Seres embraces Huawei, and sales soar.

On the evening of September 13, Seres Group Co., Ltd. announced that it would increase its capital in Seres Automotive Co., Ltd. (hereinafter referred to as "Seres Automotive"), its wholly-owned subsidiary, by 5 billion yuan. After this capital injection, the registered capital of Seres Automotive will increase from the current 4.96 billion yuan to 9.96 billion yuan.

Regarding this action, Seres stated that it is to "enhance the capital strength of Seres Automotive, optimize its capital structure, reduce its asset-liability ratio, and promote its sustainable and high-quality development."

Some auto commentators believe that the biggest motivation for Seres to inject 5 billion yuan into its subsidiary at this time may stem from its strong financial performance. According to Seres' financial report, Seres Automotive's revenue for the first half of this year was 65.044 billion yuan, a year-on-year increase of 489.58%; net profit attributable to shareholders of listed companies was 1.625 billion yuan.

Among this revenue and net profit, the contribution from AITO automobiles accounted for a significant portion.

Public information shows that before its partnership with Huawei on AITO, Seres was not well-known in the industry. Before renaming itself Seres, its main automotive models were mostly within the scope of micro, small, and A-class vehicle manufacturers. However, after partnering with Huawei, Seres' development flourished, especially as the "AITO" brand they jointly created, under Huawei's management, gradually became a popular choice in the automotive circle.

Seres' financial report also reflects this performance - under Huawei's direct management, "AITO" ultimately fulfilled its mission, bringing substantial returns to both parties in the partnership.

According to reports from Caijing Automotive, Seres sold 200,000 vehicles in the first half of 2024, with AITO brand sales reaching 182,000 units, a significant increase from the 30,000 units sold in the same period in 2023. In terms of sales revenue, public data shows that the M9 and M7 models combined generated sales revenue of 99 billion yuan.

For Huawei, its in-depth support for AITO has also yielded fruitful returns. According to reports from iFeng, China Business Network, and other media, for every AITO vehicle sold by Seres, Huawei's BU charges approximately 36,700 yuan for components and services.

The auto commentator also believes that Seres' rapid rise to become one of the most popular automotive brands in a short period is closely related to its deep cooperation with Huawei. In an interview with the media regarding its financial performance, Seres officials did not shy away from acknowledging that the growth was "mainly due to the increase in new energy vehicle sales."

The commentator stated that if Seres had not fully embraced Huawei, it would be difficult to imagine what Seres would look like today.

Public information shows that Seres and Huawei began exploring cooperation as early as 2019. However, it was not until March 2021 that they signed a cooperation agreement and jointly launched their first cooperative model, the SF5, which did not gain consumer recognition. Subsequently, Seres unveiled AITO, a new high-end brand in-depth cooperation with Huawei, at the end of 2021. This model was an immediate success, effectively opening up Seres' position in the new energy vehicle market.

Thereafter, the two parties collaborated more deeply in intelligent driving, intelligent cockpits, and core electric vehicle technologies, and gained market recognition with the subsequent launch of AITO M7 and M9 models.

Public data shows that AITO sales exceeded 70,000 units in 2022, nearly 100,000 units in 2023, and 182,000 units in the first half of this year, making it the second most popular new force automaker brand after NIO.

After partnering with Huawei, a giant in the industry, Seres' development has taken a dramatic turn for the better.

In addition to significant growth in sales and net profit, Seres has also made gains in share price and market value. Judging from the current share price trend, since partnering with Huawei, Seres' share price has surged from around 20 yuan initially to over 70 yuan currently, a quadrupling in value. Based on this increase, Seres' market value has also soared from its previous tens of billions to over a trillion yuan, joining the "trillion-yuan club."

After partnering with Huawei and reaping benefits in sales, profits, brand reputation, and share price, Seres has been active in the capital market.

On the evening of July 2, Seres announced that its wholly-owned subsidiary, Seres Automotive Co., Ltd., intended to acquire 919 registered or pending AITO-related textual and graphical trademarks and 44 related design patents held by Huawei Technologies Co., Ltd. and its affiliates for a price of 2.5 billion yuan. Upon completion of this acquisition, all intellectual property rights related to AITO models will be transferred to Seres, making AITO an exclusive asset of Seres.

Fifty-four days after this transaction, Seres announced on the evening of August 25 that it would acquire a 10% stake in Huawei Yingwang for 11.5 billion yuan.

Regarding this transaction, Seres stated that "this investment in Yingwang marks an upgrade in the cooperation mode between Seres and Huawei to a 'business + equity' model, marking a new starting point for sustainable development in their cooperation from 1 to N. Seres will firmly support Huawei Yingwang in becoming an intelligent open platform for the automotive industry and strive to achieve an annual production and sales volume of one million AITO vehicles within three years, driving millions of supply orders for Huawei Yingwang."

While purchasing trademarks, increasing capital in subsidiaries, and acquiring Huawei Yingwang equity could be considered Seres' business strategies, its announcement on the evening of September 13 of a 5 billion yuan capital injection into Seres Automotive, along with its intention to acquire the project company responsible for building Seres' super factory, underscores Seres' ambition in the automotive market of the future.

The announcement states that Seres plans to acquire 100% of the equity in Chongqing Liangjiang New Area Longsheng New Energy Technology Co., Ltd. held by Chongqing Industry Investment Master Fund Partnership (Limited Partnership), Chongqing Liangjiang New Area Development and Investment Group Co., Ltd., and Chongqing Liangjiang New Area Industrial Development Group Co., Ltd. through the issuance of shares. The total value of this transaction is 8.164 billion yuan, with approximately 123 million shares to be issued at a price of 66.39 yuan per share. Upon completion, these shares will account for 7.53% of the total share capital.

Regarding this transaction, Seres stated that upon completion, Longsheng New Energy would become a wholly-owned subsidiary of Seres, and Seres would obtain ownership of the super factory. Judging from Seres' announcement, this transaction will play a vital role in "ensuring the safety, stability, autonomy, and controllability of the company's product production end, and improving the asset integrity and control of its critical business operations."

From an obscure small automaker to a well-known national brand, and from heavy losses to profitability, Seres' growth journey has spanned just a few short years. However, from today's perspective, partnering with Huawei, launching popular products, and advancing capital cooperation are precisely the right decisions Seres has made in the past few years.

These choices and decisions have not only enabled Seres to firmly establish itself in the wave of new energy vehicles but also position it as a potential leader in the automotive industry in the future.

Although there have been numerous doubts and suspicions from the outside during their cooperation, Huawei's brand appeal, technological research and development capabilities, and marketing prowess have undeniably empowered Seres. While Huawei's empowerment has not yet yielded similar results for other "*AITO" automakers, the success of AITO itself demonstrates that this model meets Seres' needs.

Standing on the shoulders of giants, Seres has gone even further.