Luxury electric vehicle brand Zeekr, owned by Chinese automotive giant Geely, is making preparations for its much-anticipated initial public offering (IPO) in the United States. The announcement came after Zeekr submitted a regulatory filing on Thursday, shedding light on its financial performance and highlighting concerns about the potential influence of the Chinese government on its business operations.
Key Takeaway
Zeekr, the luxury electric vehicle brand owned by Geely, is preparing for an IPO in the U.S., marking the first major Chinese listing in nearly two years. Despite the potential for lucrative opportunities, concerns persist over the influence of the Chinese government on Zeekr’s business decisions. Investors should closely follow geopolitical developments and regulatory changes in order to make informed investment decisions.
Zeekr’s Path to Going Public
It has been almost a year since Zeekr revealed its intention to confidentially file for an IPO in the U.S. The forthcoming listing will mark a significant milestone, as it will be the first major Chinese IPO in the American market in nearly two years. This follows China’s temporary prohibition on foreign IPOs. In August 2022, a deal between Washington and Beijing was struck, which mitigated the risk of delisting for over 200 Chinese companies listed on U.S. exchanges. The agreement allows U.S. regulators to scrutinize the auditing records of Chinese firms trading in the United States.
Concerns Over Chinese Influence
However, the regulatory filing also highlights one of the main risk factors associated with Zeekr’s IPO: the potential influence of the Chinese government. As a Chinese-owned company, Zeekr faces the challenge of balancing its business decisions with potential government intervention from Beijing. The filing explicitly acknowledges this risk, suggesting that the Chinese government may impact Zeekr’s strategic choices and operational autonomy.
This concern underscores the importance of investors closely monitoring the Chinese market and the political landscape, as it could indirectly impact Zeekr’s performance in the future. Geopolitical tensions and regulatory shifts in China have previously affected other Chinese companies operating in overseas markets.
