Shulou(Shulou.com)11/24 Report--

The richest man has a dream of building a car.

Author | Truman

Fan Riwang, the richest man in Vietnam, has laughed out loud recently.

It all started when VinFast landed in US stocks. On Tuesday, with the halo of Vietnam's first new car-building power, VinFast successfully rang the bell on NASDAQ and opened at $22, then soared, rising 254.64% on the day, reaching an intraday high of $38.78.

On the day of the listing, it closed at a high price of $37.06 per share, with a market capitalization of $86 billion.

Surpassing the sum of Ulay and ideals, and even surpassing established European and American car companies such as Mercedes-Benz, Ford and General Motors, Fan Riwang has become the fifth largest car company in the world by market capitalization, which makes Fan Riwang's worth soar by 40 billion US dollars overnight.

The day after listing, VinFast's market capitalization fell somewhat, but also reached $70 billion.

Source: Yahoo FinanceVinFast, founded in 2017, is a member of Fan Riwang's Vingroup Group. It is not only Vietnam's first independent car brand, but also Vietnam's first electric car manufacturer.

VinFast became the first Vietnamese car company to list in the United States and the first Vietnamese company to list in the United States after its merger with the special purpose acquisition company (SPAC) Black Spade Acquisition Co.

The joys and sorrows of the world are not the same. Not long ago, many newly built cars in the United States entered the bankruptcy process, and most of these bankrupt enterprises also experienced glorious moments, such as skyrocketing market capitalization, soaring founder's wealth, and so on.

As the only child of Vietnamese cars, can VinFast get rid of the spell that the launch of new cars is the pinnacle?

01. The way for the son of the king of gambling to enter VinFast's IPO has not been smooth. He announced plans to list in the United States as early as April last year, when he planned to raise $2 billion, valuing it at $60 billion.

As supply chain tensions affected production at the VinFast plant, Fan Riwang said that because the market was full of uncertainty, "if necessary, IPO will be postponed to next year (2023)."

Source: VinFast and with the Securities and Exchange Commission's increasingly stringent scrutiny of overseas companies listing in the United States, the road to listing of VinFast has become more difficult.

At the same time, over the past year or so, the valuation and share prices of the electric vehicle sector have plummeted, with the share prices of many new forces, including Tesla, fluctuating greatly, and some new car-building forces have received warnings of delisting.

It wasn't until the end of last year that VinFast began its initial public offering in the United States and plans to list its common stock on Nasdaq under the ticker symbol "VFS."

VinFast then decided to go public through a backdoor listing, while VinFast borrowed a company called Black Spade Acquisition, a Hong Kong-based SPAC company.

Source: VinFast, a little-known SPAC company, is owned by Melco International's Spade Capital, which is chaired by Lawrence Ho, who is also the second son of gambling tycoon Stanley Ho.

In July 2021, BSAQU listed on the New York Stock Exchange, raising about $150 million (about 960 million yuan). According to public sources, BSAQU is targeting companies in the entertainment industry, focusing on supporting technology, lifestyle brands, products or services, and entertainment media. In addition, he is responsible for managing the private assets and wealth of Lawrence Ho.

Their previous plan was to merge with an ideal company within two years, and now the "ideal company" is VinFast, the combined public company is called VinFast Auto, and the newly listed VinFast shares open at $22, up from the previously agreed $10 a share, while Spade values VinFast at $23 billion.

Source: after the completion of the Yahoo Finance merger, Vietnam's richest man, Fan Riwang, held 99% of the common shares of VinFast 2.3 billion through Vingroup and affiliated companies.

Although share prices soared on the day of listing, industry insiders believe that the main reason for the surge is that the number of outstanding shares is very small, accounting for less than 1% of the total shares, which is bound to fall later, which is also the process that most companies have to go through after the merger and listing with SPAC.

"listing in the US is an important milestone for VinFast and will open the door to capital markets for us in the future," said Madame Thy, chief executive of VinFast.

In addition, VinFast also revealed that the company is changing its sales model. Unlike Tesla, which only uses direct marketing, it will also cooperate with dealers in overseas markets. "We are turning to a mixed sales model, that is, we have our own sales stores, and we are also working with dealers to open dealer stores."

02. The birth of VinFast, a Vietnamese car maker, stems from Fan Riwang's dream of building a car. Fan Riwang believes that "Vietnam needs at least one globally recognized brand."

In 2017, VinFast was officially established, with the goal of building the first Vietnamese car within two years.

Source: VinFast before VinFast, Vietnam did not have its own car brand, and all the roads in Vietnam were full of foreign cars. As we all know, Vietnam does not have the foundation of the automobile industry, so if VinFast wants to build a car, it must take a "shortcut".

The shortcut to VinFast is "money ability".

Fan Riwang has never been soft on VinFast's investment, first building a factory and R & D building at a cost of $1.5 billion. With money and people, VinFast has poached a lot of auto bosses from well-known auto companies through a lot of money. Six of the nine board members of VinFast are from GM, and many of the employees are also poached by other auto companies.

Source: although there are many foreign executives in VinFast, which greatly promotes the landing of products, it also lays hidden dangers for the development of VinFast.

In the second year of its establishment, VinFast launched two models, the LUX A2.0 and the SA3.0, which were unveiled at the Paris Motor Show that year. But in fact, these two models are replaced by the previous generation of BMW 5-Series and BMW X5, and the engine is also the N20 engine eliminated by BMW.

After investing a lot of cost, the price of mass-produced cars is not cheap, and new cars are not popular in the market.

Source: VinFast

VinFast later partnered with Chevrolet to take ownership of GM's plant in Hanoi, which means VinFast has the right to sell GM-branded vehicles produced at the plant.

VinFast's fourth model, the Fadil, is actually the Chevrolet Spark.

This car is also a key model for VinFast to truly enter the mass market. In 2021, Fadil became the top seller in Vietnam with 24000 units.

As electrification became a global consensus, VinFast realized this after it gradually got back on track. In 2021, the company began a comprehensive transformation of new energy, and announced its entry into the US market.

Source: according to the current popular standards, VinFastVinFast is a serious new force in car building, with a short time of establishment, new energy and the listing of US stocks. But compared with the new forces suffering from lack of money in China, VinFast is a rich second generation, from starting to build cars to listing in the United States, there has been no difference in money.

Money is spent on technology, engines, brands and poaching, and the money basically comes from one place-Vietnam's richest man, Fan Riwang, and his Vingroup Group, which is VinFast's real "cash machine".

03. The car-building feelings of the richest man let's talk about Fan Riwang, the position of Vietnam's richest man. He has been sitting for 10 years. However, before he became Vietnam's richest man, his experience was also legendary.

Born into an ordinary family in Vietnam, Fan Riwang was admitted to Hanoi University of Mining and Geosciences in Vietnam. Because of his excellent grades, he won a scholarship to study in the Soviet Union at that time.

When Fan Riwang graduated from university in 1992, when the Soviet Union collapsed, Fan Riwang did not return to Vietnam, but went to Ukraine to start the instant noodle brand Mivina.

Mivina imported raw materials from Vietnam and other places, mass produced and sold instant noodles-based instant food products in Ukraine, and Fan Riwang has grown in this field, even accounting for half of the Ukrainian instant noodle market. Fan Riwang accounts for 97 per cent of the Ukrainian market.

Source: VinFast with a small bag of instant noodles, Fan Riwang became Ukraine's "instant noodle king".

Entering the new century, Fan Riwang saw the development of Vietnam and had the first bucket of money earned by instant noodles, so he began to gradually transfer his business to Vietnam. After returning to his hometown, Fan Riwang entered the real estate market in Vietnam.

In 2002, he founded the luxury tourist resort Vinpearl and the real estate business Vincom in his hometown, and formally merged the two businesses into Vingroup in 2012.

Source: from Vinpearl Resort to Vincom, the first commercial center complex in downtown Hanoi, Fan Riwang has become the hottest businessman in Vietnam.

Vingroup Group is also becoming the largest private company in Vietnam, with a total market capitalization of about $24 billion for Vingroup and all its listed subsidiaries at the end of last year. Based on Vietnam's consolidated income for the year, US $24 billion is equivalent to 1.5 per cent of Vietnam's annual GDP in 2021.

Fan Riwang himself made the 2022 Forbes Global Rich list with a fortune of US $6.2 billion, and continued to be the richest man in Vietnam, ranking 411th in the world.

Source: VinFastVingroup is currently the largest private enterprise in Vietnam, its business covers real estate, medicine, education, mobile communications, agriculture and other fields, it can be said that Vietnamese can not do without Vingroup.

Perhaps the richest man has a car dream, and Fan Riwang is no exception, which is why he has the later VinFast.

In the process of panning for gold overseas, Fan Riwang is soberly aware that "it is still obvious that the Vietnamese people are not respected by the world." He sighed: "many Vietnamese abroad often say they are Japanese or Korean, and I want to contribute to changing this."

In an interview with the Vietnam Daily Express (VnExpress), Fan Riwang talked about the reasons for the creation of VinFast: "Vietnam needs to have at least one globally recognized brand."

After trying fields such as mobile phones, Fan Riwang finally chose the car track. "it won't be that simple, but my determination is very strong."

Source: VinFast Fan Riwang firmly chose the auto industry and thought from the beginning that the future belonged to electric cars. In his view: "to make a choice early, not half oil and half electricity." The future is the era of electric cars, and it is imperative to transform into pure electric vehicles.

In order to build a car, Fan Riwang shouted the slogan "build the first Vietnamese car in two years". In this way, this is going to become a globally recognized Vietnamese car brand, born, mass-produced, out to sea, and finally listed in six years.

With the successful listing of VinFast, Fan Riwang's value has also begun to soar. If VinFast develops smoothly in the capital market, Fan Riwang will undoubtedly continue to remain the richest man in Vietnam.

04. Listing is not the end. Fan Riwang wants VinFast to leave Vietnamese cars in the international market, but can it break through the tight encirclement?

Although Fan Riwang said he was ready to lose money for five years, car-building is different from other industries, as can be seen from the extent to which a group of new forces in the country are burning money.

In order to support the development of VinFast, Fan Riwang and Vingroup and their affiliated companies and external lenders have continuously injected capital into VinFast since its establishment in 2017, with a cumulative investment of US $9.3 billion.

Source: in VinFast2021 and 2022, VinFast's operating income was $670 million and $630 million, respectively, with a corresponding net loss of $1.348 billion and $2.07 billion, respectively.

Over the next two years, VinFast lost more than $3 billion (about 24 billion yuan), and its net loss in the first quarter of this year reached $599 million.

At present, VinFast has delivered four electric vehicles in Vietnam: VF E34, VF 5, VF 8 and VF 9, of which VF 8 and VF 9 are SUV models for the global market.

Source: VinFast but VinFast has focused on the European and American markets since its inception. It has shipped about 2100 new cars from Vietnam to the United States and nearly 800 electric vehicles to Canada.

In March, it also announced a $4 billion electric car plant in North Carolina, which is expected to be completed and put into production by July 2024, but has now been postponed to 2025.

It is reported that the annual output of the first stage of full production will reach 150000 vehicles. At the end of last month, the factory just held a groundbreaking ceremony.

The plant is the first electric vehicle production project in North Carolina and the largest economic development project in the state. The first phase, with a total investment of US $2 billion, covers an area of 733 hectares and includes five main production areas: body welding, assembly, stamping, painting and energy center.

Last year, Biden personally announced for his platform that the overall investment in the project would reach $4 billion, creating more than 7000 jobs. Once the factory goes into production, its electric cars will be eligible for subsidies in the local government's inflation reduction Act.

However, the US market is the stronghold of Tesla, and there are competitors such as Lucid and Rivian. Whether it is product power or price, VinFast does not have an advantage.

Source: VinFastVinFast officially went on sale in California in March this year, but two months later, the National Highway Traffic Safety Administration was recalled for safety warnings due to software errors in the car's display screen, preventing critical safety information from being displayed and possibly the risk of a crash.

Currently, VinFast's medium-sized pure electric SUV VF 8 starts at $46000 in the United States, which is lower than the starting price of $47740 for Tesla Model Y, but Tesla still gets a $7500 federal tax credit.

That's why VinFast is eager to build a plant in North America, CEO Madame Thy said. Through the North Carolina plant, it is expected to significantly reduce costs and provide products to American customers at affordable prices.

In the coming period of time, or the highlight moment of VinFast, but the next trend depends on your own creation.

This article is from the official account of Wechat: Super Electric Lab (ID:SuperEV-Lab). Author: Truman.

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