"ZEEKR originally planned to raise $1 billion, with a valuation of more than $10 billion."
On the evening of May 10, Beijing time, ZEEKR was listed on the New York Stock Exchange in the United States with the stock code "ZK", with a maximum valuation of $5.13 billion, and raised about $441 million at a price of $21 per share. On the first day of trading, the stock price rose 34.57% to close at $28.26 per share, with a total market capitalization of $6.997 billion.
This should have been good news, but public opinion has shown a mixed trend. Some industry insiders pointed out that ZEEKR originally planned to raise $1 billion with a valuation of more than $10 billion, but the final result was "cut in half".
There is a view that the valuation is not as good as expected and is related to many factors such as product sales, market situation, and consecutive losses. In addition, the recent delivery of ZEEKR 007 has also made a lot of discordant voices under the good news of delivery.
The valuation has been cut in half, why did ZEEKR "go against the wind"?
Before the analysis begins, let's briefly introduce ZEEKR Automobile: as a high-end electric vehicle brand under Geely Automobile, ZEEKR is jointly invested and established by Geely Automobile and Geely Holding Group, mainly engaged in R&D and sales of electric vehicles, new energy vehicle batteries and other components under the ZEEKR brand.
Since the establishment of ZEEKR Automobile, it has launched a product matrix including ZEEKR 001, ZEEKR 009, ZEEKR X, ZEEKR 007 and ZEEKR MIX, with sales of 6,007 units in 2021, 71,941 units in 2022, and 118685 units in 2023.
Previously, ZEEKR had announced a number of brand goals: in 2024, ZEEKR's annual sales will reach 230,000 units; Become the No. 1 pure electric brand with sales of more than 200,000 yuan; ZEEKR 007 sales surpass Tesla Model 3, and strive to turn losses into profits in 2024; By 2025, ZEEKR sales will reach 650,000 units.
Judging from the current sales performance, it is still difficult for ZEEKR to achieve the goal of 230,000 units. From January to April 2024, ZEEKR delivered a total of 49,148 vehicles. In order to achieve this goal, it will need to sell about 22,500 units per month in the future.
But what is more difficult than achieving sales is turning a profit. Looking at the entire new energy market, only Tesla, BYD, and Ideal are three new energy vehicle companies that have achieved profitability.
From 2021 to 2023 (hereinafter referred to as the reporting period), ZEEKR achieved revenue of 6.528 billion yuan, 31.9 billion yuan, and 51.67 billion yuan respectively; the net loss was 4.514 billion yuan, 7.655 billion yuan and 8.264 billion yuan respectively; Gross profit margins were 1.8%, 4.7% and 15.0%, respectively.
Although the gross profit margin continues to improve, the high R&D expenses continue to put pressure on ZEEKR.
During the reporting period, ZEEKR's R&D expenses were 3.160 billion, 5.446 billion and 8.369 billion yuan respectively, a year-on-year increase of 72.3% and 53.67%. In addition, sales and administrative expenses were 2.2 billion yuan, 4.245 billion yuan and 6.92 billion yuan respectively, and the asset-liability ratio was 92.22%, 130.67% and 132% respectively.
According to the prospectus, as of the end of 2023, the amount of cash and cash equivalents of ZEEKR is 3.26 billion yuan, which is not even half of its R&D investment in 2023. An industry analyst said: "The pressure of capital and debt is an important reason for ZEEKR to seek listing, but due to continuous losses, the valuation of ZEEKR listing has not met expectations." ”
The resumption of the IPO has not yet achieved the expected goal
The sense of urgency of "lack of money" is reflected in many details of ZEEKR's listing.
Before the IPO, ZEEKR completed two rounds of equity financing, of which the Pre-A round of financing amounted to US$500 million, and Intel Capital, Boyu Investment, Bilibili, Hongshang Group, and CATL each invested US$100 million; The Series A financing amount is US$750 million, and Mobileye, Commerce Gene, Quzhou Xin'an Intelligent Manufacturing Fund, Yuexiu Industrial Gene, and CATL have bet on it.
With the support of a group of star capital, Dai Qing, senior vice president and CFO of Geely Automobile Group, announced the valuation of ZEEKR after the A round of financing at Geely Automobile's 2023 interim results meeting, which is $13 billion.
In this context, at the end of 2023, ZEEKR submitted an IPO prospectus to the United States, and plans to obtain $1 billion in financing, with a valuation of more than $13 billion. But the IPO was suspended a month later. According to relevant sources, the main reason is the mismatch of valuation expectations.
It didn't take long for ZEEKR to regain its strength, and finally ushered in the glory of ringing the bell on May 10. For the expected valuation, An Conghui, CEO of the ZEEKR brand, said at the communication meeting after ringing the bell: "This IPO is strategic, ZEEKR is a global brand, born to face the global market, in the face of global capital, users, technology, the United States is the convergence of global capital, optimistic about new energy vehicles, this strategy determines our long-termism, not just look at the valuation and price of the IPO." This can improve the more transparent management of ZEEKR Global and better participate in global competition. ”
In terms of the use of the funds raised, ZEEKR said that about 45% 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.
Competitive pressures continue to mount
There is a view that the valuation of ZEEKR listing is less than expected, and there are already traces to follow.
The first is that the market environment is not good, and investors' confidence in new energy vehicles has declined. According to China Automotive News, in April 2024, global stock markets generally underperformed, with only 8 of the 30 major stock market indices reporting positive returns. Specific to the main traditional vehicles and dealers in China, there are 11 gainers, accounting for about 35%, down from 58% in March; There were 20 companies with a month-on-month decline in market capitalization, accounting for about 65%, and the overall pressure was obvious.
The second is that the sales structure of ZEEKR has signs of "one-legged walking". Looking back on the past three years, although ZEEKR has launched a number of products, in 2023, ZEEKR 001 will account for about 65% of the overall sales, and it will not be until 2024 that ZEEKR 007, which is basically the same as ZEEKR 001 sales, will appear.
Thanks to the hot sale of ZEEKR 007, ZEEKR delivered 16,089 units in April, a year-on-year increase of 99% and a month-on-month increase of 24%. Lin Jinwen, vice president of ZEEKR, once said: "ZEEKR has its own small goals internally, and this year, a single model ZEEKR 007 will surpass the sales of Tesla Model 3. ”
In 2023, Tesla Model 3 sold 147,270 units for the year. Judging from the current delivery situation of ZEEKR 007, it is difficult to catch up with Tesla Model 3.
In addition, some industry insiders said: "It still takes time to verify whether ZEEKR 007 can become a new leader." From the point of view of the price range, there are many competing models in the 200,000-yuan pure electric car segment where ZEEKR 007 is located, in addition to strong competitors such as NIO and Xiaopeng, it also faces popular products such as Tesla Model 3 and Xiaomi SU 7. ”
The third is the issue of price competition. In the face of increasingly fierce competition in the new energy market, many car companies have started a round of "price war" to increase their market share. According to the statistics of Cui Dongshu, secretary general of the passenger association, in the first quarter of this year, more than half of the 34 pure electric models that chose to reduce prices were reduced by more than 10%, with the largest reduction of 22.2%.
However, on April 21, ZEEKR said that it would not follow up on the price reduction or additional allocation actions of its friends. Lin Jinwen, vice president of ZEEKR, pointed out that when the 001 and 007 products were released, they had fully predicted the market competition environment in 2024, and formulated a very competitive price, version, and configuration.
In this regard, Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology and a visiting professor at the Yellow River Institute of Science and Technology, said in an interview with the media: The average sales volume of ZEEKR per month is less than 20,000 units, and it cannot reach the absolute moat. In the short term, the price can be kept non-reduced, but if the sales volume is affected for a long time, the price will still be reduced.
The delivery issue brought about public opinion
Compared with long-term goals such as hot sales of products and turning losses into profits, ZEEKR still has more immediate problems to solve.
In March 2024, #极氪007大范围交付延迟#的话题冲上微博热搜, the data showed that the number of views was 4.702 million, and another topic #Extreme Krypton received a large number of complaints# had a whopping 24.777 million views.
According to relevant media reports: Some citizens reported that before New Year's Day, they purchased a 007 model new energy car and paid a deposit of 5,000 yuan, and the staff responsible for delivery said that it could be delivered around the end of January. But I didn't expect that after the Spring Festival, there would be frequent accidents and continuous delays in delivery.
There are also many consumers who said that the staff of ZEEKR agreed to refund the balance paid, but for the deposit of 5,000 yuan, it was clearly stated that it could not be refunded.
Judging from the complaint platforms, problems such as delayed delivery and non-refundable deposits have not been fully resolved.
On April 20, a consumer said on the complaint platform of the car quality network: "On February 20, 2024, I paid a deposit of 5,000 yuan for the car and ordered a ZEEKR 001 car. ZEEKR refused. And cancel the order, this belongs to the overlord clause, I ask ZEEKR to refund the deposit. ”
In this regard, the ZEEKR manufacturer replied: In this case, our company has arranged for relevant departments to verify the customer feedback phenomenon, and will continue to pay attention to the progress of quality management in the future.
On April 27, another car owner said: "ZEEKR company, when I placed an order, it was advertised that the car was delivered in strict accordance with the order of the lock order, but it was later than me to place a single quality and lock the order, many people picked up the car, and my order has not yet been clicked on the network, and it is suspected that I deliberately delayed the delivery of my order, and asked for an explanation immediately, explaining that the compensation apologizes, refunds or deliveries." ”
On April 28, a consumer said on the black cat complaint platform: "The contract stipulates that the vehicle shall be delivered at the fixed time, but now there is a large number of car pick-up queues. ”
Under the good news of the short video announcing the listing of ZEEKR, some netizens commented: "Has the problem of chaotic and slow delivery been solved, it has been seven weeks." ”
Conclusion: The listing of enterprises should be a good way to raise funds and enhance their influence. However, from the outside, ZEEKR's valuation and fundraising are less than expected; From an internal point of view, issues such as products and delivery still need to be sorted out. Although it has been listed, is ZEEKR really ready?