“Competing with a giant like Tesla would require a huge investment, and as such, U.S. IPO could be not only an aspiration, but a necessary thing to thrive” – Business Times commented.
VINFAST Trading & Investment – a subsidiary of VinFast in Singapore has recently submitted a draft of the preliminary listing application form F-1 to the US Securities Commission (SEC) regarding the proposed public offering of common shares.
The company has been eyeing the US electric car market share since its founding in 2017, and this is a stepping stone to realizing that dream. Recently, they announced that they will establish a $ 2 billion VinFast factory in North Carolina, creating about 7,000 jobs. Last year, VinFast invested $200 million in its headquarters in California.
“VinFast has come a long way in a relatively short period of time, having only been established in 2017, by parent company Vingroup, with no previous experience or expertise in the automotive sector.” – Business Times commented.
But in return, VinFast has used resources from abroad, including hiring designs from Italian firm Pininfarina and using BMW engines in its vehicles. VinFast also recruits international staff, including Shaun Calvert, an executive with 20 years of experience at General Motors, who used to hold the role of Vice President of Manufacturing Operations.
VinFast also recruited Kevin Fisher, who has only 6 years of experience as an automotive consultant in Detroit and is currently Vice President in charge of product engineering. On the board of directors is also John Harris, who has worked for Ford Motorcompany in various roles for more than 30 years and is now a general advisor of VinFast.
Michael Lohscheller, former CEO of Volkswagen and Opel, is also on the team in 2021 as CEO of global VinFast. However, less than a year later, he resigned due to personal reasons. He is succeeded by Mrs. Le Thi Thu Thuy, who is also the Vice President of Vingroup – who will lead the company to enter the US market.
“In the future, VinFast will definitely have to do its best. The US car market is already very saturated, being dominated by Tesla, which accounts for nearly 80% of electric vehicles registered in the US by 2020. ” – Business Times assessed and added, “competing with a giant like Tesla would require a huge investment, and as such, U.S. IPO could be not only an aspiration but a necessary thing to thrive.”
Earlier, Ken Foong, an analyst with Bloomberg Intelligence in Singapore, said in a February 11 study that VinFast’s global sales of electric vehicles could drive long-term growth for Vingroup.
Ms. Thuy said the company aims to sell a total of about 700,000 to 1 million electric vehicles within five to six years. She revealed that VinFast has received 50,000 orders globally for the VF8 and VF9 models.
VinFast’s goal can be said to be ambitious compared to other car manufacturers. Electric car startup Nio (China) just reached the milestone of the 100,000th car in April 2021, after nearly 3 years. Many other businesses have even failed to try to implement similar plans.
VinFast started selling petrol cars in Vietnam in 2019. The company once announced it would stop producing petrol cars. VinFast sold 35,723 petrol cars in Vietnam last year and sold about 30,000 units in 2020.
Also in a recent article, Bloomberg wrote: “Vingroup is considering raising $2 billion through this IPO. With that scale, VinFast’s IPO event will end the absence of large IPOs of Asian companies in the US market. Although investors will also be more cautious with a company that is still relatively unknown in the international market”.
Fund manager at Asia Frontier Capital Ltd. Hong Kong-based Ruchir Desai assessed: “The concern here is not whether VinFast can raise capital, but whether VinFast’s valuation meets market expectations, in the context of rising interest rates could have a strong impact on companies preparing to list in the US.”
According to analysts Ken Foong and Fairuz Khalil (Bloomberg Intelligence), the IPO could raise the value of the parent company, raising Vingroup’s market capitalization to $26 billion. “This number is calculated based on the assumption that VinFast will achieve the most optimistic scenario, with EV/Sales (enterprise value-to-sales) of 12x, similar to Tesla.”