Why Tesla's Vietnamese Rival VinFast Stock Is Gaining Today?

VinFast Auto Ltd. VFS reported Q3 revenues of $342.66 million, representing an increase of 159.3% Y/Y and an increase of 3.8% from Q2.

The Vietnamese automaker's EV deliveries were 10,027 in Q3, representing an increase of approximately 5.2% from Q2. The company started to see a sales increase in September in North America, particularly in Canada. VinFast delivered 153 EVs in the same quarter a year ago.

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E-scooter deliveries were 28,220 in Q3, representing an increase of 112.9% from the third quarter of 2022.

Vehicle sales were $319.5 million in Q3, representing an increase of 185.2% Y/Y, thanks to a significant increase in EV and e-scooter sales volume in Vietnam.

The company said gross margin was negative (29.9%) compared to negative (108.2%) in the third quarter of 2022. 

The margin improvement on a Y/Y basis was due to a strong increase in sales volume and a decrease in charges to write down the carrying value of inventories.

The company reported a net loss per ordinary share of $(0.27) in Q3.

As of September 30, 2023, the company had 126 showrooms globally for EVs and 247 showrooms and service workshops for e-scooters, including VinFast showrooms and dealer showrooms.

The company exited the quarter with cash and equivalents worth $131.0 million.

"The successes achieved in the past two quarters are just the first stepping stone. We have come up with a concrete action plan to deliver on each growth milestone and to accelerate our global expansion," said Madam Thuy Le, Global Chief Executive Officer of VinFast.

Outlook

VinFast affirms its FY2023 delivery target of between 40,000 and 50,000 vehicles.

VinFast expects a saving of $400 million in capital expenditures planned for global manufacturing between 2024 and 2025, which is expected to be used for CKD factories in Indonesia and India. 

Overall, VinFast expects a net decrease in total capital expenditures for global manufacturing between 2024 and 2025.

The company is on track to commence delivery of the VF 6 in Vietnam in the fourth quarter and deliveries of the VF 7 and VF 3 in 2024.

Expanding its North American charging network, VinFast revealed plans to add new charging operators in California and Washington to its network and is in discussions on potential NACS adoption.

VinFast expects to receive up to $1.2 billion or more in grants from Vingroup, Chairman Pham Nhat Vuong, and two key shareholders in the next six months.

Price Action: VFS shares are trading higher by 5.54% to $8.50 premarket on the last check Thursday.