Geely’s Zeekr premium EV brand eyes $10bn IPO valuation

In today’s top stories, Geely plans for its EV brand Zeekr to go public, Sony sees a sales boost for its PlayStation 5, and worried investors are analysing Paytm’s share buyback programme. Elsewhere, Oppenheimer analysts say the S&P 500 could rally next year, while in China, pharmaceutical stocks rally on COVID restrictions easing. 

Chinese premium EV brand eyes IPO

The parent company of Swedish carmaker Volvo [VOV-B.ST], Geely [0175.HK], has reportedly filed to take its premium EV brand public in the US. Reuters reported that Zeekr, whose competitors include Nio [9866.HK] and Xpeng [XPEV], is eyeing a valuation over $10bn, and Geely hopes to raise $1bn through the IPO. It would be the first major listing of a Chinese company in the US since Beijing and Washington struck a deal to share audits. 

Sony’s console availability improving 

Since the PlayStation 5 launched in November 2020, consumers have struggled to get their hands on units. Supply chain and chip shortage woes have started to ease, boosting Sony’s [6758.T] hardware sales. “PlayStation 5 was November’s best-selling hardware platform in both unit and dollar sales,” thanks to a “significant” year-over-year increase in console availability, NPD analyst Mat Piscatella told Bloomberg.

Chinese pharmaceutical and funeral stocks rally

As the Chinese economy emerges from its zero-Covid slump, concerns that the virus will spread following the abandonment of mass testing and quarantining are boosting pharmaceutical stocks. Fears that there could be a spike in COVID-related deaths have also led funeral stocks to rally. In response to the US CHIPS and Science Act, China is designing a $143bn package for chipmakers to boost domestic production.

S&P 500 could hit 4,400 next year 

There’s much debate about when the S&P 500 might bottom, but Oppenheimer chief investment strategist John Stoltzfus believes it could hit 4,400 next year, up from 3,990.56 at Monday’s close. In the investment firm’s 2023 outlook, Stoltzfus argued that “[a] key factor in achieving success this cycle will be the Fed’s terminal rate.” The average end-of-2023 target among major firms is 4,140, according to a survey by CNBC. 

Paytm buyback worries investors 

The buyback programme announced by Indian fintech Paytm [PAYTM.NS] has got investors feeling nervous. Losses widened in Q2 2023 as it continued to invest heavily in expanding its services, and the company’s share price is down 60.2% year-to-date. Karthick Jonagadla, the founder of Quantace Research, told Bloomberg, “For the buyback to work, the company may need to pay 30% [to] 40% premium over [the] current price. Otherwise, it may not serve the purpose.”