Assortment of firms take on IPO dreams

December 02, 2022 | 10:00
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Besides ample private funding, some major Vietnamese businesses are trying to gain scale as listed companies to strategically accelerate growth.

Vietnamese tech powerhouse VNG Corporation is planning to make its listing on the Unlisted Public Company Market (UPCoM) exchange, it announced last week. The company will finalise the shareholder list to implement stock registration procedures at the Vietnam Securities Depository and registration for trading at UPCoM.

Assortment of firms take on IPO dreams
VinFast is ramping up its interest in United States expansion

To facilitate the goal, VNG will suspend all share transfer activities from November 28 until the successful listing.

Of Vietnam’s three bourses, the Ho Chi Minh Stock Exchange (HSX) is the largest and with the highest criteria. A corporation must have generated profits within the past two years in order to be listed. However, VNG incurred a loss of more than VND70 billion ($2.8 million) in 2021. The move to list on UPCoM is expected to help VNG increase liquidity and raise capital more easily.

Indeed, VNG – one of numerous Southeast Asian unicorns with a valuation of more than $1 billion – has been mulling over a listing on the US tech-heavy Nasdaq. As reported by DealStreetAsia, VNG planned to offer 12.5 per cent of its stake to investors on the Nasdaq later this year. Meanwhile, Bloomberg reported last year that the technology firm was expected to raise $200-300 million prior to the US listing. The success of its initial public offering (IPO) would help VNG to reach a valuation of $2-3 billion. However, VNG has changed its plan and decided to list on the Vietnamese bourse instead.

Bui Van Trinh, a partner of Audit and Assurance at Deloitte Vietnam, said, “In the face of uncertainties in the global and domestic markets, businesses and investors are more cautious in the second half of the year. Vietnam only recorded six successful IPOs with a value of just over $65 million in the period.”

Among them were three mega deals secured by industrial production operator Ton Dong A ($26.89 billion), consumer business firm Nova Consumer ($21 billion) and financial services company Green+ ($6.72 million).

Elsewhere, VinFast – the vehicle arm of Vietnam’s biggest conglomerate Vingroup – is considering its IPO in the US as soon as January. The company believes it can raise at least $1 billion from the IPO.

Last week, a ship with VinFast emblazoned across it set sail from Haiphong city in the north to bring about 5,000 electric SUVs to the United States. It is currently unknown how many vehicles have already been purchased, but they are expected to be delivered to American customers from December.

Meanwhile, local e-commerce platform Tiki planned to make its US listing in 2025, but founder Tran Ngoc Thai Son now wants to implement the plan one year earlier. The platform also intends to raise more offshore cash through the special purpose acquisition company model.

Delivery service provider Giaohangtietkiem is also aiming for a domestic IPO by early 2023 to raise capital. The move will help the company cope with increasing competition in the logistics sector. The company expects its valuation to reach $1 billion. Pawn shop F88 has also revealed its ambition to go public in 2024, when the number of representative offices could reach 1,400 units and market value is hoped to reach $1 billion.

In light of recent indicators of a slowdown in the capital mobilisation channel through corporate bonds in Vietnam, which has caused many businesses to struggle with turning around capital, these are seen as positive signals for businesses, helping them to develop their operations.

Kazuhiko Yoshimatsu, general manager and chief representative of the Tokyo Stock Exchange (TSE) in Singapore, said at last week’s Vietnam M&A Forum organised by VIR, “Vietnam’s capital market has posted remarkable growth over the past decade. Meanwhile, the TSE has had listed companies from Asia, including ASEAN. We would like to support listed Japanese companies to venture into the overseas markets."

Two weeks ago, the TSE signed an MoU with a Japanese trade promotion agency to promote trade between Japan and ASEAN countries, including Vietnam.

Data as of November 11 compiled by Deloitte Southeast Asia showed that regional firms have raised $6.3 billion via 136 IPOs, which is 52 per cent lower than the record $13.3 billion raised through 152 IPOs last year.

Regarding the outlook for Southeast Asia, Tay Hwee Ling, disruptive events advisory leader at Deloitte Southeast Asia and Singapore, is optimistic on the room for high growth in the region.

“In terms of the outlook into 2023, we expect IPO activity to go through cyclical highs and lows as the market re-calibrates from the pandemic mindset into more regular programming. While valuations may be generally lower for tech companies now, the ones with solid business fundamentals and the ability to prove profitability will still be able to achieve optimal market valuation and benefit from the markets,” he said.

VinFast to file for an IPO in US in January 2023 VinFast to file for an IPO in US in January 2023

VinFast, the electric vehicles (EV) manufacturer subsidiary of Vingroup, is allegedly considering its planned initial public offering (IPO) in the US as soon as January 2023.

IPO funds halve across Southeast Asia compared to previous year IPO funds halve across Southeast Asia compared to previous year

Fresh data as of November 11 compiled by Deloitte Southeast Asia shows that Southeast Asian firms have raised $6.3 billion via 136 IPOs, which is 52 per cent lower than the record $13.3 billion raised through 152 IPOs in 2021.

By Van Huong

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