Extreme krypton delisting is just around the corner, turn around and hug Geely’s thigh.

Produce a tiger sniffing car group

Author Xiao Man

Toutu, vision china

From brand release to IPO, it took 37 months; It takes less than 12 months from listing to planned delisting.

　

On May 7th, Geely Automobile Holdings Co., Ltd. (hereinafter referred to as "Geely Automobile") announced that it planned to acquire all the issued shares of Extreme Krypton Intelligent Technology Co., Ltd. (hereinafter referred to as "Extreme Krypton"), and the suggested purchase price was $2.57 per extreme Krypton share or $25.66 per American Depositary Share.

　

Geely Automobile currently holds about 65.7% of the shares of Extreme Krypton. If the transaction is completed, Extreme Krypton will be completely merged with Geely Automobile, and Extreme Krypton will become a wholly-owned subsidiary of Geely Automobile, privatize and delist from the NYSE.

　

Quitting from the market and returning to Geely is the strategic need to implement "One Geely" and the key to help Kykrypton with blood transfusion.

"One Geely" is imperative.

The acquisition of Krypton is a continuation of Geely’s strategic integration.

　

Geely explained that Geely Automobile’s acquisition of Krypton is "an important step to further implement the Taizhou Declaration, focus on the main automobile industry, improve the efficiency of resource utilization and deepen brand collaboration", which can promote the deep integration and efficient collaboration of internal resources, eliminate repeated investment, reduce costs and improve the competitiveness of enterprises.

　

Since the publication of Taizhou Declaration, Geely has carried out a number of business integration adjustments. In November 2024, it adjusted and optimized the shareholding structure of Krypton and Lectra-Krypton invested 9 billion yuan to acquire 50% equity of Lectra, and Krypton invested 367 million yuan to subscribe for the newly-increased registered capital of Lectra, making Lectra a non-wholly-owned subsidiary. The equity delivery took only three months. In February this year, Extreme Krypton Technology Group was established, forming a business positioning division of "extreme Krypton is upward, and the leader is wide".

　

The planned acquisition of Kykrypton will further promote Kykrypton Technology Group to gather in Geely as the center and deepen the strategic focus of "One Geely".

　

This integration focuses more on the focus of the business layer. On the technical level, "one Geely" is already very obvious. In March of this year, Geely announced that it would unify the all-brand line intelligent driving scheme into a "thousands of miles" system, and unified the intelligent driving scheme and technical route.

　

Geely has tasted the advantages and sweetness of integration. An Conghui once said that after the merger of Link and Krypton brand, R&D investment is expected to decrease by 10%-20%, supply chain cost will decrease by 5%-8% due to scale effect, and capacity utilization will increase by 3%-5%.

Help krypton transfusion

There are quite realistic considerations behind Krypton’s plan to withdraw from the US stock market.

　

A market analyst told Tiger Smell Automobile: "It is extremely short of money. At present, the market value is low and the liquidity is poor. It is difficult to further dilute the financing. Geely privatized it, and it is extremely difficult to continue to cope with market competition."

　

Krypton has been mired in the whirlpool of losses. From 2021 to 2024, the net loss of krypton was 4.514 billion yuan, 7.655 billion yuan, 8.264 billion yuan and 5.79 billion yuan respectively, which has reached 26.223 billion yuan.

　

In order to finance and maintain operations, the valuation of Krypton was almost halved when it went public-the valuation of Krypton in the previous round of listing had reached 13 billion US dollars, while the market value at IPO was only 5.2 billion US dollars, shrinking by nearly 60%.

　

The shareholders of Krypton are unwilling to sell too many shares at a discount of 60%, which leads to the limited number of tradable shares that Krypton can issue when it goes public and does not raise enough money. Krypton originally planned to raise $1 billion, but in the end it only raised less than $500 million.

　

After the listing, the market value of Krypton did not rise back to the level of A-round financing, which means that if Krypton wants to continue financing, its shareholders must accept the discount.

　

There are only two solutions to this situation. One is to make the market value of krypton rise to a price that shareholders can make money. The other is that Geely will pay for privatization. Geely chose the latter to be able to transfuse blood for krypton more quickly.

　

Under the dual-brand strategy of "Extreme Krypton Car+Link Car", extreme Krypton needs to increase investment. According to the plan, Lectra will launch two brand-new models this year (one of which is the six-seat SUV Lectra 900) and three brand-new models will be launched in the second, third and fourth quarters of this year. Among them, the luxury hunting wagon 007GT was released in the second quarter, the full-size flagship SUV was released in the third quarter, and the large luxury SUV was released in the fourth quarter.

　

The overseas market is also in the expansion stage. Linksys and Krypton plan to build more than 200 stores overseas. Linksys 08 EM-P and Krypton’s first "800-volt global car" will be officially launched overseas.

　

Extreme Krypton Technology Group plans to sell 710,000 vehicles this year. To achieve this goal, these measures and inputs are necessary conditions. However, in the face of continuous losses and the dilemma of capital market financing, Extreme Krypton will only have enough bullets to cope with market competition if it returns to Geely’s system.