ZEEKR Intelligent Technology Holding Limited Sponsored ADR ((ZK)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for ZEEKR Intelligent Technology Holding Limited Sponsored ADR highlighted a generally positive sentiment, underscored by strong sales and revenue growth, improved gross margins, and strategic integration efforts. Despite these positive aspects, the company acknowledged challenges posed by intense market competition and the pressure to meet ambitious future sales targets.
Record Vehicle Sales and Revenue Growth
ZEEKR Group reported impressive vehicle sales and revenue growth in 2024, achieving a total of 500,000 vehicles sold. The Lynk & Co brand delivered 280,000 units, marking a nearly 30% year-over-year increase, while the ZEEKR brand surpassed 222,000 vehicles, reflecting an 87% year-over-year growth. The total vehicle revenue reached RMB55.5 billion, contributing to an overall revenue of RMB75.9 billion.
Gross Margin Improvement
The company showcased a significant improvement in profitability, with the vehicle gross margin reaching 17.3% in the fourth quarter and a full-year vehicle margin of 15.6%. This improvement indicates a strong financial performance and efficient cost management.
Strategic Integration and Global Expansion
ZEEKR and Lynk & Co successfully completed an equity transaction, expanding their global user base to over 1.82 million. The company aims to deliver 710,000 vehicles by 2025 and plans to expand international sales to constitute 10% of total sales, highlighting its commitment to global growth.
Launch of New Models
In 2025, ZEEKR plans to launch three new models, including the ZEEKR 007GT and ZEEKR 9X, while Lynk & Co will introduce two new models. These new offerings will feature advanced technologies such as super electric hybrid technology and Level 3 autonomous driving, positioning the brands at the forefront of innovation.
Intense Market Competition
The Chinese and global new energy vehicle markets are highly competitive, posing challenges for ZEEKR in achieving its sales targets and maintaining profitability. The company is aware of these challenges and is strategizing to enhance its competitive edge.
Sales Volume Concerns
Management acknowledged that the sales volume in the first quarter was not satisfactory, though it aligned with expectations. The company faces pressure to meet its ambitious target of 710,000 vehicle sales in 2025, necessitating strategic efforts to boost sales.
Forward-Looking Guidance
ZEEKR Group provided guidance for 2025, aiming to deliver 710,000 vehicles, with the ZEEKR brand expected to reach 320,000 units and Lynk & Co targeting 390,000 units. The company projects a consolidated vehicle gross margin of around 15% for 2025 and plans to reduce R&D and SG&A expenses to 6% and 8% of revenue, respectively. ZEEKR also plans to expand its product portfolio and enhance its competitive edge through advancements in AI and autonomous driving.
In summary, ZEEKR Intelligent Technology Holding Limited’s earnings call presented a positive outlook with strong sales growth and strategic plans for the future. Despite facing market competition and sales volume challenges, the company remains focused on achieving its ambitious targets and expanding its global presence.