Vietnamese companies eye the U.S. IPO market amid a lull in Chinese listings

cnbc.com:

BEIJING — A new group of Asia-based companies are contemplating initial public offerings in the U.S., where international listings were once driven mostly by Chinese startups.

Vietnam-based electric car company VinFast broke new ground with its U.S. listing in August, via its merger with the U.S.-listed special purpose acquisition company Black Spade Acquisition.

While not strictly an IPO, the listing was soon followed by Vietnamese tech unicorn VNG's filing to list on the Nasdaq. VNG's products include gaming, fintech and music streaming.

«Something like VinFast puts the [country] on the map,» said Johan Annell, Beijing-based partner at ARC Group.

It sends a message that «despite capital controls, which I think is the major formal barrier for companies, it is possible for them to do IPOs,» he said.

VNG noted in its prospectus that Vietnamese law prevents «foreign investors» from owning more than 49% of the capital used to establish a local company operating in gaming and certain other sectors. As a result, VNG is part of a reorganization which uses a Cayman Islands holding company to list in the U.S., the filing said.

«Our corporate structure involves unique risks, has not been tested in any court and may be disallowed by Vietnamese regulatory authorities,» the filing said.

It's unclear when VNG will go public. But firms that scour for potential IPO clients years in advance say they are talking to more companies in Vietnam and the surrounding region.

As local companies grow, «they are outgrowing the ability of those markets to provide the capital that they need,» said Drew Bernstein, co-chairman of accounting firm MarcumAsia. «It's still the very early stages of the game.»

Bernstein said he attended investing