Good day, and welcome to the VinFast Auto Ltd. Q3 2023 Earnings Call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. As a reminder, this call is being recorded. I would now like to turn the call over to Carol Wynn, Head of Investor Relations. You may begin. Good morning. Before I turn it over to Thủy, let me remind you that some of the statements on this call include forward-looking statements under federal securities laws. These include, without limitation, statements regarding the future financial performance of the company, delivery volumes, financial and operating outlook and guidance, macroeconomic and industry trends, company initiatives, and other future events. These statements are based on the predictions and expectations as of today, and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC. In addition, management will make reference to non-GAAP financial measures during this call. A discussion on why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our current earnings press release issued earlier this morning, as well as in the investor deck. With that, I'd like to turn it over to Madam Thủy. Thank you, Carol. Welcome, everyone, to VinFast's Third Quarter 2023 Earnings Call. Thank you for joining us. Firstly, I would like to talk about the strategic priorities. We are excited to update you on our accomplishments over the last quarter, but first, I want to reiterate our unwavering focus on our strategic priorities to strengthen and grow the business, which are largely in line with those shared recently for Q3. Priority number one is global growth. We continue to be pleased with the response and interest our vehicles have received across our global markets, especially among consumers in North America. We remain focused on shipping the VF 9 to North America by the end of the year, as well as targeting for delivery of the new VF 6 later this year in Vietnam, and the VF 7 and VF 3 in 2024. Priority number two is the expansion of our global footprint. We are continuing to build out our production facility in North Carolina, and the facility will best position us to serve the North American market. We are progressing in our evaluation of up to 50 global and other markets in the future. We have identified as having high potential for us to engage quality distributors to import and distribute VinFast cars. I will say more about two markets in particular in a moment. Priority number three is our continued focus on building automotive technology through our in-house R&D and external partnerships, making our vehicles smarter and more reliable for our customers. Next, I would like to discuss the key milestones achieved in Q3. A few highlights for our third quarter. In September, VinFast officially introduced a B-segment EV model, the VF 6, in Vietnam. The affordable VF 6 is designed for families by Torino Design, equipped with a wide range of smart features and ADAS level two capabilities. The model is offered in two trims, Base and Plus, with an expected WLTP driving range of 248 miles and 237 miles respectively, and a charge time of less than 25 minutes. VinFast will start taking reservations for the VF 6 in Vietnam later this month. We are pleased that the new model has already attracted significant interest with meaningful interactions on Facebook and TikTok. We are also making strides in global expansion. As we unveiled recently for Q2, VinFast is establishing broad distribution channels, leveraging local networks and the expertise of third-party dealerships and distributions to increase coverage in our growing list of target markets. We aim for our vehicles to be present in up to 50 markets and countries globally by the end of 2024. In the US specifically, this approach will provide increased consumer access in substantially more states as compared to a pure direct-to-consumer model. In fact, we have signed twenty-seven letters of intent with well-known dealership groups, covering more than 100 open dealership points across the US, including, but not limited to Florida, Texas, North Carolina, Virginia, Louisiana, New Jersey, and so on. Leveraging local distributors in many of our key markets makes for a capitalized expansion model that will allow VinFast to be more efficient about cost and use of capital. We recently announced plans to commence delivering our EVs in Indonesia by 2024, identifying the country as a key market for the establishment of manufacturing facilities for our EVs and batteries. In addition to Indonesia, we have identified India as another market where we intend to build a facility to begin production in 2026. Each facility has a planned total capacity of up to 50,000 cars a year in phase one, and an estimated total CapEx of $150 million-$200 million. We expect to participate in the tremendous potential brought by the increased EV adoption in both Indonesia and India, where EV penetration is currently still very low. We look forward to keeping you updated on the international expansion of our manufacturing facility, which will complement our existing facility in Hai Phong and our factory in North Carolina once production is commenced. Also in Q3, we have received $965 million in loans from Vingroup, and $291 million in grants from our partners, as well as $240 million from our SPAC merger transaction and the strategic investment from Gojek. We continue our expansion, adding over 10,000 new third-party charging points in North America and gaining access to about 500,000 charging points through Bosch network in preparation for vehicle delivery in the EU later this year. And we are concluding discussions with other key charging partners as well globally. We continue to expand our global footprint. By the end of Q3, VinFast had 247 showrooms and workshops with scooters, and 126 showrooms globally for EVs, after opening three in Berlin, Munich, and Hamburg this past quarter. Finally, looking forward, we remain focused on executing against our strategic priorities to strengthen and grow the business. We will continue to expand our global footprint with manufacturing facilities in key markets such as Indonesia and India, where we expect high EV demand growth. We will build, build, and develop our business model as we expand our distribution network and enter new markets through third-party dealership and distribution. In addition, we are making a significant effort to reduce our CapEx. We estimate our CapEx spending for global manufacturing to decrease by about $400 million in 2024 and 2025. This optimization of our manufacturing CapEx will allow us to expand into Indonesia and India while maintaining our overall spend lower than our prior estimates. And finally, we continue to maintain and promote our best-in-class aftersales policy in the market as we expand our global market. I would like now to hand over to David, who will discuss our financial performance for the quarter. David? Thank you, Madam Thủy. Hello, everyone, again. Firstly, let me take you through the third quarter results and the numbers. We delivered 10,027 EV and 28,220 e-scooters for the quarter. The VF e 34 and recently launched VF 5 were the main drivers in Q3, and a significant increase in e-scooters was largely due to B2B sales here in Vietnam. We recorded revenue of $343 million, representing an increase of 160% from the third quarter of 2022, and an increase of 4% from the second quarter of 2023. Total revenues are primarily comprised of revenue from EV sales, including an encouraging uptick in Canada just this last month. Gross margin improved 4% quarter-over-quarter due to lower sales to VinFirst customers who were eligible for incentives, and also better economies of scale resulting from an increase in sales of e-scooters. Operating expenses declined quarter-over-quarter by 7%. This was mainly attributed to the decrease in R&D costs paid to external suppliers and other costs related to our R&D activities for EVs, as we brought three EV models into commercial production in the last four quarters. While SG&A increased by 43% year-over-year, it remained flat quarter-over-quarter. CapEx significantly declined by 47% in Q3 compared to Q2, and by 40% compared to the year prior, as we reduced our spending on tools and equipment for new vehicle programs and front-loaded factory purchases in connection with battery leasing. Let me give you some guidance now on the coming quarter. So moving to our outlook for the final quarter of this year, we are reaffirming our target of 40,000-50,000 vehicle deliveries for this year, 2023. We expect about $400 million in savings in global manufacturing CapEx between 2024 and 2025, which will be redirected to manufacturing expansion, as outlined earlier by [inaudible]. We also remain on track to ship VF 9 to North America and deliver the VF 6 in Vietnam by the end of this year. We are very excited for the delivery on VF 7 and VF 3, beginning in 2024. We will continue to look for opportunity to strengthen our balance sheet on top of the proceeds already received from the SPAC merger, the Gojek strategic investment, and funding support from Chairman and Vingroup. With that, I'll hand it back to you, Madam Thủy, for closing remarks and then Speaker to open our Q&A session. ... thank you. In conclusion, VinFast has made a considerable advancement this quarter, and is committed to establishing and expanding its presence in key markets and maintaining its strong positioning as we advance the company's mission of creating a greener future for everyone. Thank you. Back to the operator. Thank you. If you'd like to ask a question, please press star one one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Brian Dobson with Chardan Capital Markets. Your line is open. Hi, thanks so much for taking my question. Good to speak with you this morning. Can you hear me all right? Yes, we can. Okay, excellent. So just a quick question on your 2023 delivery target of 40,000-50,000 vehicles. Could you perhaps break up the composition of that target in terms of what types of vehicles you expect to be delivered? Yeah. Let me, well, first of all, I guess the targets will be increased in Q4 compared to the prior quarters that we delivered. We're comfortable that we'll be able to deliver that uptick in volume. Seasonally in Vietnam, there's an increase in vehicle sales ahead of Lunar New Year, which we'll be a beneficiary of, in particular with the launch of the VF 6 and the VF 5. Now, the domestic models that we are expecting to be most popular in Q4 are the VF e34, the VF 5, and VF 6. While also, we'll be making deliveries on both a retail basis and to B2B customers of the VF 8, but in relatively smaller quantities. We don't give a breakdown of model by model deliveries or projections. So that's as much as I can say. Yeah, very good. Thanks. Your sales growth in North America, you said, was spurred by interest in Canada. Do you think you could elaborate on what's driving that interest and how you expect those trends to evolve over the next few quarters? Sorry, what, what's the question? In, I heard you say in Canada? Yes. You called out strong interest in Canada when talking about North America, and I was just curious to see what types of trends you were seeing in that region and how you might expect those trends to evolve over the next, call it, year or so. We continue—I mean, we have pretty much, we're still more than the number of vehicles that we received in Canada. The level of interest in Canada is very, very strong, and we expect that we, with the visit of Vietnam, there will be growing demand from Canada. Within Canada, the Quebec stream in particular attracted a lot of interest as well of vehicles. So yeah, I think it's just an overall receptivity towards electric vehicle adoption in Canada. I think there's probably a structural lack of competition and choice for Canadian consumers relative to potentially other markets, in particular the U.S. Obviously, there wouldn't be a national affiliation or an affinity for the Tesla brand in Canada compared to the U.S. And I think Canadians perhaps are more receptive to a new and emerging Asian brand in the EV space, all of this contributing to a receptivity to VinFast that we're very encouraged by. And as I did highlight, the uptick in North American sales was driven by the increase in sales in Canada in that period. Yeah, thanks. That's very helpful. And then, I guess keeping on the trend of global markets, you said that you want your vehicles to be available in 50 global markets by the end of 2024. By vehicles, do you mean, scooters and cars, or, well, you know, could you break that down perhaps between scooters and cars, or is it, is it both? I think, I mean, we were referring to mostly the EVs, but obviously there are certain markets like Indonesia and India, where two-wheel penetration is pretty significant. We would like to do more with scooters as well. But when I mentioned up to 50 global markets and countries by the end of 2024, we were referring to EVs. Great. Thanks very much. And then, and then just finally, talking about global expansion, in the United States, you said that you have LOIs from 27 U.S. dealers. What does the timetable look like between LOI and getting something on the showroom floor? We target to have some of the dealerships open by the end of the year as well. Excellent. Thanks very much. Thank you. Thanks, Brian. Thank you. Our next question comes from Andres Sheppard with Cantor Fitzgerald. Your line is open. [audio distorted]. Yeah. Thanks, Andres, and thanks for the question, good to hear from you. As I reiterated before, the seasonal uptick in the local Vietnamese market, primary demand for vehicles in the fourth quarter, is notable. We expect that to drive the bulk of the uptick in volumes. We obviously have also continued outstanding contracts with VCB partner and GSM for the delivery of many e-taxi models that we'll be in a position to deliver. We have a new VF 6 model coming onto the market, and that's available for reservation from October 20 here in Vietnam, and that we'll be delivering this quarter as well. On top of that, we have deliveries into Europe, our first vehicle deliveries into Europe, and the deliveries of VF 8 and our first VF 9 delivery into the North American market also. So overall, still reiterating the same guidance, notwithstanding that it is an uptick in volume relative to the prior two quarters. Yeah. So that's a great question. The improvement quarter-over-quarter is favorable. We are expecting that trend to continue. I think one thing that should be noted is that when we launch a new vehicle model to SOP this quarter, the VF 5 in particular, was SOP to begin with. It does take us some time to optimize the production process and the efficiency of inventory required. So, we expect that, operating and contribution margin from that vehicle model to improve, in the next quarter. And overall, we expect the trend. We are, we are very, focused on optimizing operations and manufacturing, obviously scaling all of the vehicle models, to improve efficiency. And, we have indicated in the past that, we can see ourselves getting to a breakeven profitability, in, in the space of, two years. So we still very much, have that vision in mind and, expect to be able to deliver on that, even ahead of time. Yeah, thanks, obviously, yeah, we not, providing, guidance for next year, but we're not, creating the capacity for no reason. We do anticipate, a steeper uptick in our volume next year. Some of the initiatives that Matthew already mentioned, the key target markets in Indonesia and India, and the production, CKD production facilities there, and also the dealership, network sign-up in both the U.S. and up to 50 markets, is on top of that, that we're looking to expand into. All of those will drive volume in addition to strong growth domestically here in Vietnam. I think it's probably worth noting as well that, from a volume, we do have up to 300,000 units of capacity that we can manufacture here in Vietnam, and so we'll be looking to utilize all of that capacity, you know, over the course of the next few years. The manufacturer of CKD vehicles obviously is a combination of manufacturing many of the parts and the structure of the vehicle here in Vietnam before we ship it to the CKD assembly point. So it is a hybrid manufacturing approach. Thanks, Andres. Line is open. Our next question comes from Adam Hornby with DLD Asset Management. Your line is open. Hi there. We're having a little bit of trouble hearing you, so apologies if this has been addressed already. But could you tell us, of the deliveries in the quarter, how many went to Green SM Taxi? In the quarter, out of over 10,000, in Q3, about 70% went to GSM, about 6,800 vehicles went to GSM. Would you be able to tell me if you have a production number or a delivery number that you know you need to hit in order to get to cash flow breakeven? As indicated last time, I think the total sum for the market is about 202-250,000 vehicles per year. Because our cost rate is lower than other OEMs, we expect around 150,000 vehicles, right, to be allowed for GSM per year. Can you hear me? Is this better? There are no further questions on the phone. Hi, the next call... Question is from the webcast. How many cars were sold to GSM and to the US market in Q3 2023 and the first nine months of 2023? Could you please break down the revenue by VN and US markets? Speakers, please unmute. Yeah, cumulatively, the number that we have sold to GSM is about- [inaudible]. The year-to-date cumulative number is about 2,300 uh 2,300 vehicles. Next question in the account. Yep. The next question is: What is the payment scheme for GSM? How much of the first nine months revenue was from GSM and percent of cash that was collected? The payment term for GSM contract was standard BC [inaudible]. I mean, we have a 60 or 90-day payment terms on those contracts. We created about 300... The revenue from GSM, nine months to date, is approximately $380 million. Thank you, David. The next question is: How are you going to manage only $131 million cash on hand? Are you going to raise more money and how? Yeah. So I think we've been pretty clear about this. We have ongoing commitments from Vingroup and the chairman for the next six months or beyond. The up to $1.2 billion is there. I think currently we have been proactive in the capital markets, especially now that we are listed and looking at opportunities for the company to raise cash and to monetize the company's share price in addition to other avenues and other instruments that we're considering. Thank you, David. The next question is: Can you please update on the development timeline of the U.S. factory? We expect the factory to still stay in around middle to latter 2025. Thank you, Thủy. The next question is: Why does VS plan to build additional CKD factory in India while the VN factory is currently running at a lower utilization rate, and VS has recently announced the plan in Indonesia? Yeah, I think the main, the main driver is, obviously the, the tax incentive and the incentive from, from the government for having the facility in, in this country, that allows the market packages to the market, and then the, access to the customers, faster access to the customers. And, we also expect to, because of the low EV adoption in those markets, so we expect to be able to participate significantly in those markets. In the past weeks, we've been working, looking at our CapEx plan, and we have, managed to save about $400 million, from the existing CapEx plan, you know, so that we can, invest in, this CKD plant in Indonesia and India. So like David said before, in the coming two years, we still expect most of our deliveries to come out from our Hai Phong plant. Thank you, Thủy. The next question is regarding to your financials. Why was your 3Q revenue slightly higher after a significant increase in 2Q? Yeah. So, Q revenue did increase for a couple of reasons. It was off a low base in Q1, which is low season for car selling due to it being during the New Year holiday here in Vietnam. And then in Q three, we delivered increasing numbers of new models such as the VF 5 and the VF 9 in Q2. So, yeah, I think it was just comparing quarter-over-quarter, the combination of starting off with low base and effectively delivering new models meant that the quarter-over-quarter, Q3 to Q2 increase in revenue was on new models. And as I said, we expect that an uptick in revenue from increased vehicle sales in Q4, seasonally higher. Thank you, David. How should we think about your debt profile? We obviously maintain a diversified balance sheet of debt, domestic, international bank loans, syndicated loans, and domestic bonds. We have, with the exception of our short-term borrowings, our debt is pretty well-wide, well-spaced over the periods of one to three, with no more than five years. There are a number of international and a diversity of international banks that we are from whom we are borrowing money. Thank you. The next question is related to the VF 6. What are the key selling points for this new model? Well, the VF 6 is a very key vehicle model, not just for us here in Vietnam, but internationally, we think it's a B-segment SUV. It's oriented to families, got a five-passenger size, designed beautifully by Torino Design in Italy, and equipped with a wide range of smart driving features, ADAS level. Battery size and battery composition, it's almost 60 kWh battery of LFP type, and packed by BNEF here in Vietnam, and packed in by our battery partner. It's got a very strong range and excellent charging capabilities, and obviously then most importantly, it's priced very, very reasonably, starting at the equivalent of $28,000 for customers here in Vietnam. So, not just here in Vietnam, but when we export it internationally, we expect it to compete in that very high volume, mass market premium segment, that will enable us to, I think, deliver a substantial volume. Thank you, David. The next question is related to Indonesia. Can you please elaborate on your distribution strategy for the Indonesian market? If it's with a local partner, who is the partner? And are there any incentives granted by the government during the construction of the CKD plant? We're still in discussions with both the government as well as local partners. So let us come back with more information in the future. Thank you, Thuy. The next question is back on our CapEx guidance. Could you please elaborate more on the changes in CapEx guidance from 2024 to 2025? Just, is it due to extending the CapEx disbursement timeline or due to changes in plans for the U.S. factory? No, we didn't make, we didn't make the changes to the plan or the timeline, we just optimized. If anything, we actually added more items to the manufacturing facility in the U.S. We optimize in globally, in all manufacturing CapEx, in order to decide to be efficient. I'll just add one further clarification there on the CapEx. That's a multi-year CapEx saving that we're using to reinvest the proceeds into our planned investments in Indonesia and India. It's not a one-year reduction of $400 million in CapEx. Thank you, David. How would the expansion of the third-party dealership affect your balance sheet and P&L? Yeah, I think it's going to be very much more efficient and obviously some of our CapEx optimization is driven by growing our distribution channels through dealerships and partnerships, rather than directly investing in owned and operated showrooms. That will be the principal change and difference in balance sheet. And then obviously from a distribution perspective and a visibility or a sales perspective, we will be able to have greater predictability and visibility over upcoming quarter and half year sales to deliveries and commitments from dealers. So I think it will provide us better visibility on upcoming orders and reduction in volatility from quarter to quarter sales. The fourth perspective is the speed to market as well. I believe the partnership with the dealerships and distributors allow us to expand a lot faster than originally expected. Thank you. The next question is, can you please share more information about your production cost structure? Well, I think, yeah, I think we've been clear that we have cost structure advantages. Being here in Vietnam, it's a very efficient place to manufacture, from where to export into the markets that we're looking to target. We have significant labor cost advantages. We have great foreign trade agreements that we can export under that are very efficient to ASEAN markets, the U.S., Europe. We have talented technology and R&D staff that are highly educated here in Vietnam. We have a scaled manufacturing facility in Vietnam, where is capable of producing a very, very high volume of vehicles and a fully integrated supplier park that allows us to operate very efficiently from a supplier perspective. So we have a lot of advantages. We obviously don't break those out, you know, to the level of detail. That information is, yeah, pretty sensitive by all automotive manufacturers. But, you know, we're very optimistic about our opportunity to profitably and competitively produce vehicles here in Vietnam for export. Thank you, David. The next question is related to the registration of shares. Why did the company register these shares so soon after the listing? Over what time period will these shares be sold by the two key shareholders? Maybe I can clarify this for the listeners. So we register, I think, 75.7 billion shares, but not all of them are being sold to the market. Only about over 46 million shares will be added to the free float of the market. The intention is to, obviously, number one, is to increase the liquidity, increase the free float in the market, so, you know, we can have the more participation of investors in the market, and to increase... to raise capital for VinFast. There's no particular period of time where we want to sell the, the, the shareholders will sell the shares, and the shareholders have not started selling the shares yet. I think maybe another point, another very important point is, this 46 million shares was gifted by our chairman to VinFast, so VinFast can sell the shares. 100% of the net proceeds from selling the shares will go into VinFast, for free, to continue growing VinFast. Thank you, Thủy. The next question is: Are you able to share the preliminary guidance for 2024 and 2025 R&D expenses? And how is it versus the first nine months of this year? So I think, again, as we have been developing a full portfolio of vehicles, in parallel, the R&D spend has had a high run rate through 2022 and 2023. We will be finalizing the delivery of those full portfolio of vehicle models. So we've already identified the start of production of the VF 6. We have the VF 9 to be delivered to the U.S. We have VF 7 and VF 3 in 2024, and we have some work to do around the delivery of right-hand drive vehicles. But all this is expected to be trending down from an R&D perspective, significantly from the middle of next year. So that, coupled with the lower CapEx that we're optimizing, I, I think, the free cash flow will come much sooner and much more positive to the firm than previously we had anticipated. Thank you, David. That wraps up all the questions on the phone and through our webcast. Please do reach out to our- Um-[inaudible] Yes. If I can take just one minute. I mean, there have been a lot of questions about GSM. So if possible, can I just say a few things about GSM? We think that GSM is a perfectly good business, and it has probably about 70% is the taxi business, and the other 30% is the vehicle leasing, like vehicle leasing business, you know, to the other taxi company, to corporate, so like many other business we visit. As a taxi business, GSM has done very well in Vietnam. Starting just over, just not even five months ago, but as of last week, I think GSM already marked the 6 million rides in Vietnam. We just started delivering the e-scooter to GSM, but they already have 1 million e-scooter rides in Vietnam. GSM now is the number two taxi company in Vietnam already, and very soon, it's going to be number one taxi company in Vietnam. GSM will expand into other markets as well, beyond Vietnam, together with, like, you know, Indonesia, India, even in the US. From VinFast's perspective, we think that GSM is a very good business partner, and it's going to complement very well VinFast's growth in the future. Just want to say a few words about GSM, because there has been an overwhelming number of questions about GSM. Thank you. Thank you, Thủy. That wraps up all the questions we have for today's call. If anything comes up, please do reach out to our IR email address, and we get something set up and answer your questions accordingly. Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.