China’s Zeekr Intelligent Technology (ZK.N) was set to commence trading on the New York Stock Exchange on Friday, following the electric-vehicle maker’s initial public offering priced at the upper end of its targeted range.
The anticipated debut serves as the first significant U.S. listing by a Chinese company since 2021 and serves as a litmus test for investor appetite toward such entities.
Moreover, it presents an opportunity to assess the interest in EV manufacturers, grappling with shrinking profits amid intense price competition in China, compelling them to seek growth avenues beyond domestic borders.
However, the downturn in valuations of certain high-profile players in the EV space might unsettle investors.
Rivian Automotive (RIVN.O) has seen an 85% decline since its November 2021 IPO, while Lucid Group (LCID.O) now stands at a quarter of its value when it entered into a deal with a blank-check company earlier the same year.
Despite these challenges, Zeekr increased the size of its IPO, indicating robust demand from investors. The company issued 21 million American depositary shares (ADSs) at $21 each, raising $441 million. Initially, it had planned to offer 17.5 million ADSs at a price ranging from $18 to $21 each.
While the IPO values Zeekr at $5.5 billion at the upper end of its projected range on a fully diluted basis, it remains lower than the $13 billion valuation following a funding round last year.
The dwindling number of Chinese firms pursuing stock market listings in the United States in recent years stemmed from the backlash faced by Chinese ride-hailing giant Didi Global, leading to the delisting of its shares.
However, Beijing has softened its stance since then, issuing a set of regulations last year to revive such listings following the resolution of a longstanding audit dispute between the U.S. accounting watchdog and China in December 2022.
On a separate note, the U.S. Senate approved a comprehensive civil aviation bill late Thursday, aimed at enhancing aviation safety in the country.
