VNG on August 24 announced that VNG Limited has officially filed to list its shares under the F-1 form to the US Securities and Exchange Commission (SEC).

VNG Limited, a shareholder of VNG, plans IPO Class A common shares on the Nasdaq Global Select Market, while Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and BofA Securities, Inc. will act as the underwriters for the IPO. The scale of transactions and price range have not been defined yet.

After 12 years, Le Hong Minh, president of VNG, who for years has wanted to list shares on international bourses, has come one step closer to the US stock market.

Analysts mentioned Minh’s statement in an interview with Forbes in mid-2010 that he hoped VNG shares would appear on international bourses such as Nasdaq or Hong Kong one day. In 2017, VNG signed an MOU about the plan to list shares on Nasdaq.

In 2021, VNG showed the plan to list shares in the US via a merger with a special purpose acquisition company (SPAC), the same way now being followed by VinFast.

In July 2022, sources said VNG would list shares in the US in early 2023, planning to offer to sell 12.5 percent of shares at the IPO on Nasdaq.

However, there was no listing on Nasdaq then. Instead, VNG began listing 35,844,262 shares, VNZ, on UpCom on January 5, 2023. The VNZ price at the debut was VND240,000 per share, with which VNG had capitalization value of VND8.592 trillion.

VNZ once became the most expensive share on Vietnam's bourses. Its prices hit the ceiling for 10 consecutive sessions and the shares once traded at VND1.4 million per share.

However, the trading volume of VNZ is not high, from several hundreds to several thousands shares per session. At present, VNZ is traded at VND1.12 million per share, and the price is on the rise.

Established in 2004, VNG has grown from a startup with five members to a technology firm with the largest digital ecosystem in Vietnam which manufactures products and provides services for millions of users.

According to Newzoo, VNG is the leading game distributor in Vietnam and has been expanding rapidly in the global market. It is the owner of Zalo, the most popular messaging app in Vietnam, with 75 million users every month, according to F&S.

Its other outstanding products include Zing MP3, the largest online music listening platform with 28 million users a month, and ZaloPay, the e-wallet with the fastest growth rate in Vietnam.

Why did VNG make a detour?

In the case of VNG, a big shareholder of the company – VNG Limited – has filed for a listing with the SEC.

VNG Limited is known as the biggest shareholder in VNG with 49 percent of shares as of August 2. It is a foreign institution headquartered in Cayman Islands, a tax haven.

VNG has business operations in Vietnam and many other countries, with 33 subsidiaries and affiliated companies, including 18 companies and charity funds in Vietnam, and 14 companies overseas.

VNG is the first unicorn tech startup of Vietnam. At present, it has capitalization of VND29.5 trillion, or $1.2 billion. In 2014, it was valued at $1 billion. In 2021, VNZ was valued by Temasek at $2.2 billion.

A question has been raised that way VinFast some days ago and VNG now decided to ‘take a roundabout’ to enter international bourse. VinFast comes to Singapore before enters the US, while VNG lets its big shareholder VNG Limited register to list on Nasdaq.

A securities expert said that there might be complex legal procedures and this prompts VNG to choose that way. He added that it is easier for a foreign company to register the listing than a Vietnamese headquartered one.

In the case of VinFast, in late 2021 Vingroup transferred all of its capital in VinFast Vietnam (51.52 percent) to VinFast Trading & Investment, a subsidiary of Vingroup with the headquarters registered in Singapore (VinFast Singapore).

After the restructuring, Vingroup and existing shareholders of VinFast Vietnam are holding 100 percent of shares of VinFast Singapore, thus indirectly possessing 99.9 percent of VinFast Vietnam.

Manh Ha