Chinese electric vehicle maker Zeekr Intelligent Technology updated its prospectus filing last week, laying out the details and targets for its proposed U.S. IPO.
Here are 5 key things investors must know:
Firstly, Zeekr is seeking to raise $315 million to $423M, and will offer 17.5M ADS or 20.1M if over-allotment is fully exercised at a price range of $18-$21 per share.
This implies a market value of $4.4 billion to $5.2B or enterprise value of $4.8B to 5.6B. This puts the company at around a 60% discount to its last round of financing in February 2023, at which time it was valued at $12.5B.
Coming to the ownership of the company, at present Geely Auto (GELYY) holds the majority stake at 54.8%, and is expected to retain majority ownership after the IPO.
“We expect Geely will maintain majority ownership of Zeekr post-IPO. Zeekr attempted to get listed back in December 2023, but the deal did not go through due to insufficient interest. This time around, Geely Auto, Mobileye, and CATL have indicated interest to subscribe up to US$349mn of Zeekr’s IPO,” said analysts in a note.
Zeekr, which was launched in 2021, currently offers four models: Zeekr 001 (a mid-large sized sedan priced from RMB 269k), Zeekr 009 (a mid-large sized MPV priced from RMB 500k), Zeekr X (a compact SUV priced from RMB 190k), and Zeekr 007 (a mid-sized sedan priced from RMB 210k).
Additionally, two more models are set to launch this year.
“Amid tough competition, Zeekr’s track record has been mixed with monthly deliveries averaged at 10k units in 2023, but sales momentum has seen pick up in recent months with the Zeekr 007 launch,” noted analysts.
Lastly, the company achieved 15% gross margin in 2023 (vs. 5% in 2022) and net loss margin narrowed to -16% in 2023 (vs. -24% in 2022). Zeekr expects to reach profit breakeven in 2024.
Bernstein is currently Outperform-rated on the stock with a price target of HKD 11.