Chinese EV maker Zeekr targets $5.13 billion valuation in landmark US IPO

Zeekr IPO valuation: Zeekr Intelligent Technology Holding, a leading electric vehicle manufacturer headquartered in China, announced its plans on Friday to pursue a valuation of up to $5.13 billion through an initial public offering (IPO) in the United States. This endeavor marks a significant milestone as it represents the first major flotation of a China-based company in over two years.

In its quest to achieve this valuation target, Zeekr aims to raise a maximum of $367.5 million by offering 17.5 million American depositary shares (ADSs), with an anticipated pricing range set between $18 and $21 per share.

The impending IPO serves as a litmus test for investor sentiment towards Chinese enterprises amidst ongoing tensions between the world's two largest economies concerning trade dynamics, intellectual property rights, and the geopolitical future of Taiwan.

According to Dealogic data, six IPOs of Chinese companies in the US collectively raised $46.9 million during the first quarter of 2024, representing a significant decline from the $428 million raised during the corresponding period last year.

Historically, a prolonged regulatory dispute between the US and China, compounded by a crackdown from Beijing on some of its high-growth startups, had hindered Chinese companies from pursuing listings in the US However, Beijing has since adopted a more conciliatory approach, issuing a set of rules last year to facilitate the revival of such listings, following the resolution of an audit dispute between the US accounting watchdog and China in December 2022.

Zeekr, previously valued at $13 billion after a funding round in February last year, has identified several risks to potential investors, including the significant influence exerted by the Chinese government over its business operations and the intense competition prevalent within China's electric vehicle market.

Notably, certain existing shareholders and third-party investors, including prominent entities like Geely Auto, Mobileye, and CATL, have expressed interest in subscribing to up to $349 million worth of the ADSs being offered in the IPO.

Goldman Sachs and Morgan Stanley have been enlisted as underwriters for the IPO, signifying robust institutional support for Zeekr's listing aspirations.

A successful listing for Zeekr would augment the portfolio of publicly traded automotive companies under the purview of Geely Auto, the parent company of Volvo Cars and Polestar Automotive. Additionally, earlier this year, the luxury electric vehicle subsidiary of Lotus, jointly owned by Geely and Malaysia's Etika Automotive, made its debut on Nasdaq through a $7 billion blank-check deal.

(With Reuters inputs.)