 billion shares, accounting for about 86%; Ford and General Motors each have about 98% of outstanding shares publicly issued.

Some professionals said that when the public issuance rate is less than 1%, the stock price has little reference value for investors.

Not only is the proportion of public transactions low, VinFast’s listing process is also questionable.

According to Forbes, VinFast has been seeking to be listed in the United States since March last year.

But later, VinFast gave up its IPO and instead merged with Lawrence Ho's Spades Capital.

This transaction valued VinFast at approximately US$23 billion, but as of July this year, Spade Capital had redeemed 80% of its shares, and by August, 92% of its shares had been fully cashed out .

It is reported that the merger process allowed VinFast to raise a total of US$169 million, but it spent US$2 billion (Forbes data, Reuters news: 4 billion) US dollars in the new factory in North Carolina alone.

In addition to the strange financial situation, VinFast's product itself has not passed the mass production level.

As of June, there were only 137 Vinfast electric vehicles registered in the United States, according to S&P Global Mobility.

Pan Riwang said that the sales volume of VinFast electric vehicles this year will be around 50,000 units, "an increase of only 7 times last year." (This puts the number of electric cars sold last year at just four digits)

Whether it can really sell so many cars remains to be seen. Even if it is true, it will still be less than a fraction of Tesla (1.8 million units) .

If production capacity cannot keep up, no matter how high the stock price soars, it will still be a bubble; orders cannot be delivered, and turnover cannot increase at all.

According to the prospectus, VinFast will be at a loss in both 2021 and 2022, with a net loss of more than US$2 billion in 2022.

△ VinFast prospectus

This year's situation is also not optimistic: in the first quarter alone, Vinfast's net loss reached US$600 million .

However, despite the company's losses, the attitude of the senior management is quite optimistic.

Chief Financial Officer David Mansfield said the company aims to be profitable within the next three years and hopes to exceed annual sales of 75,000 vehicles in 2026.

Pan Riwang himself also said that the balance of payments would be achieved by the end of 2024 at the earliest .

Whether the vision of VinFast executives can be realized is unknown, but there are indeed failure cases with very similar scripts right in front of us.

Rivian , a car manufacturing company , once became the third largest company in the automotive field with a market value of US$160 billion.

But the good times did not last long. By 2022, Rivian had evaporated by more than 90%, leaving only a pitiful more than 20 billion.

△ Source: Google Finance

In terms of revenue, the net loss in the second quarter of 2023 was as high as US$1.195 billion. The reason behind this is also the repeated delays in delivery.

I wonder if VinFast can learn from Rivian’s mistakes.

A company that also has a low turnover rate is AMTD Digital , the “most popular Chinese concept stock” a year ago .

Its stock price soared at an even more outrageous speed - it rose more than 32,000% in a few weeks, and its market value once exceeded US$400 billion, surpassing JPMorgan Chase.

But since then, AMTD Digital's stock price has plummeted, plummeting more than 99%, and its current market value is only US$1.1 billion.

△ Source: Google Finance

Regarding this magical IPO, Morningstar analyst David Whiston believes:

The stakes in how VinFast scales in an extremely crowded electric vehicle market cannot be ignored.

Traditional automakers have the ability to build multiple factories faster than startups, and they cannot afford to ignore this risk.

Another Wall Street analyst also said that VinFast's current market value does not justify the company's growth prospects in the next few years.

Still, we might as well let the bullets fly a little longer...

参考链接：
[1]https://www.reuters.com/business/autos-transportation/vinfast-rallies-after-becoming-worlds-third-most-valuable-automaker-2023-08-28/
[2]https://www.forbeschina.com/business/65386
[3]https://en.wikipedia.org/wiki/VinFast

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