Whip Bull reported today
On May 11, it was reported that at 12 o'clock local time on May 10 in the United States, ZEEKR was officially listed on the New York Stock Exchange with the code "ZK". In this IPO, the issue price of ZEEKR was set at $21 per ADS, and the opening price was $26.
As of the close, ZEEKR's share price was quoted at US$28.26 per share (about RMB 204.22), up nearly 35% from the issue price, and the final market value was fixed at US$6.898 billion (about RMB 49.85 billion).
So far, ZEEKR, which has only been released for 3 years after the brand's release, has also unlocked the achievement of the fastest IPO of Chinese new energy vehicle companies in the United States.
Wei Xiaoli took 4, 6, and 5 years respectively.
It is reported that the IPO ended the subscription one day earlier than the original plan, and ZEEKR was oversubscribed by more than 5 times, raising a total of 441 million US dollars (about 3.187 billion yuan), and the original investors and partners such as CATL and Mobileye continued to subscribe in the IPO.
This shows that investors' interest in investing in ZEEKR is more than expected.
Although ZEEKR is a young new force, it is the second generation of cars born with a golden key.
As one of the most valued car brands under Geely Holdings, ZEEKR can be said to have people, funds, and resources.
In March 2021, An Conghui, President of Geely Holding Group, personally took charge and became the CEO of Zeekr.
In July of the same year, Geely transferred 51% of the equity of Ningbo Weirui and all the shares of CEVT to ZEEKR. These two businesses accounted for 76.3% of ZEEKR's total revenue in 2021, giving ZEEKR ample room for development in the early stage.
Not only that, according to the prospectus, in April and November 2022, ZEEKR and its subsidiary Ningbo Weirui signed a 10-year loan agreement with Zhejiang Geely Automobile Manufacturing Co., Ltd., with a total amount of 11.3 billion yuan.
There is nothing wrong with saying that Extreme Krypton was cultivated and supported by Li Shufu as a "prince".
At the same time, Geely subscribed up to US$320 million in this subscription, accounting for 72% of the total amount raised.
To a certain extent, this also explains why ZEEKR can end the subscription early.
First, the valuation is still cut in half after several fundraising
In fact, this is not the first time that ZEEKR has hit the IPO.
As early as 2022, Geely Automobile announced that it had submitted a proposal to the Hong Kong Stock Exchange regarding the proposal to spin off Zeekr and list it independently. and confirmed by the Stock Exchange.
Soon after, it was reported that ZEEKR was listed in the United States instead in order to obtain a higher valuation.
In November 2023, Geely Automobile announced that Zeekr had submitted a registration statement to the U.S. Securities and Exchange Commission and planned to list on the New York Stock Exchange in the United States.
A month later, the IPO process of ZEEKR in the United States was suspended. This is due to a mismatch in valuation expectations and continued sentiment.
However, despite the change of listing location and the postponement of the IPO process, the valuation of ZEEKR after listing is still not ideal.
Based on the issue price of $21 per ADS, ZEEKR's IPO valuation is $5.13 billion. In February 2023, after the completion of the A round of financing, the valuation of ZEEKR has reached a high of $13 billion.
Even though the market value after the listing close rose to $6.898 billion, it was close to halving $13 billion.
Don't look at the rapid expansion of the domestic new energy market in the past two years, and the industrial chain is also dominant in the world, but far away on the other side of the Atlantic, the United States, the story of new energy is not sexy, and investors' enthusiasm for the reform of automobile electrification is not as high as in China.
Far from it, let's just say that Tesla, amid declining sales, announced last month the launch of a layoff plan involving 14,000 employees.
At the same time, the share price of the three Wei Xiaoli brothers has generally fallen by about 70% from the all-time high in 2021.
Therefore, under the influence of the general environment, it is expected that ZEEKR will get a low valuation.
Second, profits and sales are under pressure, and ZEEKR time is changing space
Even if the valuation is cut in half, why does ZEEKR still insist on going public?
This may be related to the urgent need for ZEEKR to get rid of the loss quagmire and achieve the sales target.
Burning money and losing money is a stage that all new forces must go through, even the second-generation Zeekrypton is no exception. According to the prospectus, in 2021, 2022 and 2023, the net loss of ZEEKR will be 4.5143 billion yuan, 7.6551 billion yuan and 8.2642 billion yuan respectively.
As of December 31, 2023, ZEEKR's cumulative loss reached 20.9 billion yuan, which is comparable to NIO's 20.7 billion yuan in 2023.
At the same time, ZEEKR has cash and cash equivalents of RMB3.3 billion and net current liabilities of RMB11.8 billion.
According to this calculation, if the average annual loss is 6.9 billion yuan, ZEEKR's cash can only support it for another half a year. If we look at the trend of expanding the range of losses year after year, it is not even half a year.
In addition, ZEEKR's target sales volume is also under great pressure.
In 2023, the sales volume of ZEEKR will be 118,600 units, a year-on-year increase of 65%, but the target completion rate is 85%.
On the premise that the sales volume in 2023 is not up to standard, ZEEKR CEO An Conghui put forward a higher target at the results conference, that is, to deliver 230,000 units throughout the year.
In other words, sales will almost double this year, and monthly deliveries will need to reach about 19,000 units.
According to the data, the delivery volume of ZEEKR in the first quarter was 33,000, and at this rate, only about 60% could be completed by the end of the year.
Of course, this is only a theoretical calculation. In fact, ZEEKR sold 16,089 vehicles in April, an increase of 23.65% month-on-month.
But the actual situation that needs to be considered is that with the entry of Xiaomi and the involution of many other companies, ZEEKR needs to come up with highly competitive products to achieve overtaking, so as to have the possibility of completing the goal. At the same time, it is necessary to ensure sufficient profits.
I have to say that the difficulty factor is very high.
On the whole, even if the valuation is cut in half, it may be a time-for-space strategy of ZEEKR, which can not only replenish ammunition, but also eliminate the profit pressure of some domestic price wars through new overseas markets.
It is necessary to keep your head down for a while, after all, you can only talk about it later if you stay at the table, and of course long-term value is more important than short-term market value.
It is understood that in the second half of last year, ZEEKR began to develop overseas markets, and the first batch of European versions of ZEEKR 001 and ZEEKR X models have been shipped to Europe, and finally completed overseas sales of more than 4,000 vehicles.
This year, ZEEKR will increase its overseas territory to Europe to 8 countries, and plans to enter most of Western Europe in 2026, of course, ZEEKR will simultaneously enter Southeast Asia, the Middle East, South America and other emerging markets, and is expected to launch sales in 50 countries by the end of this year.