The consecutive price increases of VFS shares after the Vietnamese automobile maker made its debut on Nasdaq Global Select Market reflects international investors’ confidence in VinFast. The stock assets of billionaire Pham Nhat Vuong were increasing rapidly on Forbes’ ranking of the world’s billionaires.

When the price of a share increases, the assets of the company’s owners increase proportionally. But this was not true in the case of VinFast. VFS share prices increased by 17 percent to $54 per share at the opening of the August 30 session. However, despite the share price increases, Vuong’s assets calculated by Forbes decreased.

Forbes has changed its valuation method applied to VinFast; the new figures about the value of VinFast have caused a big surprise.

It calculated the ratio of prices to revenue and referred to the average prices of other electric automobile manufacturers such as Lucid, Neo and Tesla, instead of calculating based on market share prices.

The new calculation method has caught attention from the public. With the method, VinFast’s value has decreased to over $2 billion, while Vuong’s assets were updated at $6.9 billion as of 10 pm August 30, 2023.

The calculation method has raised controversy. Forbes has long followed the calculation method based on the prices of listed shares. In some cases, it makes some adjustments, but this doesn’t happen regularly.

Many Vietnamese analysts have disagreed with the adjustment made by Forbes, saying that those on the same playing field must use the same rules, and not different reference systems.

As VFS shares have been listed on Nasdaq, the shares have been traded openly and investors buy/sell shares in accordance with market rules.

The analysts say that the figure of $2 billion Forbes has assigned to VinFast is wrong and this is a "conclusion dictated by feeling", because the production complex with modern equipment of VinFast, plus R&D (research and development) costs alone, would be much higher.

It seems that VinFast is an "unprecedented phenomenon", which confused Forbes. Meanwhile, other analysts surmise that Forbes has not conducted an in-depth appraisal, so the calculation is not "close to reality".

Some years ago, the world witnessed the so-called "electric vehicle storm" in the capital market. However, the circumstances were different at that moment.

Lordstown Motors, Nikola and Lucid whose valuations were billions of dollars, in fact, had delivered hundreds of cars by the time they began listing on the bourse. Lordstown Motors manufactured 19 cars after many years, and then filed for bankruptcy.

It was the time when investors just followed the crowd when injecting money into the shares of electric vehicle manufacturers, and the manufacturers could get big benefits.

Nevertheless, investors have become very cautious when appraising startups making electric automobiles. VinFast now is in the position that is different from other electric vehicle manufacturers. 

Before officially listing shares on Nasdaq, the Vietnamese manufacturer built a modern factory system and made electric automobiles in all market segments. More importantly, tens of thousands of products had been delivered by that time.

VinFast is now a ‘special phenomenon’ which attracts the attention of investors.  VFS will gradually enter a stable ‘trajectory’. In principle, VFS share prices will still be determined by the market.

By August 29, 2023, Vietnam had six USD billionaires as recognized by Forbes. Bloomberg still had not yet returned Vuong to its list of top 500 billionaires in the world.

Manh Ha