Photo/Kong Size (NBD)

On June 11th, Chinese automaker Zeekr disclosed its financial report for the first quarter of 2024, marking its first financial statement since going public on the New York Stock Exchange.

During the reporting period, the company achieved revenue of approximately 14.737 billion yuan, a 71% increase year-over-year. Zeekr's main source of revenue is from automobile sales. In the first quarter of this year, its automobile sales amounted to about 8.171 billion yuan, a 73.0% increase year-over-year, but a 22.8% decrease quarter-over-quarter.

Zeekr explained that this was due to seasonal factors affecting delivery volumes and changes in its product mix leading to a decrease in average selling prices.

In the reporting period, Zeekr's net loss was about 2.022 billion yuan, narrowing by 18% year-over-year. As of March 31st, Zeekr's cash, cash equivalents, and restricted cash totaled approximately 3.791 billion yuan.

It's worth mentioning that in the first quarter of this year, Zeekr's overall gross margin was 11.8%, compared to 7.9% in the same period last year and 14.2% in the previous quarter; the gross margin for whole vehicles was 14%, an increase of 3.9 percentage points year-over-year, but a 1.3 percentage point decrease quarter-over-quarter.

Zeekr's Chief Financial Officer (CFO), Yuan Jing, explained during the earnings call that the sequential decline in gross margin was mainly due to the delivery of new models, changes in product structure, and the impact of the Spring Festival holiday on sales. For reference, in the first quarter of this year, the gross margins for whole vehicles at Li Auto, XPeng Motors, and NIO were 19.3%, 5.5%, and 9.2% respectively. In comparison, Zeekr's whole vehicle gross margin is second only to Li Auto and higher than XPeng Motors and NIO.

In terms of sales volume, in the first quarter of this year, Zeekr delivered approximately 33,100 vehicles, a 117% increase year-over-year; in the first five months of this year, Zeekr's cumulative sales volume was about 68,000 vehicles, with sales exceeding 15,000 vehicles per month for two consecutive months in April and May.

Zeekr's CEO, An Conghui, expects the company to achieve its annual sales target of 230,000 vehicles. However, as June has already begun, Zeekr's completion rate for the annual target is only about 30%, indicating that the pressure to deliver in the later stages of the year is not light.

Looking at Zeekr's product structure, it currently has four models: Zeekr 001, Zeekr 009, Zeekr 007, and Zeekr X. An Conghui stated during the earnings call that the Zeekr MIX, which was first launched at the Beijing Auto Show, will officially go on sale in the second half of 2024, and Zeekr will also launch a brand-new mid-to-large SUV. After the launch of these two new products, Zeekr's product matrix will reach six models, which will help to increase Zeekr's sales and gross margin.

In addition, Zeekr stated that it will strengthen channel construction in third and fourth-tier cities this year, accelerating channel penetration to open up greater growth space for the brand. Data shows that as of the end of May, Zeekr has a total of 392 stores worldwide, and it is expected that the number of stores will increase to more than 520 by the end of this year, with a focus on increasing the construction of Zeekr Home and Zeekr Space stores. In terms of energy supply channels, as of the end of May this year, Zeekr has built 1,076 self-operated charging stations, and it is expected to build 1,000 ultra-charging stations by the end of 2024, and more than 10,000 ultra-charging piles by 2026.

At the same time, Zeekr will continue to expand into overseas markets by signing contracts with dealers to cover more countries and regions. As of the end of May, Zeekr has entered more than 20 countries and regions, and it is expected to enter eight European countries, as well as more than 50 countries and regions in Southeast Asia, the Middle East, Latin America, and Oceania by the end of the year.

Some believe that with the above measures, Zeekr's sales volume may see further growth in the future. However, after the release of the first quarter financial report, Zeekr's stock price fell. On June 11th, Zeekr closed down 6.51%, at $22.12 per share.