Over the past few months, a new player has emerged in the EV space: VinFast (NASDAQ:VFS). Established in 2017 by Vingroup, a prominent Vietnamese conglomerate with a strong emphasis on tech and industrial capabilities, VinFast is a multinational automotive firm headquartered in Vietnam.
The company aims to introduce both affordable and high-end electric vehicles to the global market and accelerate the transition to EVs by providing customers with the finest products and experience.
Wedbush’s Daniel Ives, a 5-star analyst rated in the top 2% of the Street’s stock pros, believes that the company is making inroads towards meeting those goals.
“Through advanced manufacturing capabilities across its industrial supplier park, we believe VinFast is well-positioned to generate a durable product portfolio for electric transportation globally while creating a strong ecosystem to generate profitable growth over the coming years,” Ives opined. “We have seen the impressive VinFast operations in Vietnam firsthand and came away extremely impressed with its EV footprint.”
While the company concentrates on establishing itself as a key player in the Vietnamese EV sector, VinFast is also strategically expanding its global manufacturing presence by making substantial investments in relatively untapped EV markets. One notable example is the US, where earlier this year the company broke ground on its EV factory in North Carolina, a facility where VinFast intends to have the capacity to produce 150,000 vehicles annually once completed by mid-2025.
That is just one facet of its global expansion strategy. The company plans to construct another facility in the Asia-Pacific region, as part of its broader plan to enter seven new countries in this area within the next year. Additionally, VinFast is targeting 50 new markets by the end of 2024, an ambitious initiative fueled by an anticipated $1.25 billion cash infusion directly from VinGroup Founder and Chairman Pham Nhat Vuong.
That said, there is a bear angle to consider. The EV industry has seen numerous startups enter the market amid considerable hype with many of these ventures grappling with unsustainable business models which “never got off the ground.”
However, that is not a fate Ives foresees VinFast succumbing to. “We have been to auto factories around the world and what Vinfast has built in Vietnam is unique and one of the most impressive facilities I have seen with a scale and EV technology that is foundational to our bull thesis,” he summed up. “We believe the Vinfast EV vehicles are the result of years of R&D, massive engineering resources, complex supply chain relationships, and are now set for primetime.”
Conveying his confidence, Ives initiated coverage of VFS stock with an Outperform (i.e., Buy) rating and $12 price target, suggesting shares will post growth of a robust 87% over the next year. (To watch Ives’ track record, click here)
Only one other analyst has been keeping a tab on VFS’ prospects, but they also take a positive stance, making the consensus view here a Moderate Buy. The average price target is $9.5 and implies ~48% upside from current levels. (See VinFast stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
