AutoBeta(AutoBeta.net)10/06 Report--

VinFast Auto, a Vietnamese electric car maker, reported third-quarter results on a net loss of $623 million on operating income of $343 million and delivered a total of 10027 new cars. VinFast said it planned to build local facilities in India and Indonesia and to assemble up to 50000 cars a year at local CKD plants, with total capital expenditure of $150 million-$200m for the first phase.

Founded in 2017, VinFast is the first major automaker in Vietnam and the first Vietnamese car brand to enter the global market. As Vietnam's first car brand, Vinfast shoulders the hope of Vietnam's auto renaissance, but also directly regards Tesla as the target company. However, unlike Tesla, VinFast lacks independent research and development capabilities, its car-building technology is mostly realized through acquisitions or other partner companies, and the lack of core competitive advantage further obscures market capitalization.

After completing the business merger with special purpose acquisition company (SPAC) Black Spade Acquisition (spades), VinFast officially listed on Nasdaq in the United States, and its share price rose 254.64% on its first day of trading. Since then, the share price has soared, reaching as high as $93.00. its market capitalization is second only to Tesla and Toyota, making it the third largest car company in the world.

Compared with Wei Xiaoli, VinFast's market is far smaller than its Chinese rivals, but its planned plant in the US and its global layout provide more room for imagination for its company's value, which may be the main reason for the soaring share price of its listing. In addition, VinFast has set its sights on the global market since its inception, from research and development, production to sales and marketing, which also provides a certain prospect for the future performance of VinFast.

A deeper reason is that VinFast has only a small number of shares available for trading and the vast majority of them are locked in. Data show that Pham Nhat Vuong, chairman of the VinFast Group and the richest man in Vietnam, actually controls about 99 per cent of the company, which means that the trend and market capitalization of VinFast's share price are unstable and vulnerable to market speculation. VinFast's shares have fallen since September, falling 87.64 per cent in nearly 28 trading days.

Like most new power car companies, VinFast is also in a state of loss, and the quota is expanding year by year. According to the financial report, VinFast lost $1.3 billion in 2021, $2.1 billion in 2022, $1.748 billion in the first three quarters of 2023 and nearly $7 billion since its inception. Of course, compared with the new domestic forces, the loss of 7 billion US dollars in three years is not much, the main thing is that under such a large loss, VinFast lacks the support of self-research technology, and it is always difficult for the market to give an ideal valuation.

At present, China is the world's largest market for new energy vehicles, and while the pressure of competition is huge, it also contains more development opportunities. Although the cake has been almost divided by BYD, Tesla, Ian, Wei Xiaoli and other enterprises, but there are still many foreign companies desperately squeezing inside, like a picture of heroes competing. Perhaps, no one is willing to lag behind.

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