Exclusive: Zeekr, a premium electric car brand owned by Geely, seeks over $1 billion in US IPO sources
HONG KONG, Dec 12 (Reuters) – Zeekr, one of Chinese automaker Geely’s upscale electric car brands, has confidentially filed for a US IPO, aiming to raise more than $1 billion, three sources with direct knowledge of the matter told Reuters With.
In what will be the first major Chinese IPO in the United States in more than a year and a half, Zeekr is targeting a valuation of more than $10 billion, two of the sources said.
That compares to a valuation of around $9 billion in its first outside fundraising last year.
The plans come as the brand, which competes with Tesla Inc and Chinese competitor Nio Inc (9866.HK), aims to market its 001 crossover – its first and only model – in Europe next year. It joins a growing list of Chinese automakers looking to start or expand electric vehicle sales in the region.
However, the expansion for Zeekr underscores Geely’s increasingly complex EV strategy. The automobile group led by founder Li Shufu is now home to seven brands that produce electric vehicles, three of which are high-end brands.
An IPO by Zeekr would be the first major U.S. IPO by a Chinese company since Beijing tightened its control over overseas share sales last July – a shift prompted by a cybersecurity probe by ride-hailing giant Didi Global on the heels of its U.S -stock market was triggered debut.
The IPO filing comes after Beijing and Washington reached a landmark auditing agreement in August that greatly reduced the risk of delisting for more than 200 New York-listed Chinese companies.
Zeekr filed its filings with US regulators last week and plans to go public in New York as early as the second quarter of 2023, said two of the sources and a fourth source who also had direct knowledge of the matter.
A confidential filing allows companies to withhold details from competitors for longer and gives them additional flexibility, especially when an IPO schedule is not set.
The sources declined to be identified as the information had not yet been released.
A Geely Zeekr 001 electric vehicle (EV) is displayed at the Zeekr booth during a media day for Auto Shanghai Show in Shanghai, China, 19 April 2021. REUTERS/Aly Song/File Photo
According to two of the sources, Zeekr was also considering Hong Kong as a stock exchange, but chose New York in hopes of a higher valuation.
Geely, who is in charge of Zeekr’s public relations, declined to comment. It said in October it would spin off Zeekr, but didn’t name a listing or the likely value of an offering.
SEVEN BRANDS
A successful listing could lead to more selling of Chinese stocks in the United States, which is said to have the deepest pool of capital in the world and has a more predictable pace of listings.
Just five Chinese companies have completed U.S. IPOs this year, raising a total of $162.5 million, according to Refinitiv data — a far cry from the $12.8 billion raised last year.
Zeekr was founded by Geely, officially known as Zhejiang Geely Holding Group (GEELY.UL), in April 2021 to tap into the growing Chinese demand for premium electric vehicles. Later that year, it launched the 001 crossover in China.
But with multiple brands selling EVs, Geely faces a complexity that larger EV makers BYD (002594.SZ) and Tesla have avoided in favor of vertical integration and a manufacturing approach that allows them to drive down costs.
Geely’s other high-end EV brands include Volvo (VOLCARb.ST), Polestar – an EV-only venture with Volvo aimed at the premium segment of the market, as well as the much more expensive British luxury sports car brand Lotus.
The company also sells electric vehicles under the Geely brand through Smart – a joint venture with Mercedes Benz (MBGn.DE) and Lynk & Co – another joint venture with Volvo that aims to carve out a niche for subscription-based electric vehicles with a fixed cost .
Zeekr sold just over 60,600 cars in the first nine months of 2022, compared to around 285,900 Model Y crossovers for Tesla in China over the same period, according to the China Passenger Car Association.
The Model 001 starts at 299,000 yuan in China, slightly more than the 288,000 yuan for Tesla’s Model Y, which recently saw a price cut. Zeekr has not announced prices for foreign markets.
Reporting by Julie Zhu and Kane Wu in Hong Kong and Scott Murdoch in Sydney; Additional reporting by Kevin Krolicki in Singapore and Norihiko Shirouzu in Beijing; Editing by Edwina Gibbs
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Scott Murdoch
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