ZEEKR IPO ushered in key progress.
On May 5, Geely Automobile issued an announcement on the latest progress of the spin-off and listing of its brand Zeekr Automobile. According to the announcement, ZEEKR has submitted an updated Red Herring version of the prospectus to the Securities and Exchange Commission (SEC) on May 3 (New York time), and plans to be listed on the New York Stock Exchange with the stock code "ZK".
According to the prospectus, ZEEKR will issue 17.5 million ADSs (American Depositary Shares), each ADS corresponds to 10 ordinary shares, with an issue price range of $18 to $21 per ADS, and a target valuation of up to $5.13 billion.
Among them, Geely Automobile, the original shareholder of ZEEKR, said that it would subscribe for ADS of no more than US$320 million, and investors and shareholders such as CATL and Mobileye also expressed interest in participating in the subscription.
As for the use of the raised funds, the prospectus shows that ZEEKR plans to use 45% of the raised funds to develop more advanced pure electric vehicle technology and expand its product portfolio, another 45% will be used for sales and marketing, and expand the service and charging network, and about 10% will be used for general corporate purposes.
It is understood that this is the second time that ZEEKR has submitted a prospectus to the Securities and Exchange Commission. As early as November last year, ZEEKR submitted an IPO prospectus to the SEC and planned to list on the New York Stock Exchange under the stock symbol "ZK". According to the market view at that time, "if it can be successfully listed, ZEEKR will set a record for the fastest listing of new energy vehicle brands, and become the fourth Chinese new energy vehicle brand to be listed in the United States after 'Wei Xiaoli'." ”
However, the follow-up ZEEKR did not announce the issuance range and issuance scale and other data, which made the market speculate, or due to the weak market sentiment at that time, ZEEKR temporarily shelved the US IPO plan. At that time, ZEEKR officially responded that "the company has publicly submitted a prospectus to the US Securities and Exchange Commission, and various preparations are progressing in an orderly manner." ”
Although ZEEKR gave an official explanation at that time, according to a number of people close to ZEEKR, "due to the weak market sentiment and mismatched valuation expectations, ZEEKR decided to suspend the IPO plan." ”
In fact, there are early signs that its valuation is lower than expected. In early April, it was reported that Zeekr had restarted its plan to raise up to $500 million in an initial public offering (IPO) in New York, and this time it became more than $300 million. This means that Zeekr has scaled back its financing plan, and its original plan, Zeekr wanted to get $1 billion in financing.
It is reported that after submitting the updated Red Herring version of the prospectus, ZEEKR will be officially listed on the New York Stock Exchange as early as May 10. In the eyes of the industry, this IPO is not only a comprehensive demonstration of ZEEKR's own strength, but also an important test of the current capital market's attitude towards China's electric vehicle industry.
In fact, since "Wei Xiaoli" landed in the U.S. capital market in 2020, few new Chinese car companies have landed on the U.S. stock market in the past four years due to multiple factors. For example, with the intensification of market competition, it is difficult for most new car companies to make profits, and the attitude of capital towards new car companies is cautious, which is not only difficult to raise funds in the primary market, but also more difficult to complete the IPO as expected.
In addition to this, the external environment has undergone some changes. For example, the United States has continuously strengthened its regulatory policies involving Chinese concept stocks, expanded the list of securities trading restrictions, and introduced and accelerated the implementation of the Holding Foreign Companies Accountable Act, which has led to profound changes in the regulatory environment of the Chinese concept stock market, and a significant increase in uncertainty, resulting in a sharp decrease in the number of Chinese concept stocks listed on the United States and the scale of fundraising.
It is not until 2024 that the U.S. capital market finally shows signs of recovery and gradually ushers in a rebound. According to incomplete statistics, as of April 28, 20 companies have landed on the U.S. stock market, exceeding 18 in the same period last year, which also creates an opportunity for ZEEKR to go public in the United States.
If it successfully lands on the U.S. stock market this time, ZEEKR will not only be the fourth Chinese new car company to successfully land in the U.S. capital market, but also become the fastest new energy vehicle company in history.
Of course, the success of landing on the U.S. stock market is not unrelated to its own strength. As a luxury intelligent pure electric vehicle brand under Geely Holding Group, ZEEKR is positioned as an intelligent, digital, and data-driven intelligent travel technology company.
Among them, Geely Holding spent five years and invested more than 20 billion yuan to build a world-class leading SEA vast architecture, which is the technical foundation of ZEEKR. It is understood that the architecture is not only used by ZEEKR, but also 11 models of 6 brands such as Lotus, Volvo, Jiyue, and Lynk & Co are all developed based on the vast architecture.
In terms of financial data, the prospectus shows that from 2021 to 2023, ZEEKR's operating income will be 6.5 billion yuan, 31.9 billion yuan and 51.7 billion yuan respectively, and the net loss will be 4.5143 billion yuan, 7.6551 billion yuan and 8.2264 billion yuan.
Although there is a loss, its gross profit margin in 2023 is second only to Tesla's 19% among pure electric car companies, and the gross profit margin of Zeekr vehicles in the past three years is 1.8%, 4.7% and 15% respectively. According to the plan, ZEEKR's goal this year is to turn losses into profits. If this goal is achieved, ZEEKR will become the new car manufacturer with the fastest breakeven.
In terms of market performance, as of April this year, ZEEKR has delivered more than 240,000 vehicles, and nearly 50,000 units have been delivered from January to April this year, ranking fourth among new car manufacturers, and the top three are Wenjie, Ideal and Aion.
At the China Electric Vehicle 100 Forum in March this year, An Conghui, President of Geely Holding Group and CEO of Zeekr, said, "Geely Holding Group's development goal is to become a Volkswagen Group in the era of new energy vehicles, and Zeekr shoulders the global mission of high-end pure electric vehicles." It is foreseeable that with the IPO of ZEEKR in the United States, it will further improve its global layout.