Zeekr IPO
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Zeekr IPO to Test U.S. Investor Appetite in China

By:Thomas Westwater

The IPO would be one of the largest in several years for a Chinese company

  • Zeekr shares to start trading as soon as May 10.
  • Initial public offering seeks a $5.13 billion valuation.
  • Listing will test American investors’ appetite for Chinese companies.

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).

446-kilometer range

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.

The Zeekr IPO could be a litmus test

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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