Vietnam’s VinGroup – The Company Behind the VinFast Car

With the filing of the VinFast IPO (Dec 2022 or early 2023), the EV car-brand native to Vietnam and first of its country, the industrial prowess of Vietnam is about to explode onto the world’s consciousness. This is remarkable for a country that was, within living memory, one of the poorest in the world. Due to the country’s economic liberalizations and highly-technical workforce, the South-East Asian country has become the preferred manufacturing base for top-tier global brands.

Behind VinFast is VinGroup (HOSE:VIC): Vietnam’s largest privately-run, publicly-traded company, with tendrils in everything from real estate, to private education, to AI — like a Vietnamese Samsung.

In this article, we provide a primer on VinGroup and VinFast, to help shed light on the little-known company that one day may become a global household name like Samsung or Panasonic.

Background of VinGroup

VinGroup is the largest Vietnamese company by market-cap, with over $5 Billion USD in annual revenue (2022) and net income of $240 million USD, both down double-digits from previous years due to the COVID-19 pandemic. The CEO is Nguyễn Việt Quang, a long-time board director and major property developer, while the founder Phạm Nhật Vượng serves as the Vingroup’s Chairman.

Notable milestones in the history of the company include:

• VinGroup was founded by Phạm Nhật Vượng (b. 1968, Hanoi), currently the richest man in Vietnam. As of 2021, he had estimated net worth of $9 Billion USD.
  • Read more about the founder and entrepreneur in our mini-bio.
• Mr. Phạm studied at the Moscow Geological Prospecting Institute. He began his entrepreneurial career selling imported Vietnamese goods from his dorm room. His first successful venture was Мивина, a popular brand of instant noodle in Ukraine. This blossomed into Technocom, a leading Ukrainian dried-goods firm that was sold to Nestle in 2009 for $150 million USD.
• The profits from his Ukraine fartories were reinvested into Vietnam, first establishing the the Vinpearl Luxury Resort in Nha Trang (2003) and Vincom Towers in Hanoi.
• The resort businesses (VinPearl) and real estate development businesses (Vincom) were merged in 2012 and went public as the Vingroup Joint Stock Company (HOSE:VIC).
• In 2012, VinGroup first began its long series of diversified subsidiaries by launching Vincharm (a health and beauty manufactuer) and Vinmec (a provider of high-quality medical services and hosptials).
• 2012 also saw the first successful issuance of internationally-listed convertible debts (Singapore Stock Exchange).
• In 2013, VinGroup made additional forays into the education and the retail markets with the establishment of VinSchool (a network of private schools at students from pre-Kindergarten to high school), VinKE and Royal City (a mega-mall and multi-building condominium in Hanoi), and VinHomes (luxury homes and planned communities).
• 2014 saw the launch of the iconic VinMart brand of modern supermarkets and convenience stores.
• In 2015, VinGroup launched VinDS in the fashion and sports-wear sector, and VinEco, a series of agricultural farms.
• VinFast began in 2017, starting with boats, trailers, and auxiliary parts for motor vehicles and engines.
• In 2018, VinGroup expanded its technological and education subsidaries with VinTech and VinSmart (mobile phone manufacturing) and VinUni, a network of private universities.
• VinFast quickly moved into car production, showcasing it’s products at the 2018 Paris Motor Show, including a 5-seat sedan and a 7-seat SUV.
• on July 28 2019, VinFast delivered its first vehicles.

See below for an expanded listing of the various subsidiaries of VinGroup

VinGroup’s Wider Impact on Vietnam

There is virtually no segment of the Vietnamese economy that isn’t touched by VinGroup’s multifaceted ventures. In many respects, VinGroup represents (and is partially responsible for) the transitioning of Vietnam out of its legacy command-and-control mentality to a modern ethos of value-creation and customer-focus. They are known within Vietnam for high-quality products and services, whereas legacy competitors are stereotypically viewed as being ambivalent towards strenuous work and mired in employee-entitlement.

Many of VinGroup services cater to and represent the aspirations of Vietnamese families for upward-mobility and a middle-class standard of living. Businesses like VinMart or VinHomes are instantly recognizable by foreigners for their slick, modern aesthetic that can compete with top foreign brands.

Business Culture at VinGroup

VinGroup is known within Vietnam for having an intense, high-octane business culture geared towards emulating world-class products and services in Vietnam.

Employees are paid high-salaries, up to three of four times the industry-standard within Vietnam. For that level of compensation, employees are expected be very high-performing. For example, there is a tacit expectation that employees should be voluntarily available around the clock, 7 days a week, and do what it takes to complete projects. The culture encourages an intense internal competition that filters-out underperforming employees. Churn and self-selection out of the company are accepted as the cost of winnowing done the workforce to only high-quality talent.

Having a resume with experience at VinGroup is highly-respected by others employers, such that VinGroup employees can use their short, high-intensity tenure as a launchpad into other positions: employees can quickly establish a network of partners and parachute themselves into senior positions at lower-tier companies, given VinGroups widespread connections in industry and government.

Vietnamese people are attracted to VinGroup for its prestige, but also for its employee-access program which offers discounted services under the VinGroup umbrella, such as hospitals, good schools and retail discounts, even access to modern homes.

LEARN MORE about Vietnamese Business Culture – tips for foreigners

VinFast Cars – Vietnam’s First Car Brand for Export

The VinGroup subsidiary VinFast launched in 2017 and is increasingly focused on electric vehicles. The name VinFast is a loose acronym for (Vi)et(N)am, (Ph)ong cách, (A)n toàn, (S)áng tạo, (T)iên phong, which translate to Stylish, Safety, Creativity, and Innovation.

To jumpstart its production, the Vietnamese company is rumored to have aggressively hired designers and engineers from other luxury brands in Europe and Japan (e.g. Lamborgini, BMW, Lexus, Audi, etc.), leveraging their knowledge to quickly design and produce cars that meet European standards and regulations. VinFast also has cooperative agreements for sharing technology, consultation and coordinating trainings with established brands such as BMW, General Motors, Siemens, LG, Foxconn, Torino Design and others.

VinFast first showcased its products at the 2018 Paris Motor Show, featuring a petrol-powered sedan and SUV. Its first retail purchases were delivered in July 2019 for a hefty high-end price.

VinFast’s pivot to the EV market was kicked-off with a licensing agreement with GM to rebrand the Chevy Spark under a VinFast label. The company is now investing a lot of capital into battery production, with a new low-cast factory in Ha Tinh province.

Globally, VinFast is targeting sales of approximately 40k EVs in 2022.

VinFast Initial Public Offering in the USA

VinFast has filed to IPO in the USA in Dec 2022 or early 2023. According to Dragon Capital, the US-listed is being considered in order to tap into the ESG-trend (so called “environmental-social-governance” investing) in which USA institutional investors are pouring money into environmentally-responsible companies such as EV producers.

Furthermore, US exchanges allow loss-making companies to get listed. In contrast, Vietnamese stock exchanges require listed-companies to be profitable — a criteria that has stymied Vietnamese start-ups and growth companies. There are also stringent caps on foreigner ownership of Vietnamese companies in Vietnam, resulting in market distortions.

The VinFast IPO may happen as early as Q4 2022, but more likely in early 2023, with a target raise of $3 Billion USD.

VinGroups Subsidiaries

VinGroup has a far-reaching and ever-expanding portfolio of industry-divisions and subsidiary companies. Some operate as quasi-independent subsidiaries with majority ownership by VinGroup. Many are run by family members and confidants of Vincom founder Mr. Phạm.

• Vin AI – machine-learning research division, with initial applications seemingly aimed at medical technology and diagnostics.
• VinBus – electric bus project in Hanoi and Ho Chi Minh City.
• Vincharm – consumer health and beauty products.
• Vincom – commercial and office real estate development, such as the mega-mall Royal City in Hanoi.
• VinCSS – network security services.
• VinDS – retail fashion, shoes, and sportswear.
• VinEco – agricultural products.
• VinFa – pharmaceutical research into traditional Vietnamese medicine.
• VinFast – first Vietnamese automotive brand and manufacturer, including battery productions and planned EV models.
• Vinhomes – luxury homes and planned communities throughout Vietnam; for example, VinHomes Riverside in Hanoi.
• VinID – identification, loyalty program, and e-payment wallet Monpay.
• LOTUS/Viva Vietnam – fledgling social media platform in Vietnam.
• VinMart – Western-style supermarkets and convenience stores (now owned by Masan Consumer Goods Joint Stock Company)
• VinMec – network of hospitals and clinics, such as VinMec Times City in Hanoi.
• VinPearl – 5-star resorts, golf courses, and hotels throughout Vietnam, such as Vinpearl Phú Quốc.
• VinSchool – 27 private schools from pre-K to high school around Hanoi and Ho Chi Minh City.
• VinSmart – mobile phone manufacturer; acquired former LG manufacturing plant in Vietnam.
• Vintata – studio for animated film production.
• VinTech – umbrella for VinCSS, Vin AI, and VinSoftware.
• VinUni – private universities, including medical schools and English-based international schools, with strategic agreements with Cornell University and the University of Pennsylvania, and more.
• VinWonders – amusement parks, water-parks, and safaris.

Bullish on Vietnam

The prospect of multiple Vietnamese IPO’s on USA exchanges, like VinFast and Bamboo Airways, or the rise of Samsung-like Vietnamese mega-corporations, are some of the reasons we are very bullish Vietnam.

We detail our bull-case here, identifying various factors like free-trade tail-winds and a society of high-conscientious individuals (not unlike Korea). In another post, we also detail how retail investors can get exposure to Vietnam, which, unfortunately is not so easy.