AutoBeta(AutoBeta.net)08/27 Report--

Shares of VinFast, a Vietnamese electric car maker, once again set off a whirlwind in the global car market. By the close of trading on Aug. 25, the company's shares continued to soar to $68.77, with a market capitalization of $159.7 billion. If the RMB is synthesized, the market value of VinFast has exceeded one trillion yuan, even more than China's listed car companies such as BYD and Wei Xiaoli. Although VinFast was not well known in the car market before it went public, it is now the third largest automaker in the world after Tesla and Toyota.

In fact, since listing, VinFast has attracted the attention of the market because of its frequently fluctuating stock price. On August 15, after completing the business merger with the special purpose acquisition company (SPAC) Black Spade Acquisition (spades), VinFast was officially listed on the Nasdaq in the United States. it became popular on the first day of listing due to a sharp rise of 254.64% in its share price, with a total market capitalization of US $86.02 billion (over RMB 626.3 billion) at the close, surpassing General Motors and Mercedes-Benz Group. Become the world's fifth largest car company by market capitalization (Tesla, Toyota, Porsche, BYD).

Because of this, VinFast is not only the largest US listed company in Vietnam, but also the largest listing in the US market so far in 2023. As for the reasons for the sharp rise in stock prices, industry insiders said that the new forces of car building will usher in a capital boom at the beginning of the listing of US stocks, but eventually the market capitalization may return to rationality. In addition, some analysts warned of its valuation bubble, and the big short seller Jim Chanos called the VinFast valuation "crazy". One analyst pointed out that the rise in VinFast's share price is due to its relatively small number of liquid stocks in the market, so the price is prone to large fluctuations. In short, the number of shares available for trading in VinFast is very small, and the vast majority of stocks are locked, which also means that the trend and market capitalization of VinFast shares are unstable and vulnerable to market speculation.

According to data, Vinfast, founded in 2017, is the first major automaker in Vietnam and the first car brand in Vietnam to enter the global market. It is part of the Vingroup Group and its major shareholder is Pham Nhat Vuong, Vietnam's richest man. At that time, there were few local brands in the Vietnamese car market, but Pan Riwang put forward a high-profile goal of "building the first Vietnamese car within two years", a goal that once became the national pride of many Vietnamese.

Pan Riwang became the richest man in Vietnam in 2013 and has been the richest man ever since, even known as "Vietnam Li Ka Shing". As Vietnam's richest man, Pan Riwang keeps a low profile, but makes no secret of his ambitions in building a national brand. In 2017, Pan Riwang began to enter the auto industry and then built Vietnam's first independent car brand, VinFast.

Like Xu Jiayin's car-building concept, Pan Riwang also adopted "buy and buy" measures at the beginning of his business. Shortly after its establishment, VinFast spent $1.5 billion to build a factory and a research and development building, followed by the launch of two models, but the market was lacklustre because of a lack of power. VinFast bought GM's car production line in Vietnam in 2018, and Opel, GM's hatchback economy car, sold 18000 vehicles in 2020.

It should be noted that the original VinFast started with fuel vehicles, and it was not until Pan Riwang realized the hot situation in the new energy vehicle market that Pan Riwang decisively "changed fuel to electricity" and entered the field of new energy vehicles. The production of its last internal combustion vehicle ended in early November 2022. Since then, VinFast has completely bid farewell to fuel vehicles, transformed into a new power of local electric vehicles, and publicly declared "counterbid Tesla".

At the end of 2021, VinFast's first electric model, the VF E34, was launched. Different from Xu Jiayin's car-building concept, Pan Riwang's new energy is not only used to circle money. After the launch of the first electric model, VF e34, Pan Riwang quickly extended a series of models such as VF 5, VF 6, VF 7 and VF 8 and VF 9, covering a wide range of models from A to D. In early 2022, Le Thi Thu Thuy, global chief executive of VinFast, announced that VinFast would become a manufacturer of pure electric vehicles. In March of the same year, VinFast announced that it would invest $4 billion to build a new car plant in North Carolina, with the goal of starting production in 2024.

So far, VinFast has six electric cars, but the market sales performance is not good. Since its inception, VinFast has set its sights on the global market, from research and development, production to sales and marketing. According to the data, the cumulative global sales of VinFast in 2022 were 7400, compared with 11143 in the first half of this year. It is worth mentioning that since the end of last year, VinFast has exported 3000 vehicles in North America, but as of June, only 137new cars have been licensed and insured in the United States. in other words, VinFast's product strength has not been recognized by the local market.

Of course, like most of the new power car companies, VinFast is also in a state of loss, and the quota is expanding year by year. VinFast lost $1.3 billion in 2021 and $2.1 billion in 2022, according to the report. The situation has not improved since 2023, with revenue falling 49% year-on-year in the first quarter of this year and a net loss of $598 million. According to statistics, since its establishment, the total cumulative loss of VinFast has reached nearly 6 billion US dollars.

Listing after car building is the path for all new energy car companies, and VinFast is no exception. Judging from the stock price performance after the listing of VinFast, whether it can maintain a high market capitalization for a long time still needs more time to test. Usually, companies listed through SPAC mergers tend to see their share prices rise sharply at the initial stage. As a reference, the market capitalization of the new forces Lordstown and Nikola listed in the United States have fluctuated a lot since the merger and listing of the SPAC model. As performance fails to support the share price, its market capitalization may also quickly evaporate, such as Rivian, which exceeded $150 billion at the start of its IPO and now has a market capitalization of less than $20 billion. Therefore, although the current VinFast market capitalization is high, but the follow-up, I am afraid there are still a lot of variables.

Pan Riwang's fortune rose more than eightfold to $44.3 billion on its first day of trading, while by the close of trading on Aug. 25, his fortune had risen to $55.8 billion, US media Business Insider reported.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat