IPO Preview: Chinese Premium EV Brand Zeekr

November 11th, 2023

EV Maker VinFast Announces US IPO

Photo: Zeekr

Zeekr IPO S-1 Filing

Parent Company – Geely

  • Geely Auto is Zeekr’s controlling shareholder and will continue to control the company post IPO.
  • Geely has seen a flurry of capital markets activity lately, with recent listings for its Volvo and Polestar units, and a SPAC merger planned for its Lotus Tech brand.
  • The Zeekr S1 filing describes the relationship as follows: 

Historically, Geely Group has provided us with technology, infrastructure and financial support. Geely Group is responsible for manufacturing vehicles at the ZEEKR Factory and the Chengdu Factory. We purchase vehicles from Geely Group at a price made up of purchase cost of direct materials and a pre-agreed markup.

Zeekr IPO Overview

Company Overview

  • Zeekr was valued at $13 billion when it raised $750 million USD through a Series A funding round in February 2023. Investors included battery maker CATL, Mobileye founder Amnon Shashua and several Chinese state-owned funds.
  • Zeekr BEV’s are made in the ZEEKR Factory and the Chengdu Factory, both of which are owned and operated by Geely Group.
  • The company delivered its first vehicle in October 2021. It delivered 72,000 vehicles in 2022 and has delivered 92,000 vehicles in the Jan-Oct 2023 period.
  • The company is yet to turn a profit, with losses of 7.6 billion CNY in 2022 and 3.9 billion CNY in 1H 2023.
  • The company had 3.2 billion CNY on its balance sheet as of June 30th, 2023 and says it has sufficient cash on hand to cover expenses over the next 12 months.

Key Models

  • ZEEKR 001 is an all electric premium sedan with base prices between $40,000 and $60,000 USD.
  • It was the first vehicle delivered by the company in October 2021 and sold 10,000 units sold less than four months after the initial delivery. 
  • ZEEKR 001 now represents a significant portion of total sales, with 53,000 units delivered in the first 3 quarters of 2023.

 A look at how ZEEKR 001 and ZEEKR 009 stack up against other premium BEVs in China from the Zeekr S1 filing:

  • ZEEKR X is an electric compact SUV model that launched in April 2023.
  • According to the company, ZEEKR X has quickly gained popularity and was ranked among the top ten best-selling electric SUV models priced between RMB150,000 and RMB300,000 between July 2023 and September 2023.
  • ZEEKR 009 the company’s second model, launched in November 2022.
  • The company describes the van as “a luxury six-seater MPV model providing a comfortable, ultra-luxury mobility experience.”
  • First deliveries started in January 2023.

Sources of Revenue

The company generates revenue from 3 types of business activities:

Vehicle Sales – The sales of EV models ZEEKR 001, ZEEKR 009 and ZEEKR X.

Batteries and Components – Revenues generated from the sales of battery packs and other components, such as motors and electric control system products, provided by Ningbo Viridi.

R&D Service – Revenues from research and development service and other services are mainly generated from BEV-related R&D services, as well as the licensing revenue from related parties.

Other Geely EV Brands 1Y Performance

Primary Risk Factors

  • China ADR Risk – Investors are not purchasing equity securities of Zeekr subsidiaries that have substantive business operations, but instead are purchasing equity securities of a Cayman Islands holding company.
  • Competition – While China’s EV market is growing fast, it is also notoriously competitive.
  • Loss-making – The company only started vehicle deliveries in October 2021 and is yet to turn a profit.

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