To The Moon

It's been a while since we've seen a new player in the EV market join the ranks of $NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ $XPeng Inc.(XPEV)$ $XPENG-W(09868)$ $Li Auto(LI)$ $LI AUTO-W(02015)$. Now, Zeekr is set to make its debut on the US stock market, and Tiger Securities offers zero-fee subscription!

Those guys from NIO, Xpeng, and Li Auto made some crazy gains on their IPOs. NIO shot up 5.6% on its first day, while Li Auto and Xpeng exploded by 43.1% and 41.5% respectively!

So, can Zeekr replicate that magic?

Looking at the numbers, Zeekr raked in 51.67 billion yuan in 2023, a 62% jump from the previous year.

Revenue

Just by looking at revenue alone, Zeekr is close to NIO's 55.6 billion yuan and way ahead of Xpeng's 30.7 billion yuan.

But based on the IPO price, Zeekr's max market cap is only at $5.11 billion, which is significantly lower than Xpeng's $8.5 billion and NIO's $11.5 billion.

Zeekr isn't just selling cars. They're also selling batteries and providing R&D services.

Segments

In 2023, Zeekr raked in 33.9 billion yuan from car sales, 14.7 billion yuan from batteries and other parts, and 3.1 billion yuan from R&D and other services.

In the fourth quarter of 2023, their car business had a gross margin of 15.3%, which is higher than NIO's 7.5% and Xpeng's 6.2%, but lower than Li Auto's 23%.

However, the gross margin of the battery business is only 7.2%, falling behind both $Contemporary Amperex Technology Co.,Ltd.(300750)$ and $CALB(03931)$ 's 13% (for 2023). The gross margin of R&D services have a decent 24.2% in the fourth quarter of last year:

Valuation

So, Zeekr is worth valuing separately. We can look at their car business based on the average 1.6x P/S ratio of NIO, Xpeng, and Li Auto.

For the battery business, let's go with CALB Group's 0.88x P/S ratio.

And for R&D services, since there's no direct comparison and its growth has been stagnant at around 3 billion yuan for the past 4 years, let's give it a 1x P/S ratio.

Based on these factors, Zeekr's fair value is around 70 billion yuan, or about $9.1 billion. But their IPO valuation is only at $5.1 billion.

And it gets even better! Zeekr just announced their record-high monthly sales of 16,089 vehicles in April!

Therefore, Zeekr may definitely attract investors to actively buy!