Chinese electric vehicle manufacturer Zeekr Intelligent Technology has successfully made its debut in the US initial public offering (IPO) market, raising an impressive $441 million as its shares surged by 24% on their first day of trading.
Zeekr's Debut in US IPO Raises $441 Million as Shares Surge by 24%
According to Reuters, Zeekr priced its IPO at the top of its indicated range, selling 21 million American Depositary Shares (ADSs) at $21 per share.
Initially planning to sell 17.5 million ADSs, the company upsized its offering due to strong demand from investors, closing orders a day earlier than scheduled in the bookbuilding process.
The IPO gives Zeekr a fully diluted valuation of $5.5 billion, including options and restricted stock units, and approximately $5.1 billion on a non-diluted basis.
Notably, Geely Automobile, Zeekr's parent company, led the strategic investors, purchasing $271 million in shares. Additionally, Contemporary Amperex Technology acquired $19.1 million, and Mobileye Global acquired $10 million.
Despite concerns about a rush of Chinese companies listing in the US, analysts remain cautious, suggesting that the Hong Kong market must revive first. Sumeet Singh, Director of Aequitas Research, noted that US listings may not accelerate until after the US elections.
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Market Dynamics Shaping Zeekr's Successful US IPO
Zeekr's successful IPO comes amid a fierce price war in the Chinese electric vehicle market, prompting companies to expand internationally.
Zeekr and other Chinese automakers like BYD, SAIC, and Great Wall Motor are eyeing European expansion to compete with established European automakers.
Since its inception in 2021, Zeekr has delivered approximately 196,633 cars, primarily in China. In the first four months of 2024, the company outpaced its competitors, delivering 49,148 vehicles, marking a promising trajectory.
The strong investor demand for Zeekr's IPO reflects confidence in its growth potential despite a decline in valuation from $13 billion in 2021. Zeekr's successful listing is the largest Chinese flotation on US stock exchanges since 2021.
Following regulatory changes and the resolution of audit disputes, the resurgence of Chinese listings in the US indicates renewed investor confidence in the market.
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