"VinFast has put Vietnam firmly on the radar," remarked Johan Annell, a partner at ARC Group in Beijing. It is a visible symbol that, despite capital controls that are a major formal impediment to companies, it is still possible for them to go public. Consultants who search for potential IPO clients far in advance are now engaging more with Vietnamese and regional firms. The World Bank estimates that between 2002 and 2022, Vietnam's gross domestic product (GDP) increased by a factor of 3.6 on a per capita basis, reaching nearly $3,700.
A wave of businesses based in Asia are mulling over debuting on the U.S. stock exchange, a feat that was only accomplished by Chinese startups in the past. Out of this group, VinFast, an electric car business from Vietnam, issued a groundbreaking listing in August via a merge with the American-listed special purpose acquisition company Black Spade Acquisition. Not a formal IPO, the listing was quickly followed up by VNG, a Vietnamese tech titan, registering its intention to put shares in the Nasdaq. Among its services, the company deals in gaming, finance, and music streaming.ARC Group's Beijing-based partner, Johan Annell, noted the significance of VinFast's listing. He stated that it "puts the [country] on the map" and that it "despite capital controls, which I think is the major formal barrier for companies, it is possible for them to do IPOs."
VNG noted in its prospectus that Vietnamese law prohibits foreign investors from owning more than 49% of a local company's capital operating in gaming and other sectors. Therefore, VNG resorted to a Cayman Islands holding company for its U.S. listing, and pointed out that its corporate structure "involves unique risks, has not been tested in any court and may be disallowed by Vietnamese regulatory authorities". The specific timing of the IPO remains uncertain. It has become evident to those who research potential IPO clients beforehand, however, that more businesses in Vietnam and the region are coming forward. Drew Bernstein, co-chairman of MarcumAsia, remarked that these companies are increasingly requiring more capital than the domestic market can provide. Bernstein expressed his view that the Chinese IPO sector has stagnated due to the decreased number of listings since the Didi scandal in summer 2021, and the fact that only one of the 20 China-based companies that listed in the U.S. this year exceeded $50 million in funds raised, according to Renaissance Capital. The Blueshirt Group, a financial media relations firm, also observed the trend when hosting a seminar in April with around 30 Vietnamese companies seeking information about the process to a U.S. IPO. Participants included those in tech industries such as payments, e-commerce and online games. Dvorchak commented that Vietnam's large turnout of interested companies was a noteworthy difference from the country's counterparts in the rest of Asia.
CNBC consulted close to two dozen startups situated in Vietnam or with a major presence there regarding their U.S. IPO prospects, and the majority of those who answered said any listing was still far off into the future. Nguyen Nguyen, CEO of the fintech organization Trusting Social with locations in Singapore and Vietnam, commented that in comparison to the past 10 years, there is much more capital available now for startups in Vietnam. Additionally, he highlighted that the increasing startup ecosystem has induced many of Vietnamese origin to come back to their homeland, while the domestic economic growth has grown the marketplace for local players. The World Bank reports that the annual per capita gross domestic product of Vietnam rose threefold over the 20 years between 2002 and 2022, coming to nearly $3,700. ELSA, a technology venture using AI to help people learn English, is based in the U.S. while its co-founder and CEO, Vu Van, is from Vietnam. She noted that with the success of Southeast Asian ride-hailing company Grab, more Vietnamese companies are beginning to look beyond their domestic market to operate regionally. Van indicated that for ELSA, "our goal has always been a globally-focused business with an extensive presence" and that a U.S. IPO could support them in this. According to data from Renaissance Capital, out of 103 U.S. IPOs this year, 10 were from enterprises originating in Southeast Asia, comprising of those both from Singapore and Malaysia. "It is uncommon to observe this many listings from Asian companies apart from China," the firm stated. George Chan, global IPO leader at EY, anticipates "plenty" of companies from Southeast Asia to reach the IPO stage in the next year or year and a half, and they might also see the Hong Kong exchange as a potential option.
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Bernstein suggested that the trend is not to substitute Chinese IPOs for those in the U.S., but rather to generate novel possibilities. To support this aim, MarcumAsia established offices in Beijing, Tianjin, Guangzhou, and Shanghai, with the addition of a Hong Kong location this autumn. In May 2022, they opened a Singapore office and at the present time, there are no plans to extend into other regions of Southeast Asia. Ultimately, it will be dependent upon the resurrection of global IPO markets for companies to solidify their plans. Bob McCooey, a vice chairman at Nasdaq, mentioned in a phone interview this fall that, as a consequence of market circumstances, many companies are planning to postpone their listings until the first half of 2022.
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