Zeekr to go public, with the China-based EV maker valued at more than $5 billion

By Tomi Kilgore

Early NYSE indications have the stock, with the ticker ‘ZK’, soaring roughly 30% out of the gate

Investors will have another way to ride the electric-vehicle sector on Friday, as China-based Zeekr Intelligent Technology Holding Ltd. is set to go public with a market valuation of more than $5 billion.

The company, based outside Shanghai in the city of Ningbo, said Friday that it raised $441 million, as its upsized initial public offering of 21 million American depositary shares (ZK) priced at $21 per ADS.

Early indications from the New York Stock Exchange point to a big rally out of the gate.

The pricing was a sign of strong investor demand. Zeekr had previously said it would offer 17.5 million ADSs in the IPO, which was expected to price between $18 and $21 per ADS.

Each ADS represents 10 ordinary shares. With 2.44 billion ordinary shares expected after the offering, the IPO pricing values the battery-electric-vehicle company at about $5.13 billion.

For comparison, U.S.-based EV maker Tesla Inc.’s (TSLA) market capitalization was about $539.5 billion in midday trading Friday, Rivian Automotive Inc.’s (RIVN) was about $9.9 billion and Nikola Corp.’s (NKLA) was valued at about $739 million.

The stock will begin trading on the NYSE on Friday under the ticker symbol ZK.

The stock was recently indicated to open around $26.50 to $27.50, or 26.2% to 30.9% above the IPO price. At the midpoint of that range, Veekr would have a market value of about $6.6 billion.

The lead underwriters of the IPO were Goldman Sachs, Morgan Stanley, BofA Securities and CICC.

The company said it plans to use about 45% of the proceeds from the IPO to develop more BEV technologies and expand its product portfolio. Another 45% will be used for marketing and expansion of its charging network. The rest will be used for general corporate purposes.

The company recorded a net loss of 8.26 billion yuan (equivalent to $1.16 billion) on revenue of 51.67 billion yuan ($7.28 billion) in 2023, after a loss of 7.66 billion yuan on revenue of 31.90 billion yuan in 2022.

At the end of 2023, the company had cash and cash equivalents of 3.26 billion yuan ($459.3 million) and inventory valued at 5.23 billion yuan ($736.4 million).

Zeekr’s BEV product line is includes the Zeekr 001, a five-seater crossover hatchback released in April 2021, with deliveries beginning in October 2021.

There is also the Zeekr 009, a luxury six-seater multipurpose vehicle that was launched in November 2022. Deliveries of the Zeekr 009 began in January 2023.

And there’s the Zeekr X, a compact sport-utility vehicle launched in April 2023, with deliveries beginning in June 2023.

Zeekr is going public at a time of lackluster investor enthusiasm in the EV sector and for IPOs. The Global X Autonomous & Electric Vehicles exchange-traded fund DRIV has slipped 2.4% year to date and the Renaissance IPO ETF IPO has edged up 2%, while the S&P 500 index SPX has gained 9.4%.

-Tomi Kilgore

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05-10-24 1135ET

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