Zeekr IPO to Test U.S. Investor Appetite in China
Zeekr, the Chinese premium electric vehicle brand backed by Geely Automotive, announced Friday it would target a $5.13 billion valuation in its upcoming initial public offering (IPO).
According to Reuters, the company aims to raise $367.5 million through the sale of 17.5 million American depositary shares (ADSs).
The EV company includes the ZEEKR 001 and the ZEEKR X, its flagship vehicles that are marketed as “stunning, powerful, refined.” The latter offers a cruising range of 446 kilometers (277.1 miles) and a 0 to 100 km per hour (km/h) speed of 3.8 seconds—matching the performance of other brands like Tesla.
Those ADSs would represent 175 million common shares, according to a CERT form listed with the Securities and Exchange Commission (SEC). If listed at the top of its targeted $18 to $21 per share range, the company would raise its targeted valuation.
An American depository receipt (ADR) represents an ADS, which is a U.S. certificate issued by a depositary bank. ADRs essentially allow the shares of the foreign company to trade on an American exchange.
This IPO would be one of the largest in several years for a Chinese company, posing a litmus test for U.S. traders’ appetite in Chinese investment. Chinese companies have only managed to raise about $50 million on U.S. markets so far this year.
Earlier this year, Shein—the Chinese fast-fashion company—shifted its hopes for an IPO away from the U.S. and is now aiming for a listing on London’s exchange, where IPOs generally fetch smaller valuations. The move comes amid increased regulatory scrutiny on Chinese companies—although Shein is technically based out of Singapore after a move from China.
According to Reuters, Zeekr was valued at $13 billion in its last round of funding, which occurred back in February 2023.Although it posted an operating loss, Zeekr’s total 2023 revenue was $7.16 billion, representing an over 60% increase from 2022—per its Form F-1 with the SEC. Goldman Sachs and Morgan Stanley are reportedly underwriting the IPO.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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