After the stratospheric flight of the first day, the descent is brutal for Vinfast. Introduced on the New York Stock Exchange last Tuesday, the title of the Vietnamese electric car manufacturer fell the next day before falling heavily on Thursday, during its third trading session on the Nasdaq. In just two days, it went below its launch value.
Vinfast shares fell 34% in this session, a cumulative drop of 46% over two days. At the close, it was worth less than 20 dollars against 22 dollars when it launched on Tuesday, and especially after having soared up to 37% on its first day of trading. In fact, Vinfast’s valuation has fallen back to around $46 billion, after rising to $85 billion. Volatility reinforced by the low number of shares put into circulation.
With Vinfast, Vietnam wants to become an automobile power at the speed of light
Facing the American Goliaths
The enthusiasm of the first day was therefore quickly deflated. But the figures are above all becoming more reasonable, and again. First, Vinfast remains above its original $23 billion valuation, set when it merged with SPAC (Special Purpose Acquisition Company) American Black Spade Acquisition – maneuver intended to facilitate its IPO.
And with this current level, Vinfast comes to be in the same order of magnitude as the American car giants Ford and General Motors, valued respectively at 48 and 46 billion dollars. Manufacturers who sell several million vehicles a year, and who are accelerating strongly in the electric car market. After having approached 100,000 units in 2022, Ford plans to reach an annual rate of 600,000 units by the end of 2023 and one million in 2026.
Faced with such giants, Vinfast’s balance sheet still looks starved. Closer to the startup, the Vietnamese manufacturer claims barely 19,000 electric vehicles manufactured and delivered as of June 30 with four models in the catalog. At the commercial level, it was only 16,000 cars sold at the end of July according to Reuters. The goal is to reach 50,000 units this year.
Automobile: the plan of the Vietnamese manufacturer Vinfast to seduce Europe
Billions of dollars sunk
Vinfast can certainly count for the moment on the support, for the moment unfailing, of its owner Pham Nhat Vuong, the richest man in Vietnam. The latter holds around 99% of the shares through its powerful conglomerate Vingroup and has already invested several billion dollars since 2018 to develop its automotive branch.
It must therefore accelerate sharply to meet the expectations of its owner and stock market investors. And for that it must absolutely impose itself internationally, in the United States – where it claims more than 10,000 vehicles already ordered – as in Europe.
2023-08-18 10:55:00
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