Krypton is about to be split and listed, can it successfully "land"?

The past November has been of great significance to krypton. In addition to the launch of the heavy new car Extreme Krypton 009 on November 1, it was well received. In November, Extreme Krypton 001 also achieved excellent results with a cumulative delivery volume of more than 60,000, and won the sales champion of luxury pure electric vehicles with its own brand of more than 300,000 for three consecutive months.

In November, the delivery volume of Krypton increased by 447.3% year-on-year, and the delivery volume of 11,011 sets clearly showed that Krypton was on the right path.

Perhaps thanks to the current momentum, Krypton officially finalized its listing in the United States recently. On December 13th, Geely Automobile announced that Krypton would submit the draft registration statement for possible initial public offering to the SEC on December 7th, 2022 (new york time) on a confidential basis. After the proposed spin-off, it is expected that Krypton will continue to be a non-wholly-owned subsidiary of the company.

According to reliable sources, Krypton’s IPO plan to the United States raised more than $1 billion and sought a valuation of more than $10 billion (about RMB 69.8 billion). If Krypton is successfully listed, it will become the eighth listed company in Li Shufu’s hands.

Previously, Weilai Automobile was listed four years after its establishment, five years after its establishment in LI and six years after its establishment in Xpeng Motors. If Krypton can be successfully listed in the second quarter of 2023 as planned, it will become the company with the shortest time to market among car-making enterprises.

At present, it seems that the road to listing is "smooth sailing". In August, 2021, Krypton Motor announced the completion of the $500 million Pre-A round of strategic financing, which was led by Intel Capital, with the participation of Contemporary Amperex Technology Co., Limited, Billie Billie, Hongshang Group and Boyu Investment. After the investment, it accounted for about 5.6% of Krypton shares, with a valuation of nearly $9 billion. Many people had predicted that Krypton would become the fourth new car company to go public in the United States.

Listing has become an extremely important step for new energy vehicle companies. Only by ensuring the good operation of funds can we be invincible in the "second half" of new energy vehicles. Therefore, many new energy vehicle companies have also started listing preparations frequently this year. In July this year, Nezha Automobile completed the D3 round of financing, in October, Ai ‘an completed the A round of financing, and in November, Lantu completed the A round of financing.

Is it "easy" to go public?

Geely officials said that it is in the overall interest of shareholders to split the pole. Splitting up Krypton will enable investors to better evaluate Geely Group, focus on retaining business, and provide Krypton with continuous direct and independent access to equity and debt capital markets when necessary. "In view of the industry trend and based on the evaluation of the business and operation of the Group and Krypton, it is suggested that the spin-off will enhance the value of Krypton, enable Krypton to develop independently and fully release its potential, thus benefiting shareholders."

As early as the end of October this year, Geely Holding announced that it proposed to split Krypton and list it independently. However, at that time, Extreme Krypton paid more attention to the sales situation. At that time, the official said that it was necessary to consider the issue of independent spin-off and listing on the premise of completing the delivery target of 70,000 vehicles this year. As of November, it has completed the delivery of 60,000 vehicles, and only needs to win less than 10,000 deliveries in December. For krypton, which is growing vigorously, it is obviously not a problem.

In addition to sales, the reasons for being brave enough to go public in the United States are also quite "sufficient".

An Conghui, CEO of Krypton, once said that the gross profit margin of Krypton vehicles reached about 5% in the first half of this year, and the gross profit level will be further improved on the basis of delivering 50,000 vehicles in the second half of this year. The second model, Krypton 009, will have a better gross profit level.

In addition, according to the ranking data of domestic new energy vehicles’ three-year preservation rate published by an institution, Kyk 001′ s preservation rate ranks first among domestic new energy vehicles, with a preservation rate of 65.2%. From a global perspective, Krypton 001′ s three-year preservation rate is also second only to Porsche Cayenne’s new energy vehicle, ranking second.

The increase in gross profit margin, the stable hedge ratio, the rapid sales growth and Geely’s backing have all made Extreme Krypton gain the "preference" in the capital market, so many people in the industry have also predicted that it is not difficult for Geely to go public in the United States.

Extreme krypton should "go hand in hand"

Like most new energy vehicle brands, Krypton vehicles are also at a loss. According to the financial report data disclosed by Geely Automobile, the brand revenue in 2021 was 2.868 billion yuan, and the net loss in the same period reached 1.01 billion yuan; In the first half of this year, the revenue of Krypton Automobile was 8.828 billion yuan, and the net loss during the period was 759 million yuan. Since the establishment of the brand, the accumulated net loss of Krypton Automobile is nearly 1.8 billion yuan.

However, it can be seen that the loss of Krypton is gradually shrinking, and it is worth mentioning that in the first half of this year, Krypton helped all its Krypton 001 users to upgrade the 8155 chip for free. It is estimated that the cost will be 300 million yuan, and even if it costs 300 million yuan more, Krypton will still reduce the loss, which is enough to show that Krypton has not moved in the opposite direction. If Krypton can be successfully listed, I believe its losses will be reversed soon.

Although holding high and playing high has brought a good gross profit margin, for Krypton, the current sales volume is still far from the first-line echelon. Therefore, for Krypton, it is never wrong to return to the continuous climbing of sales. However, whether it’s Extreme Krypton 001 or Extreme Krypton 009, they are all high-end models that focus on the gross profit margin route, and it seems to be difficult to have a substantial increase in sales in the future.

Therefore, the recently disclosed krypton 003 has attracted special attention from the outside world. This pure electric model with a main price of less than 200,000 may become the most popular model.

In the price range of 150,000-200,000, there are not many compact models with exclusive individual buyers and certain styles. Among them, smart Genie #1 and Volkswagen ID.3 are very representative models, but other than that, there are not many boutique models that consumers can buy in this price range. If Krypton 003 can successfully seize this rising market segment, it will bring unpredictable "positive gain" to Krypton.

There is no doubt that all three models of Krypton are aimed at a relatively "blank" market segment with the intention of creating phenomenal products. However, with the word-of-mouth empowerment of Krypton 001, Krypton 003 is bound to have a huge impact on Volkswagen ID and other models at this price.

Write it at the end

It is good to enjoy the cool under the big tree. Relying on the big tree of Geely, Krypton is undoubtedly full of confidence on the road to high-end pure electricity. With a mature supply chain, platform-based capabilities and the blessing of top technology, Krypton has incomparable advantages over other new forces. If it goes public successfully, what will Krypton do next? Let’s wait and see.