Zeekr is on the market, but it doesn't seem like life is so easy.
A few days ago, ZEEKR Automobile was officially listed on the New York Stock Exchange in the United States with the stock code "ZK", becoming the first Chinese automobile company listed on the U.S. stock market this year, and it is also another Chinese new energy vehicle company listed in the United States after "Wei Xiaoli" and Lotus.
As the "fastest IPO car-making new force", it took only 37 months from the brand release to the listing, and its market value is almost close to Xiaopeng, but despite this, the market value of ZEEKR is far lower than the previous market valuation.
At the same time, a number of ZEEKR employees complained on social platforms about the huge stock pit when they joined the company, and compared with the previous round of financing, ZEEKR's IPO valuation was almost halved.
Whether it is intelligent driving R&D, marketing, or the more you sell, the more you lose, you are in a dilemma, and the life of ZEEKR after listing is not very easy.
01. Bleeding on the market, the more you sell, the more you lose
According to ZEEKR's official news, the funds raised from the IPO are mainly used in three aspects, about 45% of which are used to develop more advanced electric vehicle technology and expand the product portfolio; About 45% is used for sales and marketing, as well as the expansion of ZEEKR's service and charging network; About 10% is used for general business purposes.
Although the market value of ZEEKR showed a significant increase in the market value on the day after its listing, this still could not hide the fact that it was "bleeding on the market".
In fact, ZEEKR was originally scheduled to be listed at the end of last year, but because the valuation was less than expected, it was decided to suspend the IPO, but in the end, ZEEKR Haai chose to bow its head, even if the valuation was cut by more than 6%, it still chose to go public.
This shows one point: ZEEKR can't wait to go public.
Seeing the slowdown in the development of the global pure electric vehicle industry, their future prospects are in doubt, and even the capital market has begun to gradually change its attitude, the ideal fell by 50%, Weilai, Xiaopeng fell by nearly 90%, only as soon as possible to go public is the safest, but this wave, offended the equity of the employees.
The more new energy vehicles are sold, the more they lose, which is the common status quo of new domestic forces.
Judging from the financial report data alone, ZEEKR is still in a state of loss.
From 2021 to 2023, ZEEKR's annual revenue will be 6.528 billion yuan, 31.899 billion yuan, and 51.673 billion yuan respectively, and the losses will be 4.514 billion yuan, 7.655 billion yuan, and 8.264 billion yuan respectively, with a cumulative loss of more than 20 billion yuan in three years.
Difficulty in making a profit is the main dilemma of all new energy vehicle companies.
For these new forces, brand building and new model development, offline delivery center laying, charging network popularization, etc., need to continue to invest a lot of money in the early stage.
However, NIO and XPeng have continued to raise quite abundant cash flow thanks to the capital market, and by the end of 2023, NIO and XPeng had cash and cash equivalents of 57.3 billion yuan and 45.7 billion yuan, respectively.
In contrast, ZEEKR is only 3.26 billion yuan, combined with more than 8 billion yuan of R&D investment in 2023, even if it is backed by Geely, the financial pressure is also huge.
In terms of delivery volume, ZEEKR's revenue is growing, and the delivery volume of ZEEKR in 2022 will be 71,941 vehicles, exceeding the annual delivery target of 70,000 vehicles; Cumulative deliveries in 2023 reached 118685, a year-on-year increase of 65%.
However, despite the continuous growth of revenue, ZEEKR has also been facing high R&D costs and fierce market competition, making it difficult to achieve self-profitability.
One of the biggest reasons is that the product line of ZEEKR is relatively niche and chaotic, such as starting from hunting vehicles, and only beginning to return to the mainstream household market in 007 (the fifth model), as of the end of April this year, the cumulative delivery of ZEEKR vehicles exceeded 240,000 units, still lagging behind its peers.
The funds raised by this IPO can greatly alleviate the financial pressure, but after the successful listing, the profit pressure of ZEEKR also followed, after all, it is responsible for its own investors and employees who have equity.
02. Geely's "reopening", where will Zeekrypton go
ZEEKR was born from Geely, but it needs to "say goodbye" to Geely.
It is reported that ZEEKR CEO An Conghui set the future goal of ZEEKR as "sales of 650,000 units in 2025" and "the top three global luxury electric vehicle brands", and the task is very difficult to achieve these two goals at the same time.
Last year, ZEEKR was able to achieve a gross profit margin of 15% thanks to the mature supply chain system of its parent company Geely and the help of manufacturing plants.
As the biggest reliance of ZEEKR, Geely's 5-year achievement of 10 billion yuan - SEA's vast architecture is the proudest achievement of ZEEKR, which is not possessed by other new forces, and it is also the biggest advantage of ZEEKR.
It is worth noting that ZEEKR has been independent from Lynk & Co since March 2021, but the controlling shareholder of ZEEKR, Zhejiang ZEEKR Intelligent Technology, is still Geely Holdings, so the expenses and diluted net loss since the establishment of ZEEKR are all from Geely's blood transfusion.
In Geely's eyes, the new energy market is a huge piece of cake.
Previously, Geely has also incubated new energy market brands such as Geometry and Ruilan, but none of them have set off too much turmoil, only ZEEKR has successfully come out of the circle, and with Geely's continuous blood transfusion of ZEEKR, it can also be seen its attention and determination to the new energy vehicle market.
On the one hand, Geely must seize the east wind of the new energy market, because the domestic traditional car companies are expanding rapidly after incubating new energy brands, and Geely has long lagged behind its peers in the continuous failure of the first few brands; On the other hand, the rising stars have landed in the capital market early, and Geely is lagging behind in both its layout and business model.
Under double pressure, Geely chose to "reopen".
In February 2023, Geely Automobile established a new new energy sub-brand, Geely Galaxy, which is under the Geely Automobile brand, and is the same as Zeekr in terms of technology investment and marketing methods.
It is reported that Geely Galaxy's main business is the mass market of less than 200,000 yuan, and it has quickly achieved good results with Geely's technical heritage and mature channels, and Galaxy E8, Galaxy L6 and L7 have good sales.
At the recently concluded Beijing Auto Show, Galaxy also unveiled a new product - full-size SUV Galaxy Starship.
This is bound to be a good thing for Geely, the parent company, but for Zeekr, the resources of the parent company are not unlimited.
As Geely holds a large number of new energy vehicle brands such as Geometry, Galaxy, Lynk & Co, Zeekr, Ruilan, and Jiyue (formerly Jiji), and has poured a lot of resources, which will directly eat into Geely's own profit level, in the 2023 interim report, Geely has increased significantly in distribution and sales expenses.
In this regard, Geely Automobile's explanation is: affected by the construction and operation of ZEEKR's direct sales channels.
Although Geely is also constantly transfusing Zeekr, it can be found that based on Zeekr's recent price reduction measures and target strategies, Zeekr did not choose to increase investment in technology and stabilize its high-end image, but took the initiative to lower its price range and began to transition to the 200,000 price segment that pays more attention to cost performance.
With such a future plan that runs counter to the vision, and a strategic layout that is eager to reduce prices for sales, it is difficult for the capital market to continue to be optimistic about ZEEKR.
Reference:
The "rich second generation" extreme krypton, after the glory, he always has to grow up alone - Blue Whale Finance
Dream of IPO, ZEEKR will be double happy in 2024? - Extreme Daily
ZEEKR "leaned over" to be listed - Photon Planet
Xiaomi slashed the extreme krypton - Wei Ran took the lead