VinFast Auto Ltd. (NASDAQ: VFS)

Sector: Consumer Cyclical Industry: Auto Manufacturers CIK: 0001913510
Market Cap 7.89 Bn
P/B -1.38
P/E -2.35
P/S 3.07
ROIC (Qtr) 2.87 Mn
Div Yield % 0.00
Rev 1y % (Qtr) 37.17
Total Debt (Qtr) 4.23 Bn
Debt/Equity (Qtr) -0.74

About

VinFast Auto Ltd., or simply VinFast, is a prominent player in the electric vehicle (EV) industry, headquartered in Singapore and listed on the stock market with the symbol VFS. The company's operations span the design, manufacturing, and sale of premium EVs, e-scooters, and e-buses. VinFast's main business activities also include the development of its own battery technology. The company's product offerings are diverse and cater to various segments of the market. VinFast's primary products include a range of fully-electric SUVs, such as the VF...

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Price action

Investment thesis

Bull case

  • Operating cash flow of (693.05M) provides exceptional 141.62x coverage of minority interest expenses (4.89M), showing strong core operations.
  • Tangible assets of 6.90B provide exceptional 58.99x coverage of deferred revenue 116.94M, showing strong service capability backing.
  • Strong free cash flow of (1.91B) provides 25.13x coverage of acquisition spending (76.08M), indicating disciplined M&A strategy.
  • Free cash flow of (1.91B) provides robust 159.19x coverage of R&D expenses (12.01M), enabling sustainable innovation investment.
  • Retained earnings of (12.49B) represent substantial 2.18x of equity (5.72B), indicating strong internal capital generation.

Bear case

  • Operating cash flow of (693.05M) barely covers its investment activities of (1.38B), with a coverage ratio of 0.50, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 359.55M against inventory of 1.43B, the 0.25 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 359.55M provide limited coverage of acquisition spending of (76.08M), which is -4.73x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (693.05M) provides insufficient coverage of deferred revenue obligations of 116.94M, which is -5.93x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (693.05M) shows concerning coverage of stock compensation expenses of 5.18M, with a -133.68 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Auto Manufacturers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TSLA Tesla, Inc. 1,386.72 Bn 263.09 14.50 7.70 Bn
2 TM Toyota Motor Corp/ 286.80 Bn 9.26 0.87 287.20 Bn
3 GM General Motors Co 81.08 Bn 25.50 0.44 130.28 Bn
4 RACE Ferrari N.V. 59.53 Bn 31.60 7.15 3.38 Bn
5 F Ford Motor Co 55.12 Bn 17.49 0.30 161.94 Bn
6 HMC Honda Motor Co Ltd 42.13 Bn 9.65 0.29 88.09 Bn
7 STLA Stellantis N.V. 29.73 Bn -10.57 0.17 -
8 XPEV Xpeng Inc. 17.74 Bn -44.29 1.79 4.87 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.05 1.20
EV to Cash from Ops. EV/CFO -0.51 5.88
EV to Debt EV to Debt 0.08 28.94
EV to EBIT EV/EBIT -0.14 11.38
EV to EBITDA EV/EBITDA -0.20 7.73
EV to Free Cash Flow [EV/FCF] EV/FCF -0.19 8.79
EV to Market Cap EV to Market Cap 0.05 304,683.06
EV to Revenue EV/Rev 0.14 16.98
Price to Book Value [P/B] P/B -1.38 3.04
Price to Earnings [P/E] P/E -2.35 9.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.59
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 6.04
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Int. cover (Qtr) -2.83 8.74
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1,264.17 -59.34
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 298.92 62.23
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.34
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 8.82 -1,057.18
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 26.74 -19.82
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.76 -1,011.94
EBT Growth (1y) % EBT 1y % (Qtr) 1.15 -216.80
EPS Growth (1y) % EPS 1y % (Qtr) 0.53 -59.11
FCF Growth (1y) % FCF 1y % (Qtr) -798.96 -21.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -85.28 -10.92
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.05 0.40
Current Ratio Curr Ratio (Qtr) 0.50 1.21
Debt to Equity Ratio Debt/Equity (Qtr) -0.74 0.99
Interest Cover Ratio Int Coverage (Qtr) -2.83 8.74
Times Interest Earned Times Interest Earned (Qtr) -2.83 8.74
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -75.80 -2,589.89
EBIT Margin % EBIT Margin % (Qtr) -2,534,496.07 -104,371.67
EBT Margin % EBT Margin % (Qtr) -129.87 -3,156.67
Gross Margin % Gross Margin % (Qtr) -58.60 -649.09
Net Profit Margin % Net Margin % (Qtr) -130.50 -3,158.82