Why did VNG take a detour through Cayman to register on the US stock exchange Nasdaq?

Waiting for the second Vietnamese name on the US stock exchange

Vietnamese technology "unicorn" VNG (Upcom: VNZ), with CEO Le Hong Minh, has just announced that its major shareholder, VNG Limited, has submitted a registration application under form F-1 to the US Securities and Exchange Commission (SEC).

VNG Limited is known as the largest shareholder of VNG with a ratio of 49% (as of August 2). This is a foreign organization based in the Cayman Islands, a tax haven in the world .

VNG Limited has 2 related people who are insiders at VNG, including General Director (CEO) Le Hong Minh (owning 12.27% of capital) and Permanent Deputy General Director - Mr. Vuong Quang Khai (owning 4.99% of capital).

Thus, if all goes well, VNG will be the second largest Vietnamese enterprise to list on the US stock exchange, and also on the Nasdaq Global Select Market. This is the US technology stock exchange, gathering large technology enterprises with outstanding growth.

VNG has business operations in Vietnam and many other countries around the world, with 33 subsidiaries and affiliates, including 18 companies and charity funds in Vietnam and 14 companies abroad.

VNG is considered Vietnam’s first “unicorn”, a technology startup with a valuation of over 1 billion USD. VNG debuted on Upcom (Vietnam) on January 4 this year at VND240,000/share. By February 16, VNZ shares had reached over VND1.56 million/share after 11 consecutive ceiling price sessions.

At that time, VNG (owner of Zalo application) became the enterprise with the highest stock price of all time on the Vietnamese stock market with a capitalization of more than 55,900 billion VND (about 2.3 billion USD).

Currently, VNG has a capitalization of VND29,500 billion (equivalent to more than USD1.2 billion). Previously, in 2014, VNG was valued at USD1 billion. In 20219, the Singapore Government 's Temasek Investment Fund valued VNZ at USD2.2 billion.

*VNG's major shareholder wants to list on the US Nasdaq exchange.*

VNG has many big projects and is in the leading position in the field of online games and advertising. ZaloPay is considered one of the leading digital wallets in Vietnam. Besides, VNG has VNG Data Center…

Previously, on August 15, VinFast officially became the first major Vietnamese company to list on the US stock exchange, when it listed more than 2.3 billion VFS shares on the Nasdaq Global Select Market.

"Bypassing" tax havens to reach international level?

Up to this point, it is still too early to confirm whether billionaire Pham Nhat Vuong's VinFast can conquer the electric car market in the US and then Europe, the Middle East, ASEAN... or not.

But it can be seen that VinFast is a phenomenon in the world financial market. VinFast's successful listing on the US Nasdaq stock exchange is also considered a boost, encouraging businesses to reach out to the world, taking advantage of the huge capital in the international market to be able to develop breakthroughs.

With a current capitalization of 85 billion USD, VinFast is the second largest electric car company in the world, behind the American electric car company Tesla of billionaire Elon Musk (752 billion USD). Other electric car startups such as Li Auto, NiO, Rivian, Xpeng... all have much lower capitalizations, at: 38.8 billion USD, 20.3 billion USD, 19.3 billion USD and 14.5 billion USD, respectively.

VinFast's capitalization even surpasses long-standing car manufacturers such as Mercedes-Benz (78.4 billion USD), BMW (70 billion USD), Volkswagen (68 billion USD), Ferrari (56.7 billion USD), Honda (51.8 billion USD), Ford (48.3 billion USD),...

If the current price is maintained and the issuance is successful to foreign organizations and investors in the international market, VinFast will gain a huge source of capital for investment and business development.

Many investors have recently questioned why VinFast and now VNG chose a roundabout way to list on international stock exchanges. VinFast went through Singapore and then listed on the US stock exchange, while VNG let its major shareholder VNG Limited (headquartered in the tax haven of Cayman) register on Nasdaq.

Sharing about this issue, a securities expert said that there may be many factors related to complicated international law and businesses choose such a roundabout method. Besides, in this expert's opinion, anyway, foreign businesses are easier to list internationally than domestically headquartered businesses.

Previously, to prepare for the VinFast IPO, at the end of 2021, Vingroup Corporation of Chairman Pham Nhat Vuong restructured the ownership of this manufacturing enterprise.

The Group has transferred all of its capital contribution (51.52%) in VinFast Manufacturing and Trading Company Limited (VinFast Vietnam) to VinFast Trading & Investment Company, a subsidiary of Vingroup headquartered in Singapore (VinFast Singapore).

After restructuring, Vingroup and existing shareholders of VinFast Vietnam directly own 100% of VinFast Singapore's shares, thereby indirectly owning 99.9% of VinFast Vietnam. Vingroup Corporation still maintains its current 51.52% interest rate in VinFast Vietnam.

In the case of VNG, major shareholder VNG Limited has only submitted a registration form to the US Securities and Exchange Commission (SEC). The transaction size and offering price range have not yet been determined. VNG Limited plans to IPO Class A common stock on the Nasdaq stock exchange.

With a development history of nearly 20 years (since 2004) and many leading products, along with a large digital ecosystem in Vietnam, VNG is expected to be the next large enterprise to list on the US stock exchange and be able to raise money from these exchanges with capital of tens of thousands of billions of USD.

Like VinFast, VNG Limited also has support from large foreign financial institutions such as: Citigroup Global Markets, Morgan Stanley & Co, UBS Securities LLC (Credit Suisse Securities), Morgan Stanley...

VNG's VNZ shares on the Upcom floor on the morning of August 24 increased by more than 13% to VND 1,452,000/share.

With skyrocketing stock prices, the owner of a Vietnamese unicorn has entered the group of trillion-dollar tycoons . Vietnamese unicorn stock VNZ recorded its first transaction after nearly a month of being listed on the stock exchange and immediately set a record high price, at the same time bringing CEO Le Hong Minh into the club of people with trillion-dollar assets.

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