Geely’s stalled IPO discounts global expansion

Tata Technologies

01/12/2023 14:28

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.  Refiles to add coding.)
       HONG KONG, Dec 1 (Reuters Breakingviews) - Electric-car
marque Zeekr, controlled by China’s largest private auto group
Zhejiang Geely, has hit a roadblock. It is putting on hold its
New York initial public offering because of a mismatch in
valuation expectations, Reuters reported on Thursday. It was
hoped the listing would break the ice and encourage a resurgence
in Chinese volumes in U.S. capital markets. The deal was
expected to raise less than $500 million: that would potentially
nearly double the total Chinese issuance stateside so far this
year, per Dealogic.
    Zeekr’s timing wasn’t bad. Its prospectus was published in
November, when global stocks recorded their best performance
since 2020. It was the same month President Xi Jinping and his
American counterpart Joe Biden met and put a floor under the
Sino-American relationship. Globally, investors remain keen on
the sector too. Tesla’s  TSLA.O  shares are up 95% this year and
those of Tata Technologies  TATE.NS , an EV servicing firm,
nearly tripled on their debut in Mumbai this week.
    Yet Zeekr may have struggled to match the $13 billion
valuation it achieved in a February funding round because its
growth hinges on expansion into Europe and the United States,
where policymakers are increasingly wary of Chinese carmakers
gaining traction. Other China-linked names expanding rapidly
around the world and planning public debuts like fast-fashion
giant Shein will take note. (By Katrina Hamlin)

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China-linked stocks are stalling    https://tmsnrt.rs/3R5GH7W
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 (Editing by Una Galani and Thomas Shum)