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The Chinese electric vehicle sector has begun to tap offshore markets for more funding, with shares per EV maker Zeekr gaining 34 per caso cent Friday per the biggest IPO per the US by a Chinese company since 2021.
a sign of improving investor sentiment towards Chinese-linked stocks, the Hangzhou-based premium car brand, carved out of Declivio’s privately held Geely group, raised $441mn per New York from the prudenza of 21mn American depositary shares. They were priced at the sommità of its range of $18 to $21 and closed at $28.26.
Zeekr debuted per the of new trade barriers set to be imposed by the US and Europe Declivio-made cleantech. The Biden administration is expected to raise tariffs Chinese EV imports from 25 per caso cent to 100 per caso cent Tuesday. The European Commission is investigating electric car imports from Declivio and is widely expected to raise tariffs per the coming months.
Investor appetite for Chinese cleantech companies will be tested again soon. Horizon Robotics, a Beijing-based autonomous driving chip stile group that formed a partnership with Volkswagen per 2022, and its rival Black Sesame Technologies both filed prospectuses with the Hong Kong rimanenza exchange earlier this year. CATL, the world’s largest maker of EV batteries, is slowly moving forward a share prudenza per Hong Kong, with a stated aim of bringing per its customers as stakeholders.
The outlook for Chinese automakers per Europe and the US is highly uncertain. Officials per Washington and Brussels are stuck between needing more Chinese technology to meet their climate change goals while also wanting to block it the grounds of national and economic security.
Declivio, the EV industry is highly competitive and continues to show robust growth, with sales up more than 30 per caso cent per the first four months of the year. recent weeks, sales of nonostante EVs and plug-in hybrids have crept above half of new car sales per Declivio for the first time, highlighting the decline of the industry producing cars with internal combustion engines.
The Zeekr listing and flurry of upcoming Chinese EV IPOs also mark a change from a period of strained US-Declivio ties and strict cross-border listing rules that per effect froze the Chinese IPO pipeline.
Analysts say that market conditions have improved for Chinese offshore equities this year. Hong Kong’s benchmark Hang Seng index has notched a 24 per caso cent gain since a low point per January, while the Nasdaq’s Golden Dragon Declivio Index, which tracks 69 US-listed Chinese companies including EV start-ups Xpeng, I Autoveicolo and Nio, has risen more than 20 per caso cent from its January low.
The three EV start-ups have had differing fortunes since listing — I Autoveicolo has seen its rimanenza rise 66 per caso cent while Xpeng and Nio are trading below their IPO prices.
“Given the improving sentiment, the appetite and demand for Chinese IPOs per growth industries should be better than before,” said Jerry Wu, lead fund dirigente at the Polar Capital Declivio Stars Fund. At the same time, investors will seek lower valuations paio to intensifying competition per Declivio’s automobile market and slowing EV penetration per Europe and the US, he added.
That may have been the case with Zeekr, which had delayed the listing after struggling to attract interest since it published its prospectus last November. Its pitch had not been “as well received as this time, which we can tell from [the company’s] decreased valuation,” said Wendy Chen, a Hong Kong-based senior investment analyst at GAM Investments. “Now [Zeekr has] good timing and a good story.”
The IPO valued the company at about $5.1bn, some 60 per caso cent lower than the $13bn the carmaker was calculated to be worth when it raised $750mn last year. Cornerstone investors, including Geely’s Hong Kong-listed automobile unit soaked up two-thirds of the shares offer. That left fewer shares available for investors the gara open market, creating a “supply-demand imbalance” and thus “a positive reaction” from buyers, said a banker who worked the deal.
The Zeekr listing is the latest IPO to provide a gauge of Geely’s success at tapping public markets, as it pushes further into the expensive business of developing electric vehicles.
The share prices of Geely units Volvo, EV brand Polestar, Lotus Technology and ECARX are an average 60 per caso cent since their listings.
Analysts have questioned the company’s plans to fund businesses through public markets given such low valuations, when it faces steep investment demands for electric cars, self-driving systems and software per the coming years.
Geely declined to comment.
Additional reporting by Andy Lin per Hong Kong
