VinFast (VFS) experienced further upward momentum on Monday following its highly successful initial public offering on August 15th, coupled with periods of instability in the preceding week. The stock of VinFast reached its highest point after going public.
In additional electric vehicle (EV) industry news on Monday, BYD (BYDFF) reported nearly record-breaking profits for the second quarter. The prominent EV company also unveiled a partnership agreement with Jabil (JBL). Xpeng (XPEV) also made an announcement about its collaboration with the ride-hailing giant Didi Global (DIDI). As a result of these developments, Jabil's stock experienced a surge on Monday, and the stocks of BYD, XPeng, and Didi all saw gains.
VinFast, as well as BYD and XPeng, are capitalizing on the burgeoning electric vehicle market in Asia.
However, as China's economy faces challenges, reports indicate that international investors are withdrawing from the country. Many are expected to remain cautious until they witness another round of substantial government stimulus, similar to what was observed in 2008.
VinFast's Stock Achieves Post-IPO Peak
The electric vehicle startup VinFast entered the public market on August 15th through a blank-check merger arrangement, also known as a special purpose acquisition company (SPAC) merger.
The majority ownership of the startup rests with the Vietnamese conglomerate Vingroup.
As of June 30th, VinFast reports that it has delivered 19,000 electric vehicles, encompassing four different models. Its manufacturing operations include a facility in North Carolina.
In the U.S. market, VinFast presently offers the VF8 electric sedan and VF9 electric SUV. The VF9, a seven-seater, starts at $83,000 and boasts a range of approximately 300 miles. The VF6 and VF7 SUV models are set to be released soon.
VinFast's stock experienced a substantial surge on its debut on August 15th. The stock began trading at $22 on that day and concluded at $37.06.
Despite episodes of volatility, the newly introduced stock witnessed a remarkable increase of over 346% during the previous week. Trading was briefly halted on August 18th, 22nd, and 23rd due to market volatility.
On Monday, VinFast's stock soared by nearly 20%, reaching $82.35 during the trading session and hitting an intraday high of 93.
As a result, the EV startup, which has not yet recorded a profit, now possesses a market capitalization of roughly $191 billion. This valuation surpasses the combined market capitalization of both Ford (F) and General Motors (GM), each of which is approximately $48 billion.
Investors considering investing in VinFast stock are advised to exercise patience and wait for the formation of an IPO base. EV stocks from nascent companies are often characterized by high volatility and occasionally fail to meet initial expectations.
EV Industry Stocks: BYD Earnings and Jabil's Surge
On Monday, Chinese EV and battery behemoth BYD reported a net profit of 6.824 billion yuan ($936 million) for the second quarter. This marked a 145% year-over-year increase and a 65% rise from the first quarter. The figure was reportedly the second-highest on record, following last year's fourth quarter.
During the quarter, BYD achieved revenue of RMB 139.95 ($19.2 billion), representing a 67% surge compared to the previous year and a 16.5% increase from the first quarter. BYD had already signaled impressive profits for the second quarter.
BYD successfully sold a record-breaking 703,561 electric vehicles, including hybrid models, in the second quarter.
Additionally, on Monday, BYD announced that its electronics division would acquire the electronics unit of Jabil, based in Florida, for 15.8 billion yuan ($2.2 billion) in China.
As a result of these developments, BYD's stock, traded over the counter, climbed by 2.2% to reach 29.45 on Monday. JBL's stock surged by 8.9%, reaching above 112 and approaching a 52-week high.
XPeng's Collaboration With Didi, China's Equivalent of Uber
Late on Sunday, the Chinese EV startup XPeng unveiled a strategic partnership with the Chinese ride-hailing giant Didi Chuxing.
The substantial $744 million deal encompasses the acquisition of Didi's smart car unit.
This agreement will result in Didi becoming a strategic shareholder in XPeng, which has plans to introduce a new EV brand in 2024 based on this collaboration. The project is currently under development under the name "Mona."
In 2016, Apple invested $1 billion in Didi Chuxing, often referred to as China's equivalent of Uber (UBER). This investment marked one of Apple's largest-ever strategic investments at that time.
Following the pandemic and China's regulatory actions concerning the technology and internet sectors, Didi encountered difficulties in reclaiming its position in 2022. During these challenges, an Apple executive quietly resigned from Didi's board in August of the previous year.
XPeng's stock experienced an increase of over 5% on Monday, while Didi's stock, also traded over the counter, rose by more than 3%.
Nio (NIO), a rival EV startup to XPeng, observed an uptick of nearly 2%, with earnings scheduled for release on Tuesday.
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