Reported by pulsestacks on May 10th
It is reported that on May 10th, Eastern Time, Jike Electric Vehicles will ring the bell at the New York Stock Exchange and officially list on the NYSE under the stock symbol "ZK".
The information indicates that the target valuation of Xpeng is $5.13 billion. Xpeng Motors will become the largest Chinese company to go public in the US since October 2021.
Li Shufu, known as the "Car Crazy Man," is about to achieve his ninth IPO in the business world. Xpeng's successful listing will also add another strong player to Geely's car empire.
Xpeng went public in just three years, becoming the fourth Chinese electric vehicle startup to go public in the US after NIO. It is also the fastest IPO in history for a new energy vehicle company. Xpeng has entered the capital market as a "dark horse" with the speed of a "100-meter sprint."
How was the "Xpeng speed" cultivated? What are the reasons behind the urgent listing? What does a successful IPO mean for Xpeng's future?
With the support of Geely's technology and resources, Xpeng has been advancing rapidly since its inception, entering the market as a phenomenon-level luxury pure electric vehicle brand.
However, Xpeng's IPO journey has not been smooth sailing.
As early as October 2022, Geely had planned to spin off Xpeng and list it independently, initially choosing Hong Kong as the listing location, but more than a month later, they shifted to the United States.
In November 2023, Jike, for the first time, submitted its IPO application in the United States, only to pause shortly after. Speculation within the industry suggests that the pause was due to a mismatch between valuation and expectations, as Jike seeks the optimal timing for its market entry.
During the Series A financing in February last year, Jike was briefly valued at $13 billion, while this time its target valuation is around $5.13 billion. Faced with a significant drop in valuation, many wonder why Jike chose to restart its IPO at this moment.
In reality, for Jike, the current timing may not be unfavorable. On one hand, although the capital market remains sluggish, the U.S. stock market has been on an upward trend in 2024, showing signs of recovery. On the other hand, in April this year, Chinese new energy vehicles surpassed traditional fuel vehicles for the first time, with a penetration rate exceeding 50%. This marks a historical turning point, as Chinese new energy vehicles are poised for long-term growth, objectively boosting investor confidence.
In the recent IPO issuance of Xpeng, a total of 17.5 million ADS were initially offered. Geely subscribed to ADS worth $320 million, securing the majority of the depositary shares. Tech giant Mobileye and battery manufacturer CATL invested $10 million and $19.08 million respectively, with a total investment of approximately $349.08 million.
This indicates strong support from existing investors, showing long-term confidence in Xpeng, which is beneficial for stock price stability and seen as positive news for public market investors.
Furthermore, Xpeng has seen rapid sales growth, with total deliveries surpassing 240,000 vehicles. It leads in gross profit margin and net profit margin, ranking second in revenue among domestic new energy vehicle manufacturers. The strong sales performance is expected to directly support Xpeng's mid to long-term stock price performance.
Although the valuation is not excessively high, it suggests significant growth potential. Reportedly, there is strong investor demand, with Xpeng's US IPO pricing each ADS at $21, at the top end of the previously announced range of $18 to $21 per share. On May 8th, Xpeng closed its subscription a day early, receiving nearly five times oversubscription, further confirming this point.
Unlike other new energy vehicle startups venturing into the market alone, Xpeng is referred to as the "second generation of cars" born with a silver spoon.
However, Xpeng has carved out a unique path different from traditional car companies and new energy vehicle startups, known as the "third track."
Xpeng's CEO, He Xiaopeng, once said, "We can't start from scratch, nor is it as difficult as an elephant turning around. We need to be agile and fast." This philosophy has led to the astonishing "Xpeng speed."
For instance, it took 192 days from brand launch to new car delivery, 110 days for the Xpeng P7 deliveries to exceed 10,000 units, and 217 days to surpass 20,000 deliveries, far ahead of the average data of "Weilai."
This speed was also evident in achieving the fastest IPO in history, as Xpeng has been preparing for its listing all along.
First and foremost is mastering key technologies. Before the official launch of the Jike brand, Geely introduced the globally leading all-electric architecture, SEA Haohan, which took five years to develop and over 20 billion investments. Jike's first product, 001, is based on the SEA Haohan architecture, playing a significant role in the brand's success. In terms of key technologies, Jike also took the lead in introducing luxury features such as the 8295 chip and 800V architecture into the 200,000-level market.
Next is continuously expanding the product lineup. Jike pioneered the "third track," starting from niche areas, entering from the high-end, taking a differentiated route, and accelerating product deployment. So far, it has launched Jike 001, Jike 007, Jike 009, Jike X, Jike 001 FR, as well as the Jike 009 Glorious and Jike MIX unveiled at the Beijing Auto Show. Each model has precisely entered a niche market and become a benchmark in that segment.
Furthermore, accelerating in-house development of intelligence. Jike is continuously improving its intelligent cockpit and advanced driving assistance capabilities. In the field of intelligent driving, Jike previously used Mobileye technology, but due to Mobileye's closed system, limited chip computing power, slow updates, and difficulty in meeting demands, Jike released the NZP high-speed autonomous navigation assistance system and OS 5.0 last year to address these shortcomings. This year, Jike will continue to focus on in-house development.
In addition, in terms of energy supplementation and overseas expansion plans, Jike has also accelerated its layout. As of May this year, Jike's self-built charging stations have exceeded 1,000. Among China's self-built pure electric brand charging stations, Jike ranks in the top three in terms of inventory, and it holds the largest number of self-built 800V ultra-fast charging piles among car manufacturers. This year, Jike will expand its footprint to eight countries in Europe and simultaneously enter emerging markets in Southeast Asia, the Middle East, and South America. It is expected to conduct sales operations in 50 countries by the end of this year.
This will directly drive an increase in Jike's sales volume. According to official data, among the hunting-style models sold domestically in 2023, 60% are Jike 001. The flagship luxury SUV, Jike 009, secured the top spot in sales of luxury electric MPVs priced above 500,000 RMB within three months of its launch. Earlier this year, the newly released Jike 001 accumulated nearly 40,000 orders since its launch...
By accelerating in-house technology development, expanding the product lineup, addressing intelligent shortcomings, and speeding up overseas expansion, with such a comprehensive strategic layout, achieving the "Jike Speed" for the fastest IPO in history is not surprising.
Jike's Vice President Lin Jinwen once said in an interview, "In 'chaotic' times, there is no peace. This year, the market will experience an unprecedented frenzy."
For Jike, this year is destined to be the "unpeaceful 2024," aiming to win the fierce competition in China's new energy sector. For a new energy vehicle company that has not yet achieved large-scale production, having sufficient funds is crucial as a significant reserve of ammunition.
The prospectus discloses that as of the end of 2023, Xpeng's total revenue is approximately 51.6 billion yuan, a 62% year-on-year increase, with a gross profit of 6.85 billion yuan and a gross profit margin of 15%, ranking second only to Tesla among new energy vehicle manufacturers. Despite the strong revenue and gross profit performance, like most new energy vehicle companies, Xpeng has not yet turned a profit, with a net loss of around 8.3 billion yuan in 2023.
The main reason for the losses, as seen from the prospectus, is the increasing R&D expenses incurred by Xpeng. In 2023, Xpeng's R&D expenses amounted to 8.369 billion yuan, which is roughly in line with the losses for the same period. This suggests that from a revenue perspective alone, Xpeng is actually close to achieving a balance between revenue and expenses.
However, Xpeng currently only has around 3.3 billion yuan in cash and cash equivalents, which, based on the estimated annual loss of around 8.3 billion yuan, would only be sufficient for about six months of operation.
Therefore, in the current era of "survival of the fittest" and intense competition, gaining access to more financing channels, attracting global funds, leveraging the power of the capital market to accelerate expansion, seize market share, turn losses into profits, and better cope with the fierce competition and battles in the upcoming new energy elimination race, going public is an inevitable path.
Xpeng represents Geely's transformation in the new energy vehicle market and serves as a crucial pivot for Geely to leverage the new energy vehicle market.
The listing on the US stock market will help Xpeng open up global financing channels, enhance Xpeng's and even the overall influence of Chinese new energy vehicle companies worldwide. It is also a significant step for Geely to become the "people's car" of the new energy era, leading the Geely brand upwards, shaping a high-end brand image, and advancing towards a global presence.
