FAST NEWS: Zeekr shares jump in New York trading debut

The Latest: Shares of Zeekr Intelligent Technology Holding Ltd. (ZK.US), the electric vehicle (EV) maker backed by leading Chinese automaker Geely, jumped in their trading debut on Friday after pricing at $21, representing the top of their previously announced range.

Looking Up: The company raised about $440 million through the share sale, making it the biggest new U.S. listing by a Chinese company in nearly three years. The company could raise an additional $66 million if the IPO underwriters fully exercise an overallotment option to sell additional shares.

Take Note: Zeekr is a relatively late arrival to China’s EV fiercely competitive EV market, and is likely to incur major losses for at least the next few years.

Digging Deeper: Zeekr’s listing could mark the start of a resumption of major IPOs by Chinese companies in the U.S. after a nearly three-year pause created by regulatory uncertainties in both the U.S. and China. Most of the regulatory issues were settled last year, but ongoing weak sentiment towards offshore-listed Chinese stocks has dampened demand for new listings. Sentiment abruptly changed in the last month with a sharp rally that has seen the iShares MSCI China ETF (MCHI.US) rise 25% from a late-January low, reflecting revived interest in the undervalued sector. That positive sentiment may have helped to boost interest in Zeekr’s IPO. The company focuses on the higher end of the EV market with models typically starting at around 300,000 yuan ($41,500). It launched its first model in 2021.

Market Reaction: Zeekr’s stock opened at $26 when it started trading on Friday, and rose further during the day to close up 35% at $28.26.

Reporting by Doug Young

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