Zeekr Intelligent Technology, the electric vehicle arm of Chinese automotive giant Geely Holding Group, plans to go public on the New York Stock Exchange under the stock ticker ZK.
Zeekr plans to issue 17.5 million American depository shares at a price of USD18 to USD21 apiece, with each ADR equivalent to 10 ordinary shares, according to the prospectus the new energy vehicle brand submitted on May 4. Goldman Sachs, Morgan Stanley, Merrill Lynch, and China International Capital will be the initial public offering underwriters.
Geely’s unit Geely Automotive Holdings will subscribe to up to USD320 million worth of Zeekr’s ADS. Chinese battery giant Contemporary Amperex Technology and Intel-backed self-driving firm Mobileye Global, two other shareholders of Zeekr, also expressed interest in subscribing to the IPO.
Zeekr plans to use USD308.6 million of the listing proceeds to develop advanced EV technologies and expand its charging network, as well as for sales and marketing purposes, the company noted.
Geely and Geely Auto founded Zeekr in September 2020 and spun it off the following year. Zeekr completed a CNY500 million (USD69.1 million) Pre-A financing round in 2021 and a CNY750 million A round last year, raising money from CATL, Yuexiu Fund, Tongshang Fund Management, and Quzhou Xinan Zhizao Equity Investment Partnership. After the two fundraisers, Zeekr’s market value rose to USD13 billion but was only around USD5.1 billion in its IPO prospectus.
Zeekr would be the fourth Chinese NEV startup to go public in the United States after Nio, Xpeng Motors, and Li Auto. Zeekr posted a gross margin of 15 percent last year, compared with Li Auto at 22.2 percent, Nio at 10 percent, and Xpeng at minus 2 percent. Tesla’s gross margin was 19 percent in the period.
Listing in the US helps Chinese automakers go global by building an international corporate governance structure, according to industry analysts. However, the current market conditions and opportunities in the capital market are not the best, the analysts added, noting that the choice of going public also depends on whether a carmaker is seeking short-term financing or long-term development.
Zeekr’s income mainly comes from the sale of vehicles, motors, batteries, and electronic control systems, research and development, and other services.
Zeekr lost CNY4.5 billion (USD621.8 million) in 2021, CNY7.7 billion in 2022, and CNY8.2 billion last year, with revenues of CNY6.5 billion, CNY31.9 billion (USD4.4 billion), and CNY51.7 billion, respectively. The firm had delivered more than 240,000 vehicles as of April 30.
