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The author is thoughtful
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"Krypton! Extreme Krypton! Extreme Krypton! ”
In the cheers of the audience, An Conghui, CEO of ZEEKR Intelligent Technology, rang the opening bell of the New York Stock Exchange on May 10, 2024 EST, marking the official listing of China's smart electric vehicle company ZEEKR on the New York Stock Exchange. This is the first time in nearly six years since NIO was listed on the New York Stock Exchange on September 12, 2018 that a Chinese auto company has gone to the United States to join the world capital market.
Compared with Ideal and Xiaopeng, which had to be listed on the New York Stock Exchange remotely due to the epidemic a few years ago, ZEEKR, which was born with Geely's father's "golden key", is much more stable. From brand launch to IPO, ZEEKR only took 37 months. At the time of writing, the company's share price performance on its first day of trading was satisfactory to investors.
However, in the author's opinion, a successful IPO is just a footnote in the Long March for ZEEKR. In addition to the accumulation of Geely Group's technology, the company's next step should be to find its own meaning of independent existence among global auto brands.
On the day of listing, it rose 28%
"Before the listing, I didn't dare to answer the calls of investors. Because as soon as the phone rang, I knew they were here to ask for a share, but I couldn't bear to refuse them. Li Donghui, CEO of Geely Holding Group and vice chairman of Geely Automobile, told the media.
After ringing the bell for listing, Li Donghui expressed the capital's recognition of ZEEKR to the outside world in a low-key tone as much as possible. In all fairness, he does have reason to be proud of Zeekr.
In the transaction on May 10, ZEEKR expanded its IPO and issued a total of 21 million American Depositary Shares (ADSs) at a price of $21 per share, raising about $441 million. If the underwriters exercise their over-allotment option, the offering will be further expanded to 24.15 million ADSs, raising approximately US$507 million.
When the time was close to noon, ZEEKR officially began trading at the opening price of $26 per share. Then on the same day, the company closed at $28.26 per share, an increase of about 28%, and the total market capitalization reached $6.898 billion, which is already close to Xpeng's $7.303 billion.
The market is generally confident in Zeekr. In April this year, the penetration rate of new energy vehicles in China exceeded 50%. Among them, in January ~ April this year, ZEEKR delivered a total of 50,000 new cars, doubling year-on-year, and is the sales champion of China's own brand high-end pure electric vehicles of more than 200,000 yuan. In the past 2023, ZEEKR delivered a total of 119,000 new cars, ranking among the top Chinese car brands.
More importantly, the company's prospectus shows that in 2021, the company's gross profit margin of vehicles will be positive, and it will reach 15% last year. You must know that Tesla, which also only sells pure electric vehicles, has a gross profit margin of only 18.2%. It is believed that with the gradual increase in sales, there is still enough room for improvement in the gross profit of ZEEKR.
However, this does not mean that ZEEKR can sit back and relax for the future.
Throughout 2023, although China's BEV sales increased by 24.6% year-on-year, the growth rate of the plug-in hybrid market reached 84.7%. Although the absolute sales of the former are more than twice that of the latter, the slowdown in the sales growth of pure electric vehicles is already an established fact, and Zeekr is facing increasingly fierce competition in the process. Not to mention, the Chinese auto market, which is now involuted, has put greater competitive pressure on brands like ZEEKR that are determined to build high-end models.
In addition, the IPO of ZEEKR itself has a slight regret attribute. According to the original plan last year, Zeekr originally hoped to raise $1 billion. But judging by today's results, it is clear that this plan has been cut in half.
The reason why it chose to continue to land on the U.S. stock market is that ZEEKR has quite realistic considerations. From 2021 to 2023, the net losses of ZEEKR will be 4.514 billion yuan, 7.655 billion yuan and 8.264 billion yuan respectively, and the cumulative amount has reached 20.433 billion yuan, which requires blood transfusion from the capital market.
ZEEKR 001
However, An Conghui is very calm about this.
"It's a bit smaller, but it's the largest among global automotive companies in the past few years." An Conghui said.
In addition to financing and strengthening governance, IPO also has self-evident significance to the globalization of ZEEKR. ZEEKR will enter 8 countries in Europe this year, as well as 50 countries and regions including Southeast Asia, the Middle East, South America and Australia. In these markets where there is still a lack of understanding of the ZEEKR brand and products, the value brought by the name of a "NYSE listed company" cannot be replaced by no amount of marketing budget.
ZEEKR was unveiled at this year's Bangkok Motor Show
Of course, with more abundant funds, lower fundraising costs and wider financing channels, ZEEKR should also put more effort into making better products and telling its own story.
Especially on this last issue, ZEEKR still has a lot of room for improvement.
In addition to auspiciousness and vastness, ZEEKR should tell its own story
Judging from the author's communication results with some industry professionals and ordinary people, everyone's understanding of ZEEKR's products is greater than their understanding of its brand image. In fact, everyone ZEEKR 001, 009 and even the latest "baby bus" - ZEEKR MIX can be called "impressive".
But for the question "What is ZEEKR? In addition to "Geely", "high-end electric vehicles" and "vast architecture", many people, including the author, have not actually formed a consensus.
In fact, when the author directly threw this question to An Conghui, he did not give a short and clear answer, but conducted a comprehensive discussion for more than 20 minutes. In the narrative system between him and ZEEKR, the logic of this brand's concept and planning can be called rigorous and complex.
The following paragraphs are from An Conghui's expression -
At the enterprise level, ZEEKR is an enterprise with a comprehensive layout in the industrial chain, ecology and globalization. First of all, in terms of the industrial chain, ZEEKR has carried out a full-stack self-research layout in the fields of electrification and intelligence. The company has a layout for silicon carbide chips, power semiconductors, and intelligent driving and intelligent software and hardware design and manufacturing capabilities. For example, ZEEKR's high-end intelligent driving system was developed in cooperation with Mobileye.
Secondly, at the level of ecological synergy, An Conghui emphasized ZEEKR's efforts in the "three 800" ultra-fast charging ecological solutions. Specifically, it includes 800V vehicles, 800V electric (power batteries), and 800V high-voltage energy replenishment networks. At present, the company has launched more than 2,500 ultra-fast charging piles, ranking first in the industry.
Finally, globalization. In addition to the aforementioned global market layout, ZEEKR has also reached a partnership with Waymo, Google's self-driving company, in the United States to provide exclusive vehicles for its autonomous driving fleet.
At the product level, An Conghui said that ZEEKR's models are always willing to challenge the boundaries of the automotive industry's engineering capabilities, and like to "start with the most difficult things". For example, the ZEEKR MIX, which was recently unveiled at the Beijing Auto Show, adopts the industry's first bi-side door + "invisible B-pillar" structure, providing a large opening space of nearly 1.5 meters wide. On the first model of ZEEKR 001, An Conghui also said that they did their best to implement the advantages of SUVs, sedans and sports cars in one car, and achieved excellent sales performance.
In addition, An Conghui introduced the progress of ZEEKR products in differentiation and platformization. Especially in terms of platformization, ZEEKR products are based on the vast structure of Geely Group, and other brands have achieved joint procurement and cost sharing, which is greatly conducive to cost amortization.
We readers may find these paragraphs a little boring, but please believe that the author has summarized An Conghui's answer in as concise language as possible. Frankly, this interpretation is obviously valuable for professionals to understand Zeekr, but it is a bit too complicated for consumers who lack knowledge of the automotive industry and just want to establish an initial impression of Zeekr products.
In the author's opinion, ZEEKR has emphasized too much in its past external communication what technologies and industries Geely Group has empowered itself, but lacks more expression of its own unique brand labels and propositions. Especially at the level of product design, although each car has its own sense of design and relatively independent positioning, it lacks echo with each other and family design elements.
In short, every child in the family looks different.
ZEEKR 001, 009 and X
What's more, as Geely Holding Group's brands have become bigger and stronger, the advantages between Zeekr and other "brothers and sisters" at the brand level are not obvious. For example, Lotus has a high-performance racing DNA, Polestar is a Nordic relative with Volvo pedigree, Lynk & Co is a pioneer in hybrid, technology and rejuvenation, and Geely Galaxy is a cost-effective choice for the mass consumer market......
In contrast, in addition to "high-end", ZEEKR does not have a particularly clear brand label. In fact, even in terms of technology brands, ZEEKR lacks a concept that is recognized by users and the industry in addition to its vast architecture. Not to mention, the architecture is shared by brands including Polestar, Volvo, Smart, Lotus, Jiyue and others. This is understandable for a large automobile group, but for ordinary consumers, I am afraid that it will take a lot of detours.
Therefore, in the author's opinion, after the completion of the phased goal of the IPO, ZEEKR should raise the construction of the brand and even the strategic system to a higher priority. After all, as a company with a global layout, ZEEKR needs to establish a clearer corporate consensus in the process of rapid expansion of the plate, so as to ensure that the action is not deformed.
Write at the end:
For China's auto industry, how to achieve high-end in the involution market has become an increasingly urgent issue. However, it is a pity that at present, except for a few car brands such as Zeekr, NIO, Li and Wenjie, there seems to be no automobile group that has really made substantial progress in this regard.
Obviously, ZEEKR's IPO is a crucial step for both Geely Group and the company itself. The author also expects that ZEEKR can explore a broader boundary for Chinese auto brands in the long journey in the future.
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