Vietnam’s VNG’s valuation slashed to $364m

Vietnam’s VNG’s valuation slashed to $364m
Vietnam’s VNG’s valuation slashed to $364m

At a reference price of 240,000 dong (US$10.15) apiece, VNG will list 35.8 million shares

Once reportedly valued at US$2.2 billion, Vietnam’s first tech unicorn VNG is expected to list locally on 05 January at a valuation of about US$364 million.

On the Unlisted Public Company Market (UPCoM), which is the board for firms, the company’s shares will be listed, not yet listed on the Hanoi Stock Exchange.

At a reference price of 240,000 dong (US$10.15) apiece, VNG will list 35.8 million shares. It will have the ticker symbol VNZ.

This is an unexpected development for the firm, which for years has been reportedly eyeing a listing in the US. The company signed a memorandum of understanding with Nasdaq in 2017.

Following Grab’s US IPO in December 2021, it was explained why Vietnamese companies have been struggling to go public both onshore and offshore. Part of the reasons has to do regulations.

In certain sectors in Vietnam, foreign shareholders are barred from owning more than 50% of the company. Even for an offshore listing, the listed entity must be approved by the State Securities Commission (SSC).

The SSC requirement, however, can be circumvented if a non-Vietnamese entity is listed. Most recently, electric vehicle maker VinFast has filed to list in the US with its entity incorporated in Singapore.

Given the global economic downturn, it’s unclear whether VNG would pursue its overseas IPO ambition down the road. It’s worth noting that VNG Limited, an entity registered in Cayman Islands, currently holds 49% ownership of the Vietnamese unicorn.

Originally known as VinaGame, VNG, founded in 2004 has built a digital services empire that spans social media (Zalo), online media (Zing News), music streaming (Zing MP3), ecommerce (over 22% ownership interest in Tiki), financial services (ZaloPay) and cloud services (VNG Cloud).

However, to expand globally, VNG has trained its sights mostly on the domestic market despite increased efforts. In recent years, it has racked up significant losses in ZaloPay and Tiki.

Also readTechnology leaders must consider regulatory compliance when implementing digital technologies

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