The Vietnamese electric-vehicle start-up VinFast Auto still has no analyst ratings, but one analyst has offered some thoughts about the company. He doesn't like what he is seeing.
Third Bridge analyst David Byrne spoke to several of his industry contacts to get a sense of how VinFast (ticker: VFS) is doing in the U.S. He doesn't have a rating on the stock; the company is a research business serving private-equity firms, credit investors, hedge funds, and others. It relies on a network of experts.
"VinFast bungled the launch of the VF8 in the US....had to be recalled," said Byrne, referring to the company's midsize sport-utility vehicle. "Based on available public data, they have over 1,500 units in inventory in the U.S., approximately 750 of which have been in inventory for over 6 months."
VinFast sold about 850 of the VF8 in the U.S. in the first half of the year. The cars were recalled in May to fix a software issue with the display.
The company is also offering the VF9 SUV, which costs more than $80,000. That is a lot considering a Tesla $(TSLA)$ Model X now starts at just under $80,000. Bryne used the word "illogical" to describe the pricing decision.
In addition to the VF8 and VF9, VinFast is selling a couple of other EV models and still offers some gasoline-powered models overseas. "Running 8 models concurrently is stretching the company beyond its expertise and ability," he said.
"Cash commitments VinFast received from Vingroup of approximately $2 billion will last the company approximately 12 months at the current rate of burn," added Bryne.
VinFast merged with a special purpose acquisition company in August, bringing in about $150 million to its balance sheet. The company has said more capital will be needed to build its business.
None of Bryne's comments are positive. The company didn't immediately respond to a request for comment about his notes.
There are still no traditional Wall Street ratings on VinFast stock. It takes a while for analysts to ramp up coverage after SPAC mergers. Lucid $(LCID)$ picked up its first rating a couple of months after closing its merger in 2021.
Until ratings start appearing, investors will have to rely on VinFast's financial filings and comments from analysts such as Bryne.
Trading in VinFast stock has calmed down in recent days. Shares went from roughly $10 apiece to $93 in the days after the SPAC merger was completed. They were poised to open on Thursday at about $17.
At $93, VinFast stock is worth some $210 billion. At $17, VinFast stock is worth some $40 billion, meaning it remains one of the most valuable auto makers on the planet. Ford Motor $(F)$ has a market capitalization of about $50 billion.
But Ford sells millions of cars a year. VinFast sold about 11,000 in the first six months of 2023.
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