China's Zeekr Prices US IPO At Top End Of Estimated Range - What's On The Cards?

Zinger Key Points
  • Zeekr IPO priced at top range, raises $441 million.
  • Despite Chinese EV challenges, Zeekr shows growth in European expansion.

ZEEKR Intelligent Technology Holding Limited ZK, the global electric mobility technology solutions brand of Chinese automaker Geely Automobile Holding GELYY, priced its U.S. initial public offering (IPO) of 21 million American Depositary Shares (ADS) at $21 per share.

The shares will begin trading on May 10, 2024, on the New York Stock Exchange under the ticker symbol “ZK.” 

The company earlier planned to sell 17.50 million ADSs with the price estimated between $18.00 and $21.00 per ADS.

The offering is expected to close on May 14, 2024, subject to customary closing conditions. 

The company has granted the underwriters an option, exercisable for 30 days from the date of the final prospectus, to purchase up to an aggregate of 3.15 million additional ADSs at the IPO price.

The total gross proceeds of the offering are expected to be approximately $441.0 million and $507.2 million if the underwriters choose to exercise their over-allotment option in full.

The IPO gives Zeekr a fully diluted valuation of $5.5 billion, while on a non-diluted basis, the company is valued at about $5.1 billion. The company closed orders from investors a day earlier due to strong demand, according to a report from Reuters.

Strategic investors, including Geely Automobile, Contemporary Amperex Technology Co Ltd, and Mobileye Global Inc MBLY, accounted for $300 million worth of stock sold in the IPO, the report noted. 

The IPO was multiple times oversubscribed but analysts doubt an imminent surge of Chinese listings in New York, Reuters noted. 

Zeekr’s strong demand for IPO comes amid a fierce EV price war in China, prompting companies like Zeekr, BYD Company BYDDY, SAIC Motor Corp Ltd, and Great Wall Motor to expand into Europe.

While Zeekr’s IPO valuation represents a decrease from its previous valuation, the company has shown growth, delivering its first vehicle in October 2021 and surpassing some competitors’ deliveries in the first four months of 2024, the report mentioned.

Zeekr disclosed a surge in total revenue to ¥51.67 billion ($7.28 billion) in 2023, but its net loss widened to ¥(8.26) billion. 

The report mentioned that the listing marks the biggest Chinese flotation on U.S. stock exchanges since 2021.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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