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Strong Demand Prompts Upsize of Zeekr IPO

Zeekr, a luxury electric vehicle brand owned by Hong Kong-listed Geely Auto, upped its stock offering in New York in light of strong investor demand.

The Hangzhou-headquartered carmaker raised approximately RMB 3.2 billion ($441 million) from global investors, selling a total of 21 million American Depositary Shares (ADS) in the company at RMB 151 ($21) each—representing a 20% increase in the number of shares originally offered. An ADS is a U.S. dollar-denominated equity share of a foreign company traded on U.S. bourses. The IPO put a value on Zeekr at around RMB 37 billion ($5.1 billion).

The IPO, which was the first major offering of a China-based company in a U.S. stock exchange in over two years, was seen by many as a litmus test for global investors' appetite for Chinese companies. However, the IPO comes as the Biden administration announced that it would raise tariffs on Chinese EV imports from 25% to 100%. It remains to be seen how markets will react, but Investors' eagerness to purchase Zeekr's shares at the top end of its offering price would support the view that public markets continue to welcome Chinese companies with good domestic performance, despite ongoing tensions between Washington and Beijing over trade, territories, intellectual property, and more.