Where will VinFast Auto stock be in 10 years?

If you think the world doesn’t need another electric vehicle (EV) manufacturer, you’re definitely not alone in that opinion. But the world is a big place, and there may be a place for a Vietnam-based EV manufacturer. Vinfast Auto (VFS -4.59%) It will grow over the next 10 years.

Of course, there’s no crystal ball that can tell investors whether VinFast’s market capitalization will expand by 2034, or whether the company will even exist by then. However, if you have a speculative side to your nature and can forgive certain financial shortcomings, VinFast stock could have a small place in your long-term portfolio.

VinFast gets “wild” with concept vehicle

To survive in an increasingly crowded global electric vehicle market, new startups must stand out. At least that seems to be the core concept behind VinFast’s latest vehicle model launch.

VinFast hopes to enter the U.S. EV market and “expects to reach approximately 130 sales points in (North America) by the end of this year.” Meanwhile, the company launched more than four new SUV models last year. vietnam.

Clearly, VinFast is very active and ambitious despite evidence that sales growth is slowing in the global EV market. Against this evidence (or perhaps to counter the slowing growth of the market), VinFast has launched several eye-catching vehicle models.

One of them is the VF Wild midsize electric pickup truck, which features a flexible bed size that can be adjusted from 5 to 8 feet. This is VinFast’s main selling point, along with the car’s sleek, curved exterior, but the car is also equipped with a “panoramic glass roof and digital side mirrors to improve aerodynamics.”

Also “wild” in its own right, VinFast’s VF 3 mini SUV is, for lack of a better description, charmingly cute. The VF 3 may be small, but it seats four and has a range of over 125 miles on a full charge. And it’s easy to imagine the VF 3 fitting into parking spaces that can’t accommodate some larger EVs.

VinFast’s unusual vehicle products are not limited to cars. Not long ago, the company launched the DrgnFly e-bike, which boasts what the company calls “a V-shaped, elongated frame that conjures images of a flying dragon.” The DrgnFly also offers a range of up to 63 miles, so open-minded e-bikers certainly won’t need to charge it too often.

Charging due to increased sales

If any of these concept vehicles become popular, VinFast’s sales could grow exponentially over the next decade. Although it may not seem to be reflected in the stock price, the company is already showing remarkable sales growth.

In fact, based on the gap between VinFast’s stock price and the company’s revenue trajectory, there may be an attractive buying opportunity here. In the fourth quarter of 2023, VinFast’s revenue increased 133% year over year to $437 million. For the year, the company’s revenue rose 91% to $1.2 billion.

VinFast’s Q4 2023 gross margin of minus 40.1% and full-year gross margin of minus 46% will certainly be unpleasant for some potential investors. However, these results represent a solid improvement compared to the company’s fourth quarter 2022 and fiscal 2022 gross margins of negative 82.6% and negative 82%, respectively. Additionally, VinFast will spend $213 million in the fourth quarter of 2023 to advance the company’s VF 6 and VF 7 SUV models, making VinFast’s North Carolina based production This includes the development of factories, showrooms and charging stations.

VinFast, like almost every other new EV manufacturer, could cease to exist within 10 years and the company’s stock price could be zero. That’s why I think it’s important to maintain a small position size in VinFast stock.

There is potential for VinFast to capture multinational markets with its unique, concept-driven new energy vehicles. Clearly, even VinFast’s “wildest” EV is fully featured and has a decent range.

Plus, they look pretty cool and will grab the attention of drivers who crave them. So if VinFast can capitalize on the “wow” factor of eye-catching EVs and continue to close the margin gap, there could be a multibagger here.