China’s Zeekr seeks up to $5.13 bln valuation in US IPO

(Reuters) – Electric vehicle maker Zeekr Intelligent Technology Holding said on Friday it was targeting a valuation of up to $5.13 billion in its U.S. initial public offering (IPO), the first major floatation of a China-based company in more than two years.

Zeekr is looking to raise up to $367.5 million by selling 17.5 million American depositary shares (ADSs) priced between $18 and $21 each.

The IPO will test investors’ appetite for Chinese companies, given the simmering tensions between the two biggest economies in the world over trade, intellectual property and the future of Taiwan.

Six IPOs of Chinese companies raised $46.9 million in the U.S. during the first quarter of 2024, down from $428 million at the same time last year, according to Dealogic data.

A longstanding regulatory dispute between the U.S. and China, coupled with a crackdown from Beijing on some of its high-flying startups, had stalled Chinese companies from seeking U.S. listings.

Beijing has since softened its stance and released a set of rules last year to revive such listings, after the U.S. accounting watchdog and China resolved the audit dispute in December 2022.

Zeekr was last valued at $13 billion after a funding round in February last year.

Risks it flagged to investors included how the Chinese government exerted substantial influence over the conduct of its business and intense competition in China’s EV market.

Certain existing shareholders and third-party investors, including Geely Auto, Mobileye and CATL, have indicated an interest in subscribing to up to $349 million of the ADSs being offered in the IPO.

Goldman Sachs and Morgan Stanley are among the underwriters for the IPO.

A smooth listing by Zeekr would add to the stable of publicly listed auto companies owned by Geely Auto, which is the parent of Volvo Cars and Polestar Automotive .

The luxury EV arm of sports car brand Lotus, jointly owned by Geely and Malaysia’s Etika Automotive, also went public earlier this year on Nasdaq in a $7 billion blank-check deal.

Reporting by Niket Nishant and Arasu Kannagi Basil in Bengaluru; Editing by Anil D’Silva and Tasim Zahid