Vietnamese Companies Set Sights on U.S. IPO Market Amid Shift from Chinese Listings

Vietnamese companies are increasingly eyeing the U.S. market for their public offerings in a significant shift within the international IPO landscape. This trend departs from the previously China-dominated Asian presence in U.S. listings. Pioneering this move, VinFast, a Vietnamese electric car company, made headlines with its U.S. listing through a merger with Black Spade Acquisition. This was closely followed by tech unicorn VNG, known for its diverse gaming, fintech, and music streaming portfolio, filing for a Nasdaq listing.

Johan Annell, a Beijing-based partner at ARC Group, highlighted the significance of this trend, stating, “Something like VinFast puts the [country] on the map.” He emphasized its message about overcoming capital controls to achieve IPO success. VinFast’s groundbreaking listing has paved the way for other Vietnamese companies, such as VNG, which has employed an innovative corporate structure involving a Cayman Islands holding company to navigate foreign investment restrictions.

Despite the enthusiasm, challenges remain. VNG’s prospectus candidly acknowledges the untested nature of its corporate structure and the potential for disapproval by Vietnamese regulators. Yet, the interest in U.S. IPOs from Vietnamese companies is undeniable. Drew Bernstein, co-chairman of MarcumAsia, notes a growing engagement from Vietnamese firms seeking capital, indicative of their expanding ambitions.

The trend coincides with a slowdown in Chinese listings in the U.S. following regulatory hurdles and the Didi fallout in 2021. This has shifted the focus to other Asian markets, with Vietnam emerging as a significant player. Gary Dvorchak, managing director of The Blueshirt Group, observed a surge in interest from Vietnamese tech companies, contrasting sharply with other Southeast Asian nations.

Vietnam’s burgeoning startup ecosystem underpins this trend. Nguyen Nguyen, CEO of Trusting Social, points to the dramatic increase in capital for Vietnamese startups and the attraction of overseas Vietnamese talent to the local market. Vietnam’s impressive economic growth has also expanded market opportunities for domestic companies.

Vu Van, co-founder and CEO of ELSA, further emphasizes the global aspirations of Vietnamese startups, citing the success of Southeast Asian companies like Grab as a motivator for considering U.S. IPOs. Renaissance Capital data reveals that while Southeast Asian companies are making their mark in U.S. IPOs, their size remains modest compared to previous Asian listings.

George Chan of EY predicts a surge in IPOs from Southeast Asia in the coming months, with Hong Kong also being a potential market. Bob McCooey of Nasdaq echoes this sentiment, noting a robust pipeline of Southeast Asian companies evaluating U.S. markets, though many are postponing their plans due to current market conditions.

The burgeoning interest of Vietnamese companies in U.S. IPOs marks a new chapter in the global IPO narrative. While this trend doesn’t replace Chinese IPOs, it opens fresh avenues for Southeast Asian firms to access capital and international markets. The successful foray of companies like VinFast and VNG into the U.S. stock market could inspire more Vietnamese firms to follow suit. However, the full realization of this potential hinges on the recovery of global IPO markets and the innovative navigation of regulatory landscapes by these emerging Asian powerhouses.