Investing.com | Editor Ambhini Aishwarya
Published Nov 21, 2023 07:27AM ET
Zeekr Intelligent, the electric vehicle unit of Geely Automobile Holdings (OTC:GELYF) Ltd (0175.HK), is moving forward with plans for an initial public offering (IPO) in New York, aiming to raise approximately $500 million. This move comes amidst heightened geopolitical tensions and regulatory challenges both in the U.S. and Europe.
On Tuesday, Zeekr disclosed its intention to list on the New York Stock Exchange. The company, which has yet to turn a net profit, reported robust first-half revenues of 21 billion yuan ($2.9 billion). The IPO is expected to support its expansion and compete with industry giants such as Tesla (NASDAQ:TSLA). Zeekr’s product lineup includes luxury car sales that have generated $1.8 billion, and the company is also diversifying its portfolio through Viridi battery sales and research and development services.
Despite the ambitious plans, Geely Auto’s shares experienced a 2.9% decline on Friday, November 10, 2023, reflecting investor caution as the market capitalization stood at $12.3 billion. The decline came shortly after Zeekr made its IPO filing public on Thursday, November 9, 2023.
The company’s U.S. expansion plans include launching robo-taxis but face significant regulatory hurdles. In China, data management regulations require foreign-invested companies like Zeekr to operate through licensed partners. Additionally, nearly half of its receivables and over half of its purchases in 2022 involved related parties within the Geely group.
The recent high-level talks between Chinese President Xi Jinping and U.S. President Joe Biden showed little progress in easing the strained U.S.-China relations, adding another layer of complexity to Zeekr’s IPO journey in the U.S. Moreover, European Union investigations into Chinese car manufacturers pose further challenges for the company’s operations abroad.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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Written By: Investing.com
