On the evening of May 10th, Jike was officially listed on the New York Stock Exchange under the code "ZK". The company had previously received over 5 times the oversubscription and ended the subscription one day earlier than originally planned. The IPO price per ADS of Extreme Krypton US stock is $21, which is at the top of the previously announced range of $18 to $21.
On the first day of listing, Jike Automobile rose nearly 40% shortly after its opening, and then its stock price remained volatile at a high level throughout the day. As of closing, the company's stock price rose 34.57% to $28.26 per share.
According to sources from Jike, from its establishment to listing, Tesla took 7 years, Xiaopeng Automobile took 6 years, Ideal Automobile took 5 years, and NIO took 4 years. The Jike brand has been knocking on the door of the US stock market for 3 years since its release, making it the "fastest IPO" new car making force in history, once again demonstrating Jike's speed. In addition, as industry chain partners and existing investors, Ningde Times, Mobileye, and others continue to subscribe in this IPO and are optimistic about the long-term value of Jike.
Extreme Krypton US Stock Prospectus
Geely and CATL support
"Unlike traditional car companies and new forces, Geely Holding Group empowers a brand new independent brand with Geely Holding Group's car making heritage and global resources. This is the third track opened by Geely Holding Group for global new energy transformation, and the long-term value highlighted by Geely Holding Group in the global capital market." An Conghui, President of Geely Holding Group and CEO of Geely Holding Group's intelligent technology, said that the company's customized car models in cooperation with Waymo will soon enter the US travel market, and its household products will also be launched in markets such as China.
Jike is a high-end pure electric brand launched by Geely Holdings on April 15, 2021. Prior to this, Geely Holdings had already launched the world's leading pure electric architecture, SEA Haohao, which took five years and invested over 20 billion yuan to build. Based on Geely Holdings' technological background and resource allocation, as well as the empowerment of SEA's vast architecture, Jike has the dual advantages of brand light asset operation and fast-paced product launch.
As a key support and nurturing object of Geely's system, in order to alleviate the financial pressure of Jike, Geely Group has also provided Jike capital support through loans to maintain the operation and research and development of Jike enterprises. According to the prospectus, on April 15, 2022, Jike and Zhejiang Geely Automobile Manufacturing Co., Ltd. signed a 10-year loan agreement with a total amount of 9.7 billion yuan, and as of the date of the prospectus, there is no outstanding balance. On November 30, 2022, Ningbo Viridi and Zhejiang Geely Automobile Manufacturing Co., Ltd. signed another 10-year loan with a total amount of 1.6 billion yuan.
In addition to the continuous support of Geely's system, Jike has also been empowered by industrial chain enterprises. After its establishment, Jike completed a Series A financing of $500 million and a Series A financing of $750 million, with investors including Intel Investment, Bilibili, CATL, Boyu Capital, and Amnon Shashua, founder and CEO of Mobileye Global.
Ningde Times and Mobileye, as industry chain partners and existing investors, continue to subscribe in this IPO. People related to Extreme Krypton stated that they are both investors and top global excellent partners in the industry ecosystem, and they are optimistic about the long-term value of Extreme Krypton.
Current losses still present, optimistic future expectations
According to the prospectus, the revenue of Jike from 2021 to 2023 was RMB 6.528 billion, RMB 31.9 billion, and RMB 51.67 billion, respectively. The growth in revenue was mainly due to the increase in vehicle sales; The gross profit is RMB 1.038 billion, RMB 2.472 billion, and RMB 6.85 billion respectively; The gross profit margin has increased significantly, reaching 1.8%, 4.7%, and 15.0% respectively.
Although the company's revenue and gross profit continue to improve, like many domestic new energy vehicle manufacturers, Jike is also in a state of continuous losses. According to the prospectus, Jike's net losses from 2021 to 2023 were 4.514 billion yuan, 7.655 billion yuan, and 8.264 billion yuan.
The research and production of electric vehicles require a large amount of capital investment. In order to support product leadership and rapid iteration, the research and development expenses of Jike have been increasing year by year in the past three years, becoming one of the reasons for the company's losses. The prospectus shows that from 2021 to 2023, the research and development expenses of Jike were 3.16 billion yuan, 5.446 billion yuan, and 8.369 billion yuan, respectively. In addition, sales and administrative expenses are also another reason for the losses, with expenses related to Jike from 2021 to 2023 being 2.2 billion yuan, 4.245 billion yuan, and 6.92 billion yuan, respectively.
Although the amount of losses has increased, the profitability of Jike is improving, with a net profit margin of -15.99% for the entire year of 2023, which has narrowed compared to -24.00% in 2022.
However, in the face of continuous losses, the Extreme Krypton side still maintains an optimistic attitude. At the 2023 Geely Auto Performance Conference, An Conghui stated that in 2024, Jike will also launch three new products and is confident in its annual delivery target of 230000 units. "Under the premise of increased sales and gross profit, Jike strives to achieve the goal of turning losses into profits under Hong Kong financial statement standards by 2024."
It is widely believed in the industry that economies of scale are the key to maintaining breakeven in the automotive industry. Tesla has also experienced long-term losses, and when its sales reached a scale of 500000 vehicles that year, it began to make profits for the whole year. In 2023, the sales of Geely Krypton cars were 119000 units. In the first four months of 2024, the sales of Geely Krypton's new cars reached 49148 units, a year-on-year increase of over 110%. Among them, the sales of new cars in April were 16100 units, a year-on-year increase of 99%, reaching a historic high. The increase in sales has also brought positive effects to Jike's revenue. From 2021 to 2023, Jike's automotive business revenue was 1.5443 billion yuan, 19.6712 billion yuan, and 33.9118 billion yuan, respectively.
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