HANOI, May 13 (Reuters) - Shares of Vinpearl, the hospitality arm of conglomerate Vingroup, jumped 20% on Tuesday after the Vietnamese firm launched an equity issue to bolster its capital reserves amid heavy investment in its automotive unit, VinFast.
Shares soared 20% to 85,500 dong apiece after opening at 71,300 dong, implying a market value of 53.3 trillion dong ($2.06 billion) for Vinpearl.
"The listing offers Vingroup an alternative path to raise funds and diversify assets, supporting its focus on VinFast by capitalizing on Vinpearl's stable cash flow and solid fundamentals," said Nguyen The Minh, head of research at Yuanta Securities Vietnam.
Since its launch in 2017 through last November, VinFast has received about $17 billion in capital from Vingroup, its affiliates, and founder Pham Nhat Vuong, who also chairs the group.
Financial pressures have mounted, with VinFast posting a $3.2 billion loss in 2024, widening from $2.4 billion in 2023, driven by rising costs tied to global expansion and promotions.
According to Minh, the listing signals a turning point after years of limited premium offerings in Vietnam's market, potentially serving as a catalyst to attract foreign investors.
Despite demand for 1.45 million shares, only 4,800 changed hands initially, though analysts expect trading to pick up after settlement.
Parent company Vingroup retains 85.5% of the shares, leaving a free float of 14.5%, according to the term sheet.
"Current market capitalization is not very indicative since Vingroup remains the primary shareholder. However, the floating rate is expected to increase when shares are sold to strategic investors," said Minh, noting that the floating rate was similarly low when Vinhomes and Vincom Retail - two units of Vingroup - made their debut years ago.
Vinpearl, which operates 31 hotels and resorts across Vietnam, was first listed in 2008 but delisted in 2011 following a merger with Vincom.
The stock exchange allows shares to move a maximum of 20% from their listing price on the first day of trading. Prices can fluctuate up to 7% thereafter.
($1 = 25,920.0000 dong)
(Reporting by Phuong Nguyen; Editing by Sherry Jacob-Phillips)
((Phuong.Nguyen@thomsonreuters.com; +84-24-3852-9623;))