Valued at over $5 billion
Author｜Wang Lei Liu Yajie
Editor｜Qin Zhangyong
Li Shufu's capital empire is set to expand again.
Zeekr has just submitted its updated prospectus, planning to be listed on the NYSE as early as May 10.
This makes Zeekr the fourth Chinese electric vehicle startup to go public in the US following others like NIO, and it also marks Geely's ninth IPO.
The price range is set at $18 to $21 per share, valuing Zeekr at up to $5.13 billion.
Note that Zeekr was only officially announced as a brand in April 2021 and if it achieves a listing within just three years, it will become the fastest-listed new energy vehicle company. For comparison, Tesla took 7 years, while Xpeng and Li Auto took 6 and 5 years respectively.
Backed by the Geely powerhouse, Zeekr has smoothly progressed in the market.
The prospectus shows that Zeekr's revenue for 2021, 2022, and 2023 were 6.528 billion yuan, 31.9 billion yuan, and 51.67 billion yuan (approximately $7.278 billion), with gross profits of 1.038 billion yuan, 2.47 billion yuan, and 6.85 billion yuan (approximately $965 million) respectively.
Zeekr experienced a positive gross profit in its first year of establishment. The annual gross margin reached 15% in 2023, achieving a 10-point increase compared to the previous year.
A 15% gross margin is second only to Tesla in the premium electric vehicle market, surpassing other leading domestic brands like NIO, whose margin stood at 10%, and Xpeng at 2%.
Geely's Deputy CFO Dai Yong previously outlined that with increasing sales and profits, Zeekr is striving to break even in 2024 (per Hong Kong Financial Reporting Standards).
This milestone, once achieved, would make Zeekr the fastest new EV force to break even.
Overall, Zeekr has remained in loss over the past three years, although its revenue has grown significantly from 6.5 billion yuan in 2021 to 51.7 billion yuan in 2023. However, Zeekr's net losses also expanded from 4.5 billion yuan in 2021 to 8.3 billion yuan in 2023.
The main factor contributing to these losses is substantial investments in R&D. From 2021 to the end of 2023, Zeekr's cumulative R&D expenditure nearly hit 17 billion yuan, with yearly investments of 3.16 billion yuan, 5.446 billion yuan, and 8.369 billion yuan. Currently, Zeekr operates 6 global R&D centers and employs up to 7,000 researchers.
Increasing yearly R&D spending almost offsets the net losses, indicating that from a revenue perspective, Zeekr could achieve break-even.
Another notable point is Zeekr’s revenue structure, which, unlike traditional car companies and new EV forces, relies overwhelmingly (over 90%) on vehicle sales income. Zeekr also shows good revenue capabilities in its battery, R&D, and other services. As of the first half of 2023, income from sources other than vehicles accounted for an impressive 38% of total revenue.
This diversified income model strengthens Zeekr’s risk resilience.
From the perspective of this IPO, the market cap figures are considerably lower compared to previous estimations.
In August 2021, Zeekr closed its Pre-A funding round at $500 million, post this round, the valuation had reached $8.93 billion.
In December 2022, when Zeekr first submitted its IPO registration documents to the US SEC, it planned to raise over $1 billion, aiming for a valuation exceeding $10 billion.
Back then, just under 2 years since its establishment, carrying the label of Geely’s high-end pure electric vehicle brand, its sole model, Зеekr 001, had alr eady delivered over 70,000 units, achieving its annual sales target ahead of schedule.
With abundant technical prowess and a vast network of partners, but continuing to operate at a loss, the listing on the NYSE will not only enhance the brand’s global presence but also seek further financial support.
For Li Shufu, Zeekr's IPO will once again enlarge his capital empire.
Currently, Li Shufu owns shares in 8 listed companies including Geely Automobile on the Hong Kong Stock Exchange, numerous others in mainland China, plus international holdings in companies like Volvo Cars and Lotus.
Article from WeChat Public Account: SuperEV-Lab (ID: SuperEV-Lab), Authors: Wang Lei Liu Yajie