Zeekr targets $5.13 bn valuation in landmark U.S. IPO

Zeekr Intelligent Technology Holding, a prominent electric vehicle manufacturer, aims to achieve a valuation of up to $5.13 billion in its upcoming U.S. initial public offering (IPO). This move marks a significant milestone as the first major flotation of a China-based company in over two years.

In its IPO, Zeekr plans to raise $367.5 million by offering 17.5 million American depositary shares (ADSs) priced between $18 and $21 each. This offering comes at a crucial time, testing investor sentiment towards Chinese companies amidst ongoing tensions between the U.S. and China over trade, intellectual property, and Taiwan’s future.

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According to Dealogic data, six IPOs of Chinese companies in the U.S. raised $46.9 million in the first quarter of 2024, a stark decline from $428 million during the same period last year. This drop reflects the impact of regulatory uncertainties and geopolitical tensions on Chinese firms seeking U.S. listings.

The IPO resurgence follows the resolution of a longstanding regulatory dispute between the U.S. and China. Last year, Beijing eased restrictions and issued new rules to facilitate such listings, following the resolution of an audit dispute between the U.S. accounting watchdog and China in December 2022.

Zeekr’s last valuation stood at $13 billion after a funding round in February last year. However, the company has warned investors about risks, including the substantial influence exerted by the Chinese government over its operations and the intense competition in China’s EV market.

Despite these challenges, several existing shareholders and third-party investors, such as Geely Auto, Mobileye, and CATL, have expressed interest in subscribing to up to $349 million worth of ADSs in the IPO. This indicates a level of confidence in Zeekr’s future growth prospects and the broader EV market.

The broader market context on Friday was one of optimism, with Wall Street rallying after a softer-than-expected jobs report. This development fueled hopes for potential rate cuts from the Federal Reserve, underscoring the resilience of the U.S. economy amidst global uncertainties.