The new car-making power king has arrived for IPO, and Zeekr's first day on the US stock market soar

Geely Automobile, China’s fourth new car-making force, ZK, was listed on the New York Stock Exchange last Friday (May 10), with an IPO price of $21, closing up 34.57% to $28.26, with a market value of over 6.40 billion dollars.

Since its establishment in 2021, Zeekr has knocked on the door of the US stock market in just three years, becoming the “fastest IPO in history” new energy vehicle force, demonstrating the speed of Zeekr.

However, compared with the achievements of Zeekr, Zeekr’s current market value is severely underestimated. Data shows that Zeekr continues to rank first in the sales volume of Chinese pure electric brands above 200,000, and the gross profit margin of the whole vehicle in 2023 is only second to Tesla in the high-end pure electric field. There is no doubt that Zeekr is currently in a valuation depression, and its future market value is worth looking forward to.

The fastest IPO new energy vehicle startup in history

In April 2021, the ZEEKR brand was officially released to the public; in August of that year, ZEEKR received Pre-A round financing from five ecological partners including Intel Capital, CATL Times, Bilibili, Hongshang Group and Boyu Investment, with an amount of $500 million.

In February 2023, Zeekr announced the completion of a $750 million Series A financing round. The investment was participated by five ecological partners, including Professor Amnon Shashua, founder and CEO of well-known autonomous driving technology company Mobileye, CATL Times, Yuexiu Industry Fund, Tongshang Fund, and Quzhou Xin’an Intelligent Manufacturing Fund.

Under the continuous optimism of various capital sources, Zeekr has been running all the way and went public on May 10, 2024, just three years after its establishment.

Zeekr successfully went public after only 3 years of establishment, setting a new record for the fastest IPO of a new energy vehicle company. In comparison, Tesla took 7 years, XPeng Motors took 6 years, Li Auto took 5 years, and NIO took 4 years.

Why has ZEEKR been able to achieve its current success so quickly?

Backed by Geely Holding Group, Zeekr combines the genes of traditional car companies and new forces, opening up a new development model and quickly experiencing an outbreak.

In terms of research and development, the core competitiveness of ZEEKR is the SEA Vast Architecture. As the world’s first pure electric architecture, the SEA Vast Architecture was built by Geely Holding Group after five years and an investment of 20 billion yuan. With the empowerment of Geely Holding Group, ZEEKR has this technical foundation since its establishment, which is an ability that other new car-making forces do not have.

Based on the SEA Haohan architecture, ZEEKR has rapidly launched a number of highly competitive products in the past three years. In 2021, ZEEKR delivered its first product, the luxury hunting coupe ZEEKR 001; in 2022, ZEEKR launched its first native pure electric luxury MPV 009; in 2023, ZEEKR successively launched the new luxury all-purpose SUV ZEEKR X and the first pure electric luxury sedan ZEEKR 007; in 2024, ZEEKR invested 7 billion yuan to develop the exclusive ZEEKR-M architecture based on the SEA Haohan architecture, and the family full-scenario large five-seat pure electric vehicle ZEEKR MIX based on this architecture was officially unveiled. These models have become benchmark products in their respective segmented markets. The rapid product iteration has supported the rapid increase in ZEEKR sales.

According to the data, Zeekr sold 6,000 vehicles in 2021, increased to 72,000 vehicles in 2022, and further climbed to 119,000 vehicles in 2023. In April of this year, Zeekr’s monthly sales reached a new historical high, with a year-on-year increase of 111% from January to April. Under this trend, Zeekr is confident in achieving its annual target of 230,000 vehicles this year. The explosive sales have also driven the rapid growth of Zeekr’s total revenue.

According to the prospectus, the total operating income of Zeekr in 2021, 2022 and 2023 were 6.50 billion yuan, 31.90 billion yuan and 51.70 billion yuan respectively, and the revenue in 2023 increased by 62% year-on-year.

From the perspective of delivery volume of single-vehicle models, many products of ZEEKR have become the sales champions in their respective sub-segments. For example, ZEEKR 001 has long been the sales champion of pure electric models above 300,000; ZEEKR 009 has become the sales champion of all categories of MPVs and the benchmark of the 500,000-level luxury MPV sub-segment market; ZEEKR X has become the sales champion of Chinese brands of compact models above 200,000 yuan.

From the perspective of overall delivery volume, 16,089 units were delivered in April 2024, a year-on-year increase of 99% and a month-on-month increase of 24%, reaching a new historical high. It will continue to be the sales champion of Chinese pure electric brands above 200,000 in 2024.

Data shows that in the first three weeks of April this year, ZEEKR surpassed Tesla’s competing products in sales of a single car model in China, and the sales of three provincial brands surpassed Tesla. ZEEKR is becoming a dark horse player in high-end pure electric vehicles.

It is worth noting that Zeekr’s unique business model has enabled it to continuously increase its gross profit margin while expanding its market share, achieving a good balance between high-speed growth and healthy operation.

In terms of vehicle gross profit margin, Zeekr’s vehicle gross profit margin reached 15% in 2023, surpassing NIO (10%) and Xiaopeng (-2%), and second only to Tesla (19%) in the high-end pure electric field. Zeekr’s vehicle gross profit margin has shown a continuous positive growth state, with 1.8% in 2021, 4.7% for the whole year of 2022, 14.8% in the first three quarters of 2023, and 15.3% in the fourth quarter of 2023, which is in sharp contrast to Tesla’s continuously decreasing gross profit margin.

At the Geely Automobile 2023 Performance Conference in March this year, Dai Yong, Deputy CFO of Geely Automobile Group, stated that under the premise of increasing sales and gross profit, ZEEKR will strive to achieve the goal of turning losses into profits in accordance with Hong Kong Financial Reporting Standards in 2024.

It can be seen that under the continuous good business performance, the long-term value of Zeekr is promising, and the listing will also be the best time to invest in Zeekr.

How should investors invest in their stocks?

By going public on the US stock market, Zeekr has stood at a brand new starting point, gained broader financing channels, and its market is also optimistic about its development prospects.

The knockout stage of China’s automobile industry has begun. In the face of fierce competition, no manufacturer can stand alone. At an industry sharing event in March this year, An Conghui summarized, “If Zeekr wants to succeed in the future, we cannot afford to make any mistakes this year. Once we make a mistake, we will lose everything.” Although Zeekr successfully went public, its challenges have just begun.

For investors who are optimistic about the future of Zeekr and want to invest in it, it is not easy to participate in the US stock market. Many people are hindered by “account opening”, “deposit”, “remittance”, “overseas bank card” and so on before they even start.

Therefore, the editor suggests that investors can invest through a professional US/Hong Kong stock trading platform, and BiyaPay wallet broker is a good choice. It supports real-time online trading of US/Hong Kong stocks, and can directly exchange U for US dollars or Hong Kong dollars in BiyaPay to trade US/Hong Kong stocks. It not only saves the cumbersome deposit and withdrawal process, but also saves the loss of exchange rate and handling fees in the deposit and withdrawal process. You can also recharge U to exchange for US dollars or Hong Kong dollars, withdraw to your personal bank account, and then deposit to your broker. The arrival speed is fast, and there is no limit on the amount.

The strategic outlook

It is worth noting that as a new brand incubated by Geely Holding Group, Zeekr has broken the record for the fastest listing in the history of new energy vehicle companies. It only took 37 months from the brand launch on April 15, 2021 to the successful IPO.

At the listing of Zeekr on the New York Stock Exchange, An Conghui, President of Geely Holding Group and CEO of Zeekr Intelligent Technology, said: “The new energy wave is an unprecedented change in the global automotive industry in a century. In 37 months, Zeekr has broken the record for the fastest new energy vehicle brand from release to IPO. Behind this is the accumulation of our parent company, Geely Holding Group, for 37 years of entrepreneurship, and the pioneering exploration of the third track of the new energy vehicle industry.”

In fact, during the process of going public on the New York Stock Exchange, ZEEKR is also accelerating its layout in the global market. As of now, ZEEKR has entered South East Asia countries such as the Philippines, Laos, and Myanmar, and will gradually start delivering to mainstream right-hand drive car markets such as Singapore, Hong Kong, and Macau.

In terms of the European market, Zeekr has been launched in Sweden, the Netherlands, and Germany; the European Zeekr central store has officially opened in Sweden and the Netherlands, and has officially started delivery. The plan is to cover most of the core countries in Western Europe by 2026.

In addition, Zeekr also plans to enter emerging markets such as the Middle East and South America, and is expected to launch sales operations in 50 countries by the end of this year.

According to the prospectus, approximately 45% of the proceeds raised from the IPO will be used for research and development of more advanced pure electric vehicle technology and expanding the product portfolio; approximately 45% will be used for sales, marketing, and expanding service and charging networks; approximately 10% will be used for general corporate purposes, including Working Funds requirements, to support business operations.