Capital Bets on the Vietnam Story

Compiled by Peilin

Edited by Mufeng

Over the past year, a peculiar event has unfolded in Vietnam: The country's richest man, Pham Nhat Vuong, spent $2.5 billion in his personal capacity to develop electric vehicles, resulting in automaker VinFast incurring losses of nearly $4 billion. Yet, the stock price of its parent company, Vingroup, has skyrocketed by 1,000%.

What's going on here?

On May 22, Bloomberg revealed that over the past year, Pham Nhat Vuong has invested over $2.5 billion in his electric vehicle brand, VinFast. This includes $900 million in cash injections and $1.59 billion in acquisitions of research and development assets. Since VinFast's founding in 2017, Vuong has personally invested at least approximately $4.25 billion in the company.

The issue is that the company has yet to turn a profit.

Over the past year, VinFast has incurred losses approaching $4 billion. Its previous forays into the U.S. and European markets have largely been unsuccessful. On the day the latest news broke, the U.S. state of North Carolina even sued VinFast, alleging it violated local agreements for constructing an electric vehicle factory.

Yet, on the other side, the capital markets seem utterly indifferent to these issues.

Over the past 17 months, the stock price of Vuong's Vingroup has surged nearly 1,000%. Vuong's personal net worth has soared to approximately $30 billion, making him Vietnam's richest man and the second-wealthiest individual in Southeast Asia.

Thus, an increasingly intriguing question arises: Why is the owner getting richer despite his electric vehicle company sustaining massive losses?

Because what capital is now betting on may no longer be just VinFast itself but the future of Vietnam as a whole.

And what Vuong is gambling on now extends far beyond just automobiles:

From electric vehicles to charging networks, high-speed rail, green energy, robotics... this Vietnamese businessman, who once made his fortune selling instant noodles, is now attempting to build a super industrial empire belonging to Vietnam itself.

In a sense, what Vuong is doing today increasingly resembles what Masayoshi Son did 20 years ago or Elon Musk in his early days.

The difference is: What he's betting on is the industrial upgrading of Vietnam as a whole.

Vietnam's Richest Man Goes All-In on Electric Vehicles

VinFast is burning through cash at an alarming rate.

Over the past year, the company has incurred losses approaching $4 billion. Its previous sales performance in the U.S. market has been sluggish, and its European expansion has fallen far short of expectations. Now, the U.S. state of North Carolina has even initiated legal action against VinFast, alleging it failed to honor previous agreements for constructing an electric vehicle factory.

Yet, despite this, Pham Nhat Vuong continues to invest crazy ly. Over the past year, he has injected another $2.5 billion into VinFast.

Why?

Because in Vuong's view, VinFast has never been just a car project; it represents the core lever for upgrading Vietnam's entire industrial landscape. Around VinFast, he is continuously expanding new infrastructure:

Charging network company V-Green, with plans to invest over $400 million over two years; green energy company VinEnergo; high-speed rail company VinSpeed; and even new businesses in robotics, steel, and more are beginning to emerge.

This is no longer just about building cars; it's about replicating a much larger industrial logic: using a super conglomerate to forcibly drive a country's industrial upgrading.

In fact, Pham Nhat Vuong has been dubbed the "Vietnamese Elon Musk." In 2017, he founded the electric vehicle brand VinFast. At the time, almost no one believed Vietnam could manufacture cars.

Because the automotive industry is, in essence, one of the most complex industrial systems. It requires not just capital but also supply chains, manufacturing capabilities, engineering systems, and long-term industrial accumulation. Vietnam had previously lacked any truly global automotive brands.

But Vuong was determined to proceed, even aiming from the outset to create a global electric vehicle brand.

Subsequently, VinFast built factories in Vietnam while charging into the U.S. market, later expanding into Europe, India, and Indonesia.

In 2023, VinFast went public on the Nasdaq via a SPAC merger, triggering a frenzy of market speculation. The company's market capitalization briefly surpassed that of Ford Motor Company and General Motors.

But after the peak, the market's feedback was equally real: VinFast's latest stock price has now fallen to $3.57 per share, and this state of low stock prices has persisted for over two years.

Pham Nhat Vuong: The "Vietnamese Masayoshi Son"?

Despite VinFast incurring losses of nearly $4 billion over the past year, the capital markets have gone increasingly crazy for its parent company. Over the past 17 months, the stock price of VinFast's parent company, Vingroup, has surged nearly 1,000%. As of now, the company's price-to-earnings ratio has approached 150 times.

Many analysts question: Does this valuation have any fundamental support? From a traditional financial and business logic perspective, VinFast is far from successful.

But the issue is that what the market is now betting on may not be VinFast itself at all.

Over the past few years, global capital has been searching for "new manufacturing hubs." Vietnam has exactly become one of the biggest beneficiaries.

A large number of foreign-funded factories have begun entering Vietnam, with Apple, Samsung Electronics, Intel, and Foxconn continuously expanding their production capacities. The entire country is entering a new cycle of industrialization.

And Vingroup has gradually become the most direct proxy asset for global capital to bet on Vietnam. Because it is large enough, has a comprehensive enough business portfolio, maintains deep government connections, and is sufficiently aggressive.

To some extent, Pham Nhat Vuong increasingly resembles Masayoshi Son in his early days. Both men like to make massive bets on the future, expand crazy ly, heavily invest in long-term industrial trends, use capital to drive industrial upgrading, and even face similar external skepticism.

Some view them as geniuses; others believe they are merely inflating bubbles ever larger.

And now, the truly dangerous and most crazy aspect of Pham Nhat Vuong's approach lies in this: He's not just betting on VinFast but on whether Vietnam can truly complete its industrial leap.

If successful, VinFast could become the first truly global industrial brand in Vietnam's history. But if it fails, this grand gamble may leave behind the most expensive industrial experiment in Southeast Asia's history.

The Rags-to-Riches Story of Vietnam's Richest Man

The spirit of grand gambling evident in Pham Nhat Vuong today did not emerge suddenly.

It's hard to imagine that the first Bucket gold (first pot of gold) in the life of Vietnamese national Pham Nhat Vuong was earned against the backdrop of monumental changes in Eastern Europe.

Born in 1968 in Hanoi, Vietnam, Vuong's father served in the Vietnamese military's air defense forces, while his mother ran a small teahouse. The family was not wealthy.

In 1987, he enrolled in Hanoi University of Mining and Geology and later received a scholarship based on his mathematics grade (grades) to study at the Moscow State Geological Prospecting Academy in the Soviet Union.

The subsequent collapse of the Soviet Union completely transformed his destiny.

In the early 1990s, the Eastern European economy descended into chaos, and large numbers of ordinary people began searching for cheap, convenient, and quickly satisfying food. Pham Nhat Vuong quickly realized that instant noodles would present an opportunity.

Thus, he and his wife moved to Kharkiv, Ukraine, and began selling instant noodles with borrowed money. Later, he founded the company Technocom and launched the "Mivina" instant noodle brand, which became an instant hit.

In that era of post-Soviet economic turmoil, Mivina became one of Ukraine's best-selling instant noodle brands. By 2009, Pham Nhat Vuong sold the company to Nestlé for $150 million, completing his first leap in wealth.

Subsequently, he returned to Vietnam. He realized that an even greater opportunity was emerging: Vietnam was entering a phase of rapid economic growth.

After returning, he initially ventured into real estate. In 2003, he developed the Vinpearl Resort in Nha Trang; in 2004, he constructed the Vincom City Towers in Hanoi. Subsequently, real estate, hotels, commercial complexes, hospitals, and schools continued to expand.

Eventually, these businesses were consolidated into Vingroup.

Many Vietnamese later said: To see Vietnam's economic rise, one need only look at Vingroup, as this conglomerate virtually covers the entire lifestyle system of Vietnam's middle class:

Houses are developed by Vingroup; shopping malls are operated by Vingroup; resort hotels are managed by Vingroup; even the schools children attend and the hospitals where they receive medical care may belong to Vingroup.

And Pham Nhat Vuong gradually became one of the most iconic figures in Vietnam's business world.

References:

"Tycoon Pours Billions Into EVs as Shares Surge 1000%," Bloomberg;

"Pham Nhat Vuong Profile," Forbes;

"Phạm Nhật Vượng," Wikipedia.

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