On August 25th, Seres Group Co., Ltd. disclosed its financial report for the first half of the year. The data shows that in the first half of this year, Seres’ operating income was 65.044 billion yuan, an increase of 489.58% compared to 11.032 billion yuan in the same period last year; the net profit attributable to shareholders of the listed company was 1.625 billion yuan, achieving a turn from loss to profit compared to the same period last year when it was a loss of 1.344 billion yuan. In terms of production and sales, in the first half of this year, Seres’ production and sales of new energy vehicles were 203,900 units and 200,900 units respectively, increasing by 349.24% and 348.55% respectively year-on-year.
As of the first half of this year, the net cash flow generated from operating activities of Seres was 16.360 billion yuan. The total assets at the end of the period were 82.417 billion yuan, and the accounts receivable was 2.248 billion yuan. In the second quarter, Seres’ revenue was 38.483 billion yuan, and the net profit in the second quarter was 1.405 billion yuan, both achieving significant growth quarter-on-quarter. Regarding the financial report data for the first half of the year, the official stated that it was mainly due to the increase in sales of new energy vehicles. Additionally, it was also stated that the company adheres to the business policy of technological innovation and cost contribution, the operation quality is continuously improving, the operating gross profit margin has increased year-on-year, and the period expense ratio has decreased year-on-year.
Judging from the financial report data for the first half of the year released by the official, this achievement is very good. Of course, Seres’ achievements are inseparable from the assistance of Huawei.
The information shows that Seres Group was formerly Chongqing Sokon Industry Group Co., Ltd., established in September 1986. In April 2021, Sokon shares joined hands with Huawei for cooperation. Subsequently, the two sides launched the first cooperative model, Seres Huawei Smart Selection SF5. The new car is positioned as a medium-sized coupe SUV, with a price range of 216,800 – 246,800 yuan. At that time, the model was also available for sale online on Huawei’s official website. In addition, it also entered Huawei stores and flagship stores. However, unfortunately, after the launch of Huawei Smart Selection SF5, the sales volume was not ideal. Relevant data shows that the annual sales volume of Seres SF5 in 2021 was only 8,169 units.
In order to reverse the situation of sluggish sales, the two sides joined forces again to launch the new energy brand AITO Wenjie. It is understood that the Wenjie brand is mainly responsible for R&D, production and delivery by Seres, while Huawei is responsible for brand sales channel promotion. In 2022, the Wenjie brand successively launched three models: Wenjie/M5 EV and Wenjie M7. In July 2022, “Chongqing Sokon Industry Group Co., Ltd.” was renamed “Seres Group”. Thanks to the emergence of the Wenjie brand and the launch of new products, the sales volume of Seres has gradually increased. In 2022, the cumulative sales volume of Seres’ new energy vehicles was 135,100 units, an increase of 225.9% year-on-year. Among them, the sales volume of the Wenjie brand was 75,000 units, becoming the biggest dark horse among new energy vehicle brands.
However, after entering 2023, with the rapid development of new energy vehicles and the launch of the price war, the sales volume of the Wenjie brand has also been affected. The data shows that in the first half of 2023, the cumulative wholesale sales volume of the Wenjie brand was 23,246 units. For this reason, the official launched the new M7 model in September last year. Compared with the old model, the price of this model has decreased. At the same time, it also realizes intelligent extended range, has longer range and lower energy consumption, and provides two-wheel drive and four-wheel drive versions.
The car became popular in the market as soon as it was launched. Since its launch, the sales volume of the new Wenjie M7 has continued to exceed 10,000 units, becoming the main pillar of Wenjie’s sales volume. Taking advantage of the momentum, the official launched the flagship model M9 in December last year. The new car is positioned as a large SUV and has launched 4 models, with a price range of 469,800 – 569,800 yuan. The new car is built by Huawei’s full-stack technology solution for intelligent vehicles. In terms of power, it offers two power version models: extended range and pure electric. After the new car was launched, it once again became popular in the market with continuous orders. In April this year, the official launched the new Wenjie M5 model.
At present, the AITO Wenjie models on sale include the new M7, new M5 and M9. Relevant data shows that the cumulative sales volume of Wenjie in 2023 was 101,631 units, of which the new M7 was 67,961 units, the M5 was 33,670 units. In the first half of 2024, the cumulative sales volume of Seres was 180,568 units, of which the new M7 was 106,540 units, the new M5 was 15,205 units, and the M9 was 58,823 units.
With the support of several models with good sales, Seres also got rid of the loss situation in the first quarter of this year and achieved a profit for the first time. The data shows that Seres’ operating income in the first quarter of 2024 was 26.561 billion yuan, an increase of 421.76% year-on-year; the net profit attributable to the parent company was 220 million yuan, an increase of 135.12% year-on-year. For reference, from 2019 to 2023, Seres’ net losses were 884 million yuan, 2.308 billion yuan, 2.793 billion yuan, 4.296 billion yuan and 4.817 billion yuan respectively, with a cumulative loss of 15.098 billion yuan in 5 years.
According to the official plan, a series of new products will be launched subsequently to form a product matrix with the existing models to meet the different needs of users. Today, the official also launched the new Wenjie M7 Pro model. The new car has launched four models, with a price range of 249,800 – 289,800 yuan. With the successive listing of new models of the Wenjie brand, the product matrix will be further improved, and the subsequent sales volume of Seres is also expected to increase further.
It is worth noting that in addition to announcing the financial report data for the first half of the year yesterday, the official also released the “Report on Major Asset Purchases”. According to the report, the official stated that it agreed that the wholly-owned subsidiary Seres Automobile Co., Ltd. would purchase the 10% equity of Yingwang held by Huawei in the form of cash payment, and the transaction amount was 11.5 billion yuan. Regarding this purchase plan, Seres stated that this transaction will help Huawei and Yingwang empower Seres Automobiles and boost AITO Wenjie to become a world-class leading brand of new luxury vehicles. The company will take this transaction as an opportunity to comprehensively deepen and enhance the long-term strategic cooperation with Huawei and Yingwang.
