Produced by | Bullet Finance
Author | Geisha
Edit | lightning
American Editor | Qianqian
Audit | Ode
If you set a key word for ZEEKR: the outside world will call it "fast". This smart mobility technology company, which has only been established for three years, is the most growing global automotive technology company. And this brand, which is independent from traditional car companies, is also one of the car brands with the fastest sales growth in the field of new energy.
Now, it's on its way to the market. From its release on April 15, 2021 to its listing, it took only three short years. In comparison, Tesla took 7 years, Xpeng Motors 6 years, Li Auto 5 years, and NIO 4 years. ZEEKR has become the fourth new Chinese car-making force to go public in the United States after "Wei Xiaoli".
The secondary market has reacted enthusiastically to ZEEKR. Yesterday, ZEEKR ushered in the second trading day of listing on the New York Stock Exchange in the United States, with an opening price of $30 per share, up more than 6% from the close of the previous trading day, and a sharp increase of nearly 43% from the issue price, with a market value of $7.5 billion.
The speed of ZEEKR has been the most intuitive data display in the secondary market, which also means that the recognition of capital in the new energy market is further deepening. However, in the smoke of the new energy market, listing does not mean that ZEEKR can stop, but it must take listing as a starting point and enter the next "practice".
1. ZEEKR has dropped a "bomb" for the new energy market
Different from the hot investment in new energy when "Wei Xiaoli" was listed, the background of ZEEKR's listing is that the market has returned from fanaticism to calm.
Looking at the overall changes in the market, with the advancement of electrification to intelligence, new technologies are rapidly iterating every day, and at the same time, the fierce competition has made the entire automobile market confused, and the growth of market sales has been affected by the smoke of price wars. This has led to the advent of the brutal knockout round, and some new leading car-making forces have also felt the chill.
As we all know, car manufacturing is an asset-heavy business, selling cars at a loss is a threshold that most new power companies must cross, in the context of the intensifying price war, among the domestic new energy car companies, in addition to BYD and ideal, Weilai, Xiaopeng and many other car companies are still stuck in the quagmire of losses.
However, unlike other new car-making forces, ZEEKR has relied on the "giant" of Geely Holding Group since its birth, and with the blessing of heavy asset empowerment, the ZEEKR brand can devote more energy to R&D, products, channels, and services. Moreover, this model also gives ZEEKR the confidence to gain a foothold in the new energy market.
At the same time, Xiaomi, which announced that it was building a car, was building a factory, and Zeekr had launched a variety of models, including 001, 007, 009, X, etc. As Geely mentions in the prospectus, "We rely on and profit from Geely Group's technology, R&D, vehicle production and delivery, procurement capabilities, as well as its financial support and market position." ”
Thanks to Geely's support, ZEEKR started its first delivery in October 2021 and delivered 6,007 vehicles in 2021, so vehicle sales revenue accounted for a relatively low proportion of annual revenue. In 2022 and 2023, ZEEKR will deliver 71,941 vehicles and 118685 vehicles, quickly ranking among the first echelon.
According to the prospectus, from 2021 to 2023, ZEEKR's automobile sales revenue will increase rapidly, reaching 1.54 billion yuan, 19.67 billion yuan, and 33.91 billion yuan respectively, accounting for 23.6%, 61.7%, and 65.6% of the total revenue respectively.
The overall gross profit margin is one of the important indicators to measure its development, and the gross profit margin of ZEEKR from 2021 to 2023 will be 15.9%, 7.7% and 13.3% respectively. As a comparison, in 2023, the gross profit margins of NIO, XPeng, Ideal, and Tesla will be 9.5%, -1.6%, 21.5%, and 18.2%, respectively. ZEEKR's gross profit margin remained at a high level.
This force has been leading ZEEKR forward. In the first four months of this year, ZEEKR sold nearly 50,000 vehicles, more than doubling year-on-year, and won the first place among Chinese brands in the high-end pure electric market of more than 200,000 yuan.
It can be said that the early ZEEKR was a blockbuster "bomb" dropped by Geely on the new energy market, but with the listing of ZEEKR, it also proves the correctness of Geely's strategy in the new energy market, which means that traditional car brands are breaking through the inherent prejudice and moving towards a larger market.
2. Use products to drive the brand
When An Conghui, President of Geely Holding Group and CEO of Zeekr Intelligent Technology, was asked by the media about his views on the era of "traffic is king", he still insisted that as the "No. 1" position of a car company, he needed to spend more of his time on products, technology, and business.
Technology persistence and R&D investment are the key to overtaking in the corners of ZEEKR and setting a new "ZEEKR speed".
According to the prospectus data, from 2021 to 2023, ZEEKR's research and development expenses will be 3.16 billion yuan, 5.45 billion yuan, and 8.37 billion yuan respectively, with a total of 16.97 billion yuan in three years. Another noteworthy data is that, according to the prospectus, about 45% of the net proceeds raised from the ZEEKR IPO will be used to develop more advanced pure electric vehicle technology and expand the product portfolio, and R&D investment is still the majority of financing.
In the "real money" to research and development, ZEEKR self-research innovation has achieved remarkable results, the world's first mass production of four-motor distributed electric drive, the industry's first mass production of ZVC four-wheel torque vectoring technology, the introduction of the world's first large-scale integrated die-casting L4 intelligent production line, leading the transformation of the car-making process.
What's more worth mentioning is the SEA vast architecture, which is the pure electric platform architecture released by Geely Group on September 23, 2020, the research and development of the SEA vast architecture lasted four years and invested 20 billion yuan, which is a platform specially built for the production of pure electric vehicles. The R&D and launch of this architecture was led by An Conghui, then president of Geely Holding Group, who has also served as the CEO of Zeekr since the establishment of the Zeekr brand.
The emergence of the vast architecture means that ZEEKR can realize the route of architecture-based car manufacturing, which can not only help ZEEKR improve R&D efficiency, "build fast and build well", but also give full play to its large-scale advantages with the enrichment of models and the increase of sales, and achieve the purpose of rapid profitability.
Therefore, technology has given ZEEKR the confidence to polish and find new ways in product research and development. ZEEKR's first car, the 001, is a hunting vehicle, and in China, the market share of hunting station wagons is as low as 1% all year round.
The launch of ZEEKR 001 has subverted this market segment, and since the delivery of the first model ZEEKR 001 in October 2021, this luxury hunting coupe with an average order value of more than 300,000 yuan has been the main sales force of ZEEKR.
And in 2023, for every 10 hunting models sold in China, at least 6 units are ZEEKR 001. After the launch of the new ZEEKR 001 this year, the cumulative large orders have reached nearly 40,000.
Since its establishment, ZEEKR has launched five models, including ZEEKR 001, ZEEKR 009, ZEEKR X, ZEEKR 007, etc., covering multiple market segments. It is worth mentioning that among the more than 240,000 units that have been delivered, ZEEKR batteries have achieved zero spontaneous combustion, and its rigid body is known as "Highway Tenterkr".
In addition, around the service and infrastructure of products, ZEEKR has not been neglected. For example, in terms of user ecological construction, ZEEKR adheres to the direct sales model and insists on self-construction and energy supplementation. For another example, in terms of energy replenishment system, ZEEKR currently produces 800 volts for all models, and its gold brick battery is also the world's leading 800 volt lithium iron phosphate battery in mass production charging speed, and as of the end of April, the number of ultra-fast charging piles exceeded 2500.
3. Be the fastest long-termist
As the price war intensifies and the competition in the new energy vehicle industry continues to intensify, the development of new energy vehicle companies will be full of difficulties and obstacles. However, behind the price war is actually a competition of comprehensive strength such as core technology, scale, supply chain and cost control.
Another implication of the price war is that if a car company is not profitable for a long time, it will be considered unsustainable. In other words, the current evaluation of auto companies in the capital market has begun to return to fundamentals such as earnings indicators.
Looking at the prospectus, ZEEKR has been in a state of net loss in the past three years, with net losses of RMB 4.514 billion, RMB 7.655 billion and RMB 8.264 billion from 2021 to 2023, respectively.
But the loss is temporary. As of the end of April 2024, from the perspective of profitability, the gross profit margin of the whole vehicle in the first year of ZEEKR's establishment is positive, and the gross profit margin in 2023 will be as high as 15%. At the same time, 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 the red herring version of the prospectus submitted by ZEEKR, the IPO will issue 17.5 million ADS (American Depositary Shares), each ADS corresponds to 10 ordinary shares. On May 9, ZEEKR announced that its initial public offering was priced at $21 per share, at the upper end of the pricing range, raising a total of $441 million.
On the one hand, this data confirms the market's recognition of the continuous growth of ZEEKR's sales, and its market performance shows that ZEEKR has entered the first echelon in the field of new energy vehicles. On the other hand, it means that the market is full of confidence in ZEEKR, with the improvement of models and the reuse of technology, its future marginal benefits will achieve a higher level, and the three-electric industry chain ecology built around ZEEKR has broader prospects.
In addition, judging from the prospectus, about 45% of the funds raised from the listing of ZEEKR will be used to develop more advanced pure electric vehicle technology and expand the product portfolio; About 45% will be used for sales, marketing and expansion of the service and charging network; Approximately 10% will be used for general corporate purposes, including working capital needs, to support business operations. The core goal of where these funds are going is to make a profit.
At the same time, the listing can create an independent window for the ZEEKR brand itself to connect with the global market.
In 2024, ZEEKR's overseas territory in Europe will increase to 8 countries, and it plans to enter most of Western Europe in 2026, and simultaneously enter emerging markets such as Southeast Asia, the Middle East, and South America, and is expected to launch sales in 50 countries by the end of this year. The expansion of overseas markets means that ZEEKR will usher in greater incremental space, which also writes a successful footnote to its profitability.
The development of new energy is like a "tornado", and ZEEKR is a special case in this storm of new and old energy conversion, which takes the lead in the fierce competition, but the listing is not only an important milestone, but also a new starting point and a new opportunity.
As Li Donghui, CEO of Geely Holding Group, said: The ZEEKR IPO is a microcosm of Geely Holding's overall strategic plan. "Through the IPO, we have increased the transparency and standardization of corporate governance, enhanced the independence and integrity of the operation and accounting of our sub-business groups, improved operational efficiency, and better communicated with users, industries, regulators and investment institutions in a responsible manner, so as to promote global compliance governance of enterprises."