VNG reveals for the first time that Tencent and Ant Group are shareholders.

VnExpress•24/08/2023

In a filing submitted to the US Securities and Exchange Commission, VNG Limited – the largest shareholder and controlling entity of VNG Vietnam – has named its foreign shareholders, Tencent and Ant Group.

VNG has just announced that VNG Limited has filed its Form F-1 registration application with the U.S. Securities and Exchange Commission (SEC). VNG Limited, the largest shareholder of VNG, plans to conduct an initial public offering (IPO) of Class A common shares on the Nasdaq Global Select Market under the ticker symbol VNG.

This filing indicates that VNG Limited holds a 49% direct stake in VNG Corporation, acquired from foreign shareholders. However, the company assesses that, based on ownership stakes and other factors such as the dispersion and voting history of the remaining shares in VNG Corporation, VNG Limited will have legal control over the entity in Vietnam even before the IPO begins.

VNG Limited also reached an agreement and gained control over BigV Technology Company - the second largest shareholder in VNG, after completing its IPO.

According to filings submitted to the SEC, the projected shareholder structure after the IPO of the company controlling VNG includes a number of large corporations, including Tencent, Ant Group, and GIC - the investment fund of the Singaporean government .

VNG Limited's outstanding shares are divided into two classes: Class A common shares and Class B common shares. One Class B share corresponds to 10 voting rights, while one Class A share corresponds to only one voting right. These two classes of shares are issued to two separate groups of shareholders: foreign shareholders and VNG's management.

The two founding shareholders of VNG, Mr. Le Hong Minh and Mr. Vuong Quang Khai, own 12.6 million and 1.68 million Class B shares respectively, corresponding to voting rights percentages of 45% and 6% in VNG Limited. The records indicate that Mr. Minh and Mr. Khai are identified as a group of shareholders, with a combined ownership of 51% and controlling stake in VNG Limited.

Meanwhile, Tencent is the largest foreign shareholder, owning over 65 million Class A shares, equivalent to 23% of the voting rights. Tencent's holdings include over 43 million shares of Tenacious Bulldog Holdings Limited, 14.5 million shares of Prosperous Prince Enterprises Limited, and over 7.5 million shares to be issued after the IPO is completed.

Tenacious Bulldog and Prosperous Prince Enterprises are two companies registered in the British Virgin Islands, a "tax haven," and were listed as major shareholders in VNG in 2018. According to filings submitted to the SEC, VNG Limited stated that both companies are under the control of Tencent Holdings.

GIC, through Gamvest Pte, and Ant Group – formerly owned by Jack Ma, through Ant International Technologies – respectively own 15.2 million and 7.77 million Class A shares, representing 5.4% and 2.8% of the voting rights in VNG Limited. Seletar Investments owns 3.4%.

VNG was established in 2004, initially named Vinagame Joint Stock Company, with a charter capital of 15 billion VND. The company's charter capital currently exceeds 287 billion VND, after recently canceling over 7.1 million treasury shares.

Listing shares on an international stock exchange has been a long-held goal for VNG. In 2017, VNG signed a memorandum of understanding regarding listing on Nasdaq in the US. However, this process subsequently stalled.

In 2021, Bloomberg reported that VNG was considering a US stock listing through a merger with a special purpose acquisition company (SPAC). If the transaction went through, VNG could be valued at $2-3 billion.

According to Newzoo , a company specializing in game market research, VNG is currently the leading game publisher in Vietnam, and also owns Zalo - the most popular messaging app in Vietnam with over 75 million monthly active users - and several other applications.

In early 2023, VNG shares were listed on the UPCoM market. VNZ started with a reference price of 240,000 VND in its first trading session in early January. Subsequently, the stock quickly became the highest-priced stock on the stock market with a series of consecutive limit-up sessions, with only 100 shares traded. At one point, VNG's share price exceeded 1.2 million VND. However, subsequent profit-taking pressure caused VNZ to fall below 1 million VND.

Over the past month, this stock has increased in price by more than 50%. However, the average trading volume remains at only around 2,500 shares per session.

In the first half of the year, VNG achieved revenue of over 4,000 billion VND and pre-tax profit of nearly 50 billion VND. VNG's main business activities include online games, connectivity platforms, payment and finance, and cloud services. The company also operates in Hong Kong, Thailand, Singapore, the Philippines, Myanmar, Taiwan, and Indonesia.

VNG's most profitable business segment is online gaming services, accounting for approximately 70-80% of total revenue in recent years.

Minh Son

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