After ZEEKR is listed, the key points that are really worth noting!

轰Party

2024-05-13 11:14Published in Hubei

For Geely's Zeekrypton listed on the New York Stock Exchange on May 10, the outside world sees more that its closing price has increased by about 35% compared with the issue price; Or from the establishment of the brand to the successful IPO, ZEEKR only took 37 months (about 3 years), as a comparison, "Wei Xiaoli" took 4 years, 6 years and 5 years respectively; Either that, ZEEKR's shares were oversubscribed by more than 5 times, so much so that it had to end its subscription a day earlier than originally planned.

After ZEEKR is listed, the key points that are really worth noting!

However, what everyone overlooks is that even if ZEEKR expanded its IPO on the day of listing, issuing a total of 21 million American Depositary Shares (ADSs) at a price of $21 per share, each ADS corresponds to 10 ordinary shares, its fundraising scale is only about $441 million. Furthermore, if the underwriters exercise their over-allotment rights, their issuance size will be further expanded to 24.15 million ADSs, and ZEEKR will only raise about $507 million this time.

This is a significant reduction in half from last year's original plan of $1 billion. So the question is: from the perspective of how much financing, choosing to go public in the near future is obviously not the best choice, in this case, why doesn't Zeekr wait and choose to go public in this "unfavorable" period?

One

The reasonable answer is that ZEEKR is in a hurry to go public in the United States this time, and its purpose is not only the amount of financing at the moment. The ultimate purpose of a company's existence is to make a profit, but if a company only makes decisions based on short-term benefits, it is difficult to say that it is not short-sighted. In fact, as Geely's global luxury pure electric smart brand, the listing of ZEEKR on the U.S. stock market is of great significance to Geely's globalization path.

In the words of An Conghui, President of Geely Holding Group, Chairman of Geely Automobile Group, and CEO of Zeekr Intelligent Technology, "Our chairman told us from the beginning that it is necessary to go global to enter the automotive industry. As a global brand, ZEEKR has to face the global market and global users, and this strategic arrangement has already been decided at the place where the brand is created. We are committed to long-termism, not just looking at the current IPO valuation, we hope that through the strategic implementation of the IPO, we can further improve the global standard governance of ZEEKR, have more transparent management, better participate in the global market, comply with global regulations and standards, and win users through our own products and technology capabilities."

Geely's determination to go global can be seen from its acquisition of Volvo in 2010 and Lotus in 2017, as well as its continued promotion of the listing of different brands. ZEEKR's recent listing on the U.S. stock market also makes it the ninth subsidiary of Geely Holding to be successfully listed, the other eight are: Geely Automobile, Volvo, Polestar, ECARX, Qianjiang Motorcycle, Hanma Technology, Lifan Technology, and Lotus. Recently, it was reported that Geely's Cao Cao Travel will also be listed on the Hong Kong stock market in the near future.

So why does Geely want to go global so much? This is about Geely's long-term planning and vision. We all know that no matter how individual countries obstruct it, the electrification and intelligence of automobiles have become an irreversible trend in the future.

Because of this, in response to Apple's abandonment of the car-making plan in the United States some time ago, and Mercedes-Benz in Europe to postpone its electrification goal, some industry insiders believe that this is the most wrong decision made by the two. Even Apple itself has some "regrets": Recently, it was reported that Apple has restarted its car-making plan, and the partner is a new car-making force in the United States.

Two

The electrification of automobiles is so important, how could Geely, which has 37 years of experience in car manufacturing, not know? It's just that if you just focus on the domestic market, then this "cake" will be divided one day, after all, China is leading in the world in terms of electrification transformation. In the first half of April this year, the penetration rate of new energy vehicles in mainland China exceeded 50% for the first time, and the penetration rate of new energy in overseas countries exceeded 20% during the same period. This shows that in terms of new energy, there is still huge room for growth in overseas markets.

The question is, why did Geely choose ZEEKR to achieve its globalization goals? This is because ZEEKR can be said to be the power of Geely for decades, through the continuous iteration of brands such as Geometry and Lynk & Co, the technology accumulation and brand formed by Geometry, Lynk & Co and other brands, so it is also closer to the market and more flexible in terms of marketing play, and correspondingly, the tasks and pressures it carries will be heavier.

Some people may wonder: Geely has eight companies successfully listed before, some of which are also listed overseas, why is it said that the listing of Zeekr is of great significance to Geely's globalization? This is because ZEEKR is Geely's first independent brand to land on the NASDAQ in the United States. The other eight successfully listed subsidiaries are either overseas car companies directly acquired by Geely, such as Volvo and Lotus, or backdoor listings, such as ECARX, Hanma Technology, Qianjiang Motorcycle and Lifan Technology.

In this analysis, in fact, only the recently listed ZEEKR is not only an independent brand cultivated by Geely itself, but also a real going out (listed on the New York Stock Exchange in the United States), so the listing of ZEEKR overseas is indeed of great significance to Geely's globalization.

Three

From a series of actions of ZEEKR, we can indeed see that it plays a very key role in the process of Geely's globalization. For example, ZEEKR said, "In 2024, ZEEKR will not only enter the luxury market of 8 European countries, but also enter the markets of 50 countries and regions such as Southeast Asia, the Middle East, South America, and Australia, and the globalization strategy will be fully accelerated."

This can also be seen from the purpose of this financing mentioned in the ZEEKR prospectus: about 45% will be used to develop more advanced pure electric vehicle technology and expand product portfolio, about 45% will be used for sales, marketing and expansion of service and charging networks, and only about 10% will be used for general corporate purposes, including working capital needs, to support business operations. In other words, about 90% of the financing of ZEEKR's listing will be used for the research and development of electric vehicle products and technologies, as well as the construction and improvement of energy supplements, services and other related supporting facilities.

Of course, this is not only for the domestic, after all, in the country, ZEEKR has been relatively perfect in these aspects. According to the prospectus data, as of December 31 last year, ZEEKR had 24 ZEEKR centers, 240 ZEEKR spaces, 31 ZEEKR delivery centers and 45 ZEEKR houses in China. As of December 31 last year, ZEEKR has 882 charging stations, covering more than 130 cities in China, in addition to more than 54,000 third-party supported charging stations, covering more than 340 cities across the country, with a total of about 610,000 charging piles.

Therefore, if we combine ZEEKR's plan to expand the market in many overseas countries in 2024 and the use of ZEEKR's listing and financing, then it is almost certain that ZEEKR's listing in the US stock market this time is largely to further promote Geely's globalization.

Some industry insiders believe that the listing of ZEEKR on the New York Stock Exchange has three main purposes: first, financing, which may be the most minor at the moment; The second is to strengthen governance, that is, through the strategic implementation of the IPO, An Conghui said, to further improve the global standard governance of ZEEKR, so as to "better participate in the global market"; The third is to enhance the brand reputation, after all, in the overseas market that ZEEKR is about to enter this year, the value brought by the title of "listed company on the New York Stock Exchange" may not be comparable to any amount of marketing.

In short, the recent listing of ZEEKR on the New York Stock Exchange is Geely's latest and most representative attempt to achieve globalization. After all, as a luxury pure electric smart brand under Geely, ZEEKR does have great potential to become a global high-end brand.

It's just that if Geely wants to achieve globalization, the successful listing of ZEEKR is only the "first step of the Long March", after all, the title of "NYSE listed company" alone is far from enough to make ZEEKR "rampage" in the overseas market.

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