With the listing of Jike, "Big Geely" is accelerating its expansion of its capital territory.
According to a reporter from China Business Daily, the new car making force, Jike, officially listed on the New York Stock Exchange on May 10th with the stock code "ZK". As a luxury intelligent pure electric brand under Geely Holding Group (hereinafter referred to as "Geely"), Jike was launched on April 15, 2021 and successfully listed on the New York Stock Exchange in just 37 months, breaking the record for the fastest listing in the history of new energy vehicle companies.
Extreme Krypton stated that this is based on Geely's solid industrial foundation and global advantageous resources accumulated over 37 years of development. "On this basis, Jike has quickly built a complete pure electric intelligent technology ecosystem and opened up the 'Jike model' of the third track of pure electric development."
It is understood that due to oversubscription, Jike has expanded its IPO scale and issued a total of 21 million American Depositary Shares (ADSs) at a price of $21 per share, raising approximately $441 million. Extreme Krypton stated that if the underwriters exercise their over allotment rights, the issuance scale will further expand to 24.15 million ADSs, raising approximately $507 million.
According to relevant information, on the first day of its listing, Jike closed at $28.26 per share, an increase of 34.57% from the issue price. Based on the closing price, the market value of Jike has reached 6.9 billion US dollars, equivalent to over 50 billion yuan in Chinese yuan.
With the successful listing of Jike, the number of listed companies in "Da Geely" has increased to 9, but in the future, "Da Geely"'s capital map will continue to expand. The reporter noticed that multiple companies under Geely are currently preparing for IPOs, and the travel company Cao Cao Chuxing under Geely has recently submitted its application to the Hong Kong Stock Exchange.
Further Expansion of Capital Territory
In 2021-2023, under the pressure of multiple factors such as price wars, expensive batteries and chip shortages, and declining subsidies, new energy vehicle companies continue to break records and lead the industry.
At present, Jike has launched five new models, including the new luxury hunting coupe, the all-new Jike 001, and its high-performance version of the pure electric hunting supercar Jike 001 FR, the original pure electric luxury MPV Jike 009, and the four seat ultra luxury flagship MPV Jike 009 Guanghui. In 2024, Jike will also launch a new mid to large scale pure electric SUV.
As of the end of April 2024, Jike has delivered a total of over 240000 vehicles. From January to April this year, it delivered nearly 50000 vehicles, achieving a year-on-year growth of more than double, and continuously maintaining its position as the sales champion of high-end pure electric brands in China with a sales revenue of over 200000 yuan.
The expansion of market size has significantly driven the growth of revenue for Extreme Krypton. According to the prospectus data, from 2021 to 2023, Jike's revenue saw a significant increase. In 2021, the revenue of Extreme Krypton was 6.527 billion yuan. In 2023, the revenue of Extreme Krypton has increased to 51.673 billion yuan, with a growth rate of nearly 7 times compared to 2021 and a 62% increase compared to 2022.
The diversified revenue structure composed of vehicle sales, three electric business, research and development, and other services also reflects the balanced and comprehensive development trend of Jike in various business areas. In terms of gross profit margin, in the first year of brand release in 2021, the gross profit margin of Jike vehicles was positive, reaching 15% in 2023, an increase of 10.3 percentage points year-on-year from 4.7% in 2022.
The outstanding core competitiveness has also attracted the favor of capital from Jike. It is understood that Jike has been supported by industry capital and well-known institutions such as CATL, Intel, and Intel since its establishment. In this listing, the old shareholders continue to firmly subscribe and fully recognize the long-term value of Extreme Krypton.
In the eyes of industry insiders, this listing will greatly enhance Jike's brand awareness and international image. "This IPO will help Extreme Krypton establish a more comprehensive industrial layout and commercial loop in the global market, further enhancing its market competitiveness." In the view of Jiang Han, a senior researcher at Pangu Think Tank, "Going public in the United States is also an important step in Extreme Krypton's internationalization strategy, which will help Extreme Krypton gain a deeper understanding of international market demand and trends, and further expand its international market share."
In addition to accelerating the pace of its subsidiary companies going public, Geely has also invested in several well-known automotive companies worldwide, accelerating its internationalization efforts.
The reporter noticed that as early as 2018, Geely had invested in Daimler, the parent company of Mercedes Benz, and subsequently became an important shareholder. In 2021, Geely and Volvo jointly created the electric vehicle brand Polestar and listed it on NASDAQ. In the same year, Geely also promoted Volvo's listing in Sweden. In 2023, Geely also invested in the ultra luxury car brand Aston Martin.
The synergy effect of the "Big Geely" system
Taking Jike as an example, compared to other new car making companies, as a latecomer, how can Jike achieve a catch-up?
This is precisely thanks to Geely's strong system and its own differentiated strategic approach, which has enabled Geely to embark on an unusual development path for new energy vehicle companies. "JiKr is built on the entire Geely platform, with multi resource support and technological accumulation, and has the ability to do the most difficult things." An Conghui, President of Geely Holding Group and CEO of JiKr Intelligent Technology, frankly stated that JiKr is not from scratch, but is built on the entire "Big Geely" system, forming a strong foundation for electrification and intelligence, as well as the ability to manufacture complete vehicles.
An Conghui stated in a media interview after the listing of Jike that Jike's manufacturing capacity is shared and shared with Geely. "The factory has invested a lot in the past decade and fully adheres to the latest standards. With the collaboration of 'Big Geely', Jike can quickly improve capacity utilization and reduce costs."
"In addition to production capacity, Jike also has advantages in procurement. Jike is a joint procurement, and Geely's vast architecture is shared by multiple brands." An Conghui further stated that in this context, administrative scale effects are evident, and prices are different. Jike has a cost advantage, "which other brands do not have.".
The achievements of leveraging the advantages of Geely's system power have also emerged. "Jike has achieved '3 800s',' 800V car, 800V power battery, 800V supplementary energy network '." An Conghui said, "Jike's current competitiveness in products and technology is not only based on the whole vehicle, but also on the formation of vertical integration capabilities throughout the entire industry chain."
Zhang Xiang, a visiting professor at the Yellow River University of Science and Technology, told reporters that in the current context of price wars, active innovation and accelerated product iteration and updates are the key to the success of automotive companies. "Only by continuously leading the industry can prices remain firm, and we must strive to maintain innovation and technological leadership, fully leveraging Geely's financial, technological, and brand advantages to maintain a favorable position in the market."
Geely is currently further strengthening the strategic collaboration of its various brands under its control. "Since last year, Geely has increased its strategic collaboration, which has had a very positive impact on the development of various brands." An Conghui said that the current manufacturing sharing and joint procurement are the main representatives of collaboration. "Geely's collaboration also plays a good role in participating in market competition for various brands under its control."
Accelerate globalization layout
"The automotive industry must be internationalized and globalized. The listing of Geely Krypton is not only a strategic arrangement, but also a very important step in Geely Krypton's globalization." An Conghui said in an interview with reporters that Geely Krypton's product technology will definitely go global. This year, Geely Krypton's goal is to sell 230000 vehicles throughout the year, of which 30000 are in overseas markets. "At present, Jike's products have been sold in the Netherlands and Sweden in Europe. In 2024, Jike's market in Europe will increase to 8. In addition, before this year's Beijing International Auto Show, Jike has signed sales contracts with more than 50 countries. It is believed that there will be more than 50 emerging markets by the end of this year, which will have a good impact on the company's sales."
In fact, Geely is also indispensable for the global layout of Jike. An Conghui, in an interview with the media after the listing of Geely, stated that Geely's globalization is actually based on Geely's nearly 30 years of automotive industry, long-term persistence and investment accumulation. "This has created relatively good conditions for the Geely brand, and it is not something that Geely can complete in just three years.".
Li Donghui, CEO of Geely Holding Group, recently stated that positioning Geely as a luxury intelligent pure electric brand is an important part of Geely's electrification, high-end, and globalization. "Geely's IPO is a microcosm of Geely Holding Group's overall strategic planning. With electrification and intelligent transformation as its core, Geely has strategically laid out in cutting-edge technology fields such as new energy technology, human-computer interaction, intelligent driving, vehicle chips, and low orbit satellites, providing strong support for the growth of its sub brands."
Therefore, Jike has increased its investment in technology research and development. According to relevant information, in the past three years, the cumulative R&D investment of Jike has reached nearly 17 billion yuan. In the future, Jike will continue to increase its investment in research and development. Approximately 45% of the funds raised from this IPO will be used to develop more advanced pure electric vehicle technology and expand its product portfolio.
At the same time, Chen Qi, Vice President of Geely Krypton, previously stated in a media interview that Geely Krypton's intelligent driving team is growing rapidly. "In order to launch the best products for everyone, the resources of the entire team are tilting towards intelligent driving, achieving victory with less and victory with speed.".
The Chinese new energy vehicle market is facing severe internal competition, and Jike is constantly breaking through with its strong products and technological capabilities. The reporter noticed that in the current Chinese automotive market, car companies are adopting methods such as price wars and CEO participation in live broadcasts to compete for market traffic.
However, An Conghui previously stated in an interview that traffic cannot be the only factor in the success of a brand or enterprise. "As the CEO of a company, time and energy are limited, and it is even more important to focus more time on products, technology, and users.".