Zeekr’s stock soars, valuing the China-based EV maker at more than $6.5 billion

By Tomi Kilgore

Zeekr raised $441 million, well above expectations, as the upsized IPO priced at the top of the expected range

China-based Zeekr Intelligent Technology Holding Ltd. received a rather warm reception on Wall Street on Friday, as the electric vehicle maker’s newly minted shares soared on their public debut to push the company’s market valuation well above $6 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 priced at $21 per ADS. The lead underwriters were Goldman Sachs, Morgan Stanley, BofA Securities and CICC.

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 $538.9 billion in midday trading Friday, Rivian Automotive Inc.’s (RIVN) was about $9.9 billion and Nikola Corp.’s (NKLA) was valued at about $733 million.

That strong demand was confirmed, as the first trade of the stock on the NYSE was at $26 at 12:09 p.m. Eastern for 1.26 million shares.

At the opening price, Zeekr was valued at $6.35 billion. With the stock rising further since its open, to be up 30.4% in midday trading, the company was being valued at $6.68 billion.

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 interest in the EV sector and for IPOs. The Global X Autonomous & Electric Vehicles exchange-traded fund DRIV has slipped 2.7% year to date and the Renaissance IPO ETF IPO has edged up 1.9%, while the S&P 500 index SPX has gained 9.4%.

-Tomi Kilgore

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05-10-24 1232ET

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