"In 37 months, ZEEKR has refreshed the fastest record for new energy vehicle brands from release to IPO", An Conghui, CEO of ZEEKR Intelligent Technology, said on May 10 when ZEEKR successfully landed on the New York Stock Exchange. In contrast, NIO, Li and Xpeng Motors, which were previously listed on the U.S. stock market, took 4, 7 and 5 years respectively from inception to listing.
Obviously, this is another proof of "extreme krypton speed". On the same day, ZEEKR was listed on the New York Stock Exchange with the stock code "ZK". As a result of the oversubscription, ZEEKR expanded its IPO by issuing a total of 21 million American Depositary Shares (ADSs) at a price of US$21 per share, raising approximately US$441 million, and if the underwriters exercise their over-allotment rights, the offering size will be further expanded to 24.15 million ADSs, raising approximately US$507 million.
According to the issue price of $21, the valuation of ZEEKR Automobile is about $5.2 billion, compared with the valuation after the previous two financings, the IPO valuation of ZEEKR is obviously seriously reduced. However, the "oversubscription" also reflects investors' confidence in the development potential of ZEEKR. The opening price of ZEEKR was $26 per share, and the stock price rose all the way after the start of trading, once rising to $29 per share, an increase of more than 38% compared with the issue price of $21, with a market value of $7.078 billion. As of the close, ZEEKR was quoted at $28.26 per share, up 34.57% from the issue price, with a market value of $6.898 billion. This shows that the potential of ZEEKR has been recognized by the capital market.
According to official information, the funds raised by ZEEKR through the listing will be used in the following three areas: about 45% will be used to develop more advanced electric vehicle technology and expand the product portfolio; Approximately 45% will be used for sales and marketing and the expansion of ZEEKR's service and charging network;
Approximately 10% is used for general corporate purposes (including working capital requirements) to support ZEEKR's business operations and development.
In a word, ZEEKR has been given another opportunity for high-quality development. At the same time, the IPO will also force the system to evolve again, An Conghui said that ZEEKR will take the listing as an opportunity to further upgrade the governance structure, achieve global compliance, transparent and sustainable development, and create the most extreme experience of travel life with global users, bringing stable long-term value to investors.
Amazing growth rate - Extreme Krypton speed
It took 37 months and 3 years for ZEEKR to complete the IPO road of NIO, Li and Xpeng Motors in 4, 7 and 5 years respectively, setting a new record for the fastest IPO of China's new car-making forces. Its growth rate is not amazing, but before the IPO, the "ZEEKR speed" has actually resounded in the automotive industry.
In March 2021, ZEEKR broke away from Geely's fetus, and in the face of cruel market competition and the market thinking that "traditional car companies will not make new energy", this "little young" quickly proved his potential with data. From 0 to 100,000 vehicles, it took only 18 months for ZEEKR, and from 100,000 to 200,000 vehicles, it took only 8 months. Compared with its peers, it took 35 months for Xpeng Motors to reach 100,000 sales, NIO was 1 month ahead of Xpeng Motors, and Li Auto took 24 months.
In just three years since its birth, ZEEKR has accumulated 240,000 users for itself. According to the latest data, from January to April this year, ZEEKR has more than doubled its growth, a year-on-year increase of 111%, and continues to rank as the sales champion of more than 200,000 Chinese pure electric brands. It should be mentioned that since 2021, the development environment of China's auto market has not been good for the "budding new" of ZEEKR, with supply chain crises, epidemics, and price wars...... ZEEKR has caught up, and this can better reflect the gold content of ZEEKR's accumulation of user speed.
As of May, ZEEKR Energy's self-built charging stations have exceeded 1,000, and the number of self-built charging stations of China's pure electric brands has reached the top three. In terms of the international market, according to the content of the prospectus, ZEEKR has entered more than 50 countries and regions around the world, such as Southeast Asia, Australia, the Middle East, and South America, and will be deployed in 8 European markets this year.
An Conghui mentioned when talking about ZEEKR's new IPO record for new car-making forces, behind this is the 37-year accumulation of Geely Holding Group, the parent company of ZEEKR, and the pioneering exploration of the third track of the new energy vehicle industry. Needless to say, Geely Holdings' wealth, technical pole and long-sleeved dancing in the capital market are not to mention, and the "third track" is more prominent for Zeekr.
Compared with more peers, the development model of ZEEKR can be regarded as "non-mainstream". Backed by Geely, empowered by the group's heavy assets, ZEEKR itself is asset-light operation, and the two parties jointly hold shares, which not only have the rich experience of traditional car companies, industrial base, technical reserves and system capabilities, but also the innovation, flexibility and user-oriented characteristics of new car manufacturers.
Compared with traditional car companies, ZEEKR has the thinking of a new car company, and compared with companies starting from scratch such as NIO, it saves a lot of work. The practice of "the third track of the card position" has also allowed ZEEKR to create its own "ZEEKR speed", whether in terms of delivery, energy replenishment and other operations, or in terms of IPO speed. And this "non-mainstream" business model may not be the reason why ZEEKR was "oversubscribed" and the market value soared after the opening, after all, this model has confirmed the development speed and potential with data.
Seriously underestimated but using strength to prove itself ZEEKR ushered in the opportunity for higher quality development
The corresponding valuation of ZEEKR's public offering is about 5.12 billion US dollars, and the vast majority of industry insiders give an evaluation of this valuation - ZEEKR is seriously undervalued. Prior to this, ZEEKR has gone through two rounds of financing, and the valuation is much higher than this figure. In August 2021, ZEEKR raised $500 million through the Pre-A round, with a post-investment valuation of about $8.9 billion; In February 2023, ZEEKR raised $750 million through Series A financing, and its post-investment valuation reached $13 billion.
Compared with the previous two rounds of financing, the listing valuation of ZEEKR is obviously not ideal. Judging from the current situation of Extreme Krypton, in addition to the terrifying speed of "Extreme Krypton", it is also remarkable in other aspects. According to the prospectus, in 2021, 2022, and 2023, the total operating income of ZEEKR will be 6.528 billion yuan, 31.899 billion yuan, and 51.7 billion yuan respectively, of which the revenue in 2023 will increase by 62% year-on-year. In 2023, the gross profit margin of ZEEKR vehicles will be 15%, an increase from 1.8% in 2021 and 4.7% in 2022. In terms of gross profit margin, ZEEKR has ranked among the first echelon of new car-making forces, second only to Tesla among pure electric companies, and higher than NIO and Xpeng Motors.
At the same time, ZEEKR has a very optimistic expectation for profitability, and Dai Yong, deputy CFO of Geely Automobile Group, previously said that under the premise of increasing sales and gross profit, ZEEKR will strive to turn losses into profits in 2024 (according to Hong Kong Financial Reporting Standards). According to Hong Kong accounting standards, the loss amount of ZEEKR in 2023 will be 1.135 billion yuan, compared with the loss of 2.039 billion yuan in the same period last year, the loss situation has improved significantly. With high gross profit and rapid growth in deliveries, ZEEKR's goal of turning losses into profits may not be unachievable, and assuming that ZEEKR achieves this goal this year, it will also become the third profitable new energy vehicle company in China and the fastest breakeven new car-making force.
From this point of view, the statement that "ZEEKR is seriously underestimated" is not groundless. Of course, with the current pressure on Chinese concept stocks in the U.S. stock market and the downward trend after the new energy boom, the undervaluation of ZEEKR is not expected. However, judging from the performance of the market value of ZEEKR soaring to $7.078 billion on the day of its issuance and the market value of nearly $7 billion after closing, ZEEKR obviously proved with its strength that "the strong never complain about the environment". With the help of this IPO, ZEEKR will also usher in higher-quality development opportunities.
First of all, financing and more financing opportunities are the benefits that every IPO company can get, and ZEEKR will also use financing for products, technology development and marketing, but choosing to IPO in an undervalued attitude, ZEEKR's idea is probably more than that.
An anonymous securities analyst once told the editor of "Financial Circle Society & Dao Ge Shuoche" that the core effect of IPO on a company's increase in holdings lies in the standardized corporate governance structure. As far as ZEEKR is concerned, listed on the U.S. stock market, ZEEKR needs to put the company's relevant information and trends under the magnifying glass of the market in the future, which puts forward higher requirements for ZEEKR's finance, management, products, technology and other aspects. Of course, this is also an opportunity for ZEEKR, as An Conghui said, ZEEKR will take the listing as an opportunity to further upgrade its governance structure and achieve global compliance, transparency and sustainable development.
From another point of view, this may also mean that ZEEKR is confident to show its real business results. In addition, the overseas listing is an excellent opportunity for China's new energy vehicle companies to improve the voice of domestic and international brands, and on the occasion of the IPO, ZEEKR also announced a new international layout, according to An Conghui, based on the completely subverted form of electric vehicles of the vast-M architecture, we and Waymo cooperation to customize the model is about to enter the United States travel market, its household products will also be launched in China and other markets.