Chinese EV maker Zeekr delays U.S. IPO

November 30, 2023 8:51 AM EST

According to sources familiar with the matter, Zeekr, a high-end electric vehicle (EV) label under the Chinese automotive giant Geely, has put their planned U.S. initial public offering (IPO) on hold due to differing valuation expectations.

Amidst shaky global financial markets, a third source mentioned that the decision to delay the IPO was due to the volatility. None of the sources agreed to be identified as the info hasn't been made public yet.

Zeekr, which recently filed for a prospectus to list shares in New York, expected to retain its $13 billion valuation from a private fundraising round in February. However, discussions with potential investors from late August suggested a valuation lower than the IPO figure, attributed to ongoing weak market sentiment and the company's recent increased losses.

"The company has made a public filing to the SEC and is proceeding with the preparatory work," Zeekr said in a statement, without elaborating.

Zeekr revealed in its prospectus, a notable increase in total revenue, reaching 35.31 billion yuan ($4.9 billion) for the nine months ending on Sept. 30, a significant rise from 18.47 billion yuan in the previous year.

However, despite the revenue surge, its operational losses widened to 5.23 billion yuan compared to 4.90 billion yuan from the same period.

Similar trends have been observed among listed counterparts like Nio (NYSE: NIO), an EV manufacturer, whose share prices have fluctuated or declined recently due to a pricing battle in China that has impacted profitability. A price war that has seen companies undertake cost-cutting measures and establish partnerships to navigate the intensifying competitive landscape.

Earlier this month, unnamed sources revealed to Reuters that Zeekr's objective remained to secure a minimum of $500 million through the IPO before deciding to halt the process.

Established in 2021 by Geely, formerly recognized as Zhejiang Geely Holding Group, Zeekr was created to capitalize on the rising demand for high-end EVs in China.

Zeekr has introduced four EV models in China. Among these, the 001 crossover stands out as its best-selling model, priced at 269,000 yuan ($36,927.22).

Moreover, Zeekr has intentions to expand its market presence beyond China. It aims to enter overseas markets, including but not limited to Germany, Israel, Kazakhstan, the Netherlands, and Sweden.

By Michael Elkins | [email protected]

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