China's Zeekr Intelligent Technology delivered a far smaller loss than expected in its first earnings report as a publicly traded company in the U.S. market. But Zeekr stock tumbled to post-IPO lows.
Zeekr Slashes Losses As Revenue Soars
For the March-end quarter, the Geely-backed EV startup lost 14 cents per ADR share, much less than feared. Analysts were expecting Zeekr to lose $1.62 a share, FactSet shows. In local currency terms, adjusted net losses for the quarter decreased 17% from a year ago and fell 30% from Q4 2023, Zeekr said.
Revenue of $2.041 billion also crushed views for $1.678 billion. In local currency terms, revenue jumped 71% year over year but fell 10% quarter over quarter. Margins also rose during the quarter.
Zeekr had already reported 33,059 electric-vehicle deliveries in Q1, a quarterly record and more than doubling (up 117%) year over year.
Notably, Zeekr on Tuesday reported sharply higher sales of electric vehicles as well as batteries. In fact, it tied 43% of Q1 revenue to sales of battery packs, electric drives and other EV components.
In Q1, Zeekr's EV revenue jumped 73% and battery revenue vaulted 82%, the earnings release showed.
"This sustained growth in deliveries also secured our position as the bestselling brand in the battery electric vehicle market segment priced over RMB 200,000 ($28,134) in China," CEO Andy An said in the Zeekr earnings release. The midrange EV segment is a fast-growing and competitive one.
In the current second quarter, Zeekr's EV sales continued to gather momentum, nearly doubling (up 99%) in April and more than doubling (up 115%) in May.
Zeekr Stock In IPO Base
Shares sank 6.3% to 22.16 on the stock market today, undercutting the late-May post-IPO lows. Zeekr stock debuted May 10 after a $5.5 billion U.S. initial public offering. ZK stock has never traded below the $21 IPO price but slid to 21.42 intraday on Tuesday.
Zeekr stock shows an IPO base with a 32.24 buy point, based off its second trading day on May 13. But shares are a very long way from that.
Zeekr Challenging Tesla In China
Chinese auto giant Geely founded the Zeekr brand in 2021 to fend off Nio, Tesla and others. Tesla stock has plunged as an EV price war drags on and its aging lineup deters buyers.
In April, Zeekr told CNBC that it is outselling the Model Y and Model 3 maker in parts of China. Tesla's made-in-China sales fell 8.5% from a year ago in April. Its made-in-China sales jumped 29.9% in May vs. a year earlier.
Shares of Zeekr's startup peers Nio, Li Auto and Xpeng have each almost halved in value year to date. Polestar, another Geely-backed EV startup, has lost two-thirds of its value.
All four EV stocks fell Tuesday, with Li Auto hitting an 18-month low.
But Chinese EV giant BYD rose 0.8% but is now up 5% year to date, after rallying off the Jan. 31 low. The 50-day line for BYD stock is starting to trend higher, a positive sign, though it remains below the 200-day average.
It is unclear what caused Zeekr stock to sell off Tuesday despite far stronger-than-expected earnings results. However, the release did not offer guidance for the current quarter, although guidance is customary among China EV peers.
