F-1/A: ZEEKR Intelligent Technology Aims for NYSE Listing with $372.6 Million ADS Offering

ZEEKR Intelligent Technology Holding Limited files an amendment to its F-1 registration statement for a proposed initial public offering of American Depositary Shares on the NYSE.

Summary

• ZEEKR Intelligent Technology Holding Limited has filed an amendment to its Form F-1 registration statement with the SEC.
• The company plans to offer 17,500,000 American Depositary Shares (ADSs), each representing ten ordinary shares.
• An additional 2,625,000 ADSs may be offered at the underwriters' election to cover over-allotments.
• The initial public offering price is expected to be between US$18.0 and US$21.0 per ADS.
• The company intends to list the ADSs on the New York Stock Exchange (NYSE) under the symbol ZK.
• Existing shareholders and third-party investors, including Geely Auto, Mobileye, and CATL, have indicated interest in subscribing for up to US$349.08 million of the ADSs.
• Geely Auto is expected to remain a controlled company after the offering, holding a significant portion of the voting power.
• The company acknowledges risks associated with operating in China, including regulatory uncertainties and potential government intervention.
• ZEEKR faces risks related to its business, industry competition, supply chain dependencies, and relationship with Geely Group.
• The company also highlights risks associated with the Holding Foreign Companies Accountable Act (HFCAA) and potential delisting from U.S. markets.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While it highlights ZEEKR's growth, technological strengths, and market opportunities, it also acknowledges significant risks and challenges, including financial losses, regulatory uncertainties, and intense competition. The sentiment is cautiously optimistic.

Positives

• ZEEKR is experiencing fast delivery growth in the premium BEV market in China.
• The company has strong in-house technological capabilities focusing on electrification and intelligentization.
• ZEEKR has established in-depth partnerships with a number of internationally renowned smart mobility companies.
• The company has a customer-oriented DTC sales model with a focus on innovative and interactive engagement with its customers.

Negatives

• ZEEKR has a limited operating history as a separate business.
• The company has recorded net losses in recent years.
• ZEEKR is dependent on Geely Group for the continued use of SEA and the manufacturing of its BEVs.
• The company faces risks associated with the HFCAA and potential delisting from U.S. markets.

Risks

• Changes in China's economic, political, or social conditions could adversely affect ZEEKR's business.
• Uncertainties in the Chinese legal system and potential government intervention pose risks.
• The company faces intense competition in the BEV market.
• ZEEKR is dependent on suppliers, some of which are single-source.
• The company's relationship with Geely Group may create conflicts of interest.
• The HFCAA may lead to delisting from U.S. markets.
• There is no guarantee that the ADSs can be resold at or above the IPO price.

Future Outlook

ZEEKR plans to launch vehicles for next-generation mobility lifestyle and capture the extensive potential of the premium BEV market globally through an expanding portfolio of vehicles.

Management Comments

• Conghui An, co-founder and CEO, has over 25 years of experience in Geely Group and has successfully established and operated Geely and Lynk&Co.

Industry Context

The document highlights the rapid growth of the BEV market in China and Europe, driven by technological advancements, supportive policies, and infrastructure development. It also mentions the increasing competition in the premium BEV segment, with both pure-play BEV companies and traditional OEMs vying for market share.

Comparison to Industry Standards

• The document states that ZEEKR 001 achieved a total delivery of 10,000 units in less than four months after the initial delivery, which, according to Frost & Sullivan, is one of the fastest among the major midto high-end NEV models and premium BEV models in China.
• In October 2022, ZEEKR delivered 10,119 units of ZEEKR 001, making it the first pure-electric premium vehicle model manufactured by a Chinese BEV brand with over 10,000 units of single-month delivery volume, according to Frost & Sullivan.
• ZEEKR 009's extended range version is the world's first pure-electric MPV model with an over 800km CLTC range and the longest all-electric range in the MPV market by the end of February 2024, according to Frost & Sullivan.
• The document compares ZEEKR's vehicles to models from NIO, BMW, AVATR, and Mercedes-Benz, highlighting ZEEKR's competitive specifications and performance metrics.

Related Party Transactions

• In 2022 and 2023, purchases from our largest supplier amounted to RMB18,605.1 million and RMB25,035.2 million (US$3,526.1 million), respectively, accounting for 53.5% and 44.8%, respectively, of our total purchase and representing costs charged under the cooperation framework agreements discussed in Our Relationship with Geely Group.

Stakeholder Impact

• Shareholders: Potential for capital appreciation and dividends (though not expected in the near future).
• Employees: Continued employment and potential for career growth.
• Customers: Access to innovative and high-quality BEVs and related services.
• Suppliers: Continued business relationships and potential for increased orders.
• Creditors: Increased financial stability and ability to repay debts.

Next Steps

• The company intends to apply to list the ADSs on the New York Stock Exchange under the symbol ZK.
• The underwriters expect to deliver the ADSs against payment in U.S. dollars in New York, New York on , 2024.
• We intend to use the net proceeds from the offering for: (i) the development of more advanced BEV technologies, as well as expansion of product portfolio; (ii) selling and marketing, and expansion of our service and charging network; and (iii) general corporate purposes, including working capital needs, to support our business operations and growth.

Key Dates

Keywords

ZEEKR, IPO, ADS, BEV, Electric Vehicles, Geely, China, NYSE, Offering, Automotive