Vietnamese EV start-up VinFast Auto has gained significant traction in the electric vehicle market, with a notable portion of its sales going to a taxi company under its parent company, Vingroup.
Impressive Sales Figures
VinFast (ticker: VFS) reported a remarkable delivery of 11,300 EVs in the first half of 2023. Out of this total, over 7,000 EVs found their way into the fleet of Green and Smart Mobility, the Vietnamese taxi company controlled by Vingroup.
Importance of Independent Demand
The volume of sales to Green and Smart Mobility should not go unnoticed. Investors should pay close attention to this figure as it reflects the demand for VinFast's electric vehicles from independent customers.
Details regarding VinFast's sales to Green and Smart Mobility were disclosed in a recent filing with the Securities and Exchange Commission. The filing, along with a previous one from late July, emphasized the significance of paying attention to disclosure reports.
According to expert Robert Willens, comprehensive disclosure is essential due to U.S. and international accounting standards that require transparency in related party transactions. The filings revealed that VinFast made sales worth $6.3 million to Green and Smart Mobility in the first quarter of 2023, contributing to a total of approximately $84 million in sales for that period.
Future Updates Awaited
While second-quarter figures are highly anticipated, VinFast has not yet released them. In response to inquiries, the company refrained from divulging any customer-specific information beyond what was already disclosed in the SEC filing.
Uniting Under a Common Umbrella
Both VinFast and Green and Smart Mobility fall under the umbrella of Vingroup, with Vingroup's former chairman Pham Nhat Vuong directly owning around 51% of Vingroup stock. Bloomberg reports that Vuong currently holds the position of board chair at VinFast.
VinFast's remarkable sales performance highlights its growing presence in the electric vehicle market. The partnership with Green and Smart Mobility demonstrates the potential for widespread adoption of electric vehicles in Vietnam and beyond.
VinFast's Dominance in the Stock Market
VinFast, a prominent automotive manufacturer, is making waves with its impressive stock ownership. Out of the 2.3 billion shares available, a staggering 1.2 billion are held by Vingroup, demonstrating the company's stronghold in the market. Another significant shareholder is Vietnam Investment Group, with 1.1 billion VinFast shares under its ownership. Vuong, listed as the sole shareholder, controls this investment entity as well. As a result, Vuong effectively dominates approximately 99.7% of VinFast stock, as disclosed in SEC filings.
The extensive control Vuong possesses over the company sheds light on the volatility of VinFast's stock. Since its merger with a special-purpose acquisition company in early August, the stock has experienced significant fluctuations mainly due to a limited quantity of shares available for trading.
However, recent developments seek to alleviate this issue and mitigate volatility. A Tuesday filing aims to register approximately 11 million shares for sale. These shares will come from existing shareholders, primarily associated with the SPAC merger and exercise of stock warrants. This move will increase the number of shares available for trading and subsequently stabilize the market.
Before the merger, on August 14, VinFast shares closed at $10.45. Following the merger and the change in stock symbol to "VFS," shares skyrocketed to an intraday high of $93 on August 28. This surge propelled the company's market capitalization to roughly $215 billion, reflecting the significant potential VinFast possesses.
However, recent trends indicate a decline in VinFast's stock value. For nine consecutive days leading up to Tuesday's trading, shares experienced a downward trend. Currently, midday trading on Tuesday shows a 4% increase, with each share priced at $17.24. In comparison, the S&P 500 and Nasdaq Composite are experiencing slight declines of about 0.6% and 1.2%, respectively.
These developments highlight VinFast's commanding presence in the stock market, demonstrating both its potential for growth and the need to address volatility.
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