Seres Group (601127.SS) has emerged as a standout player in China’s New Energy Vehicle (NEV) sector, driven by a combination of strategic partnerships, operational efficiency, and product innovation. The company’s H1 2025 net profit surged by 81.0% year-over-year, far exceeding its own forecasted range of 66.2–97.0% growth [1]. This performance, coupled with a 489.58% year-on-year revenue increase to ¥65.044 billion, underscores Seres’ ability to capitalize on the booming EV market while navigating challenges like declining overall NEV sales [4].
Strategic Synergy with Huawei: A Game-Changer
Seres’ collaboration with Huawei has been pivotal to its success. The automaker recently acquired a 10% stake in Huawei’s Newcool (Yinwang Intelligent Technology) for ¥11.5 billion ($1.6 billion), solidifying its position in the smart driving sector [3]. This partnership, part of the Harmony Intelligent Mobility Alliance (HIMA) model, allows Seres to leverage Huawei’s full-stack smart car solutions, including advanced AI-driven cockpit systems and cloud-based technologies. Huawei’s smart driving unit, which turned profitable in 2024, has become a critical differentiator for Seres, enabling the Aito brand to capture 40.6% of the company’s total NEV sales in H1 2025 [4].
The strategic investment also aligns with Huawei’s broader ambition to dominate the global intelligent mobility market. By co-developing the Aito M9 luxury model—Seres’ most successful product—Huawei’s technology has helped the automaker achieve a 6.28% year-on-year sales increase in this segment, despite a 14.35% decline in overall NEV sales [2]. This premium positioning suggests Seres is effectively monetizing Huawei’s cutting-edge solutions, a trend likely to persist as demand for smart EVs grows.
Product Innovation and Financial Resilience
Seres’ expanding product lineup and technological advancements further bolster its long-term growth potential. At Auto Shanghai 2025, the company unveiled its Intelligent Safety ecosystem, featuring a 720° protection architecture and 24/7 cloud-based battery monitoring [2]. These innovations address critical consumer concerns around safety and reliability, differentiating Seres in a crowded market. Additionally, the launch of the Aito M9 2025 and upgraded M8/M5 models has expanded Seres’ mobility offerings, targeting both luxury and mass-market segments [5].
Financially, Seres has secured ¥10 billion in strategic funding from domestic institutions and industrial funds, supporting capacity expansion, debt reduction, and R&D [2]. However, the company’s asset-liability ratio of 76.83% and a net operating cash outflow of ¥7.6 billion in Q1 2025 highlight liquidity challenges [2]. Despite these risks, Seres’ cost optimization strategies and scale in NEV production have driven profitability, with net profit attributable to shareholders reaching ¥1.625 billion in H1 2024 [4].
Valuation Metrics and Investor Sentiment
Seres’ valuation appears mixed. The stock trades at a trailing P/E ratio of 29.10 and a forward P/E of 19.49, with an EV/EBITDA of 14.74 [6]. While these metrics exceed the Vehicles & Parts industry median of 10.12, they reflect investor optimism about Seres’ growth trajectory [2]. Analysts have set a 12-month price target of ¥154.73, implying an 8.67% upside from current levels [6]. The recent 4% stock rise, following the announcement of the Newcool investment and ¥5 billion in strategic funding, aligns with fundamentals but may also signal a buying opportunity for those betting on Seres’ Huawei-driven momentum [5].
Risks and Opportunities
While Seres’ strategic alliances and product innovation are compelling, risks persist. Declining NEV sales and reduced R&D investment could erode long-term competitiveness [2]. Additionally, geopolitical uncertainties, such as U.S.-China trade tensions and Middle East instability, may impact investor sentiment [5]. However, Seres’ focus on premium models, green energy partnerships (e.g., CATL’s CTP 2.0 batteries), and a planned Hong Kong IPO position it to weather short-term volatility [4].
Conclusion
Seres Group’s 81% net profit growth and deepening partnership with Huawei underscore its potential to dominate China’s EV market. The company’s ability to monetize smart driving technology, expand its premium product lineup, and secure strategic funding creates a strong foundation for long-term value creation. While valuation metrics suggest a premium over peers, the 4% stock rise appears justified by fundamentals, particularly for investors willing to navigate liquidity risks. As Seres advances its Intelligent Safety ecosystem and scales production, the stock may offer a compelling entry point for those aligned with the EV revolution.
Source:
[1] Seres Group H1 net profit up 81.0% Y/Y [https://www.marketscreener.com/news/seres-group-h1-net-profit-up-81-0-y-y-ce7c50ddda88f425]
[2] SERES Lands ¥5 Billion in Strategic Funding for Expansion and Debt Reduction [https://www.ichongqing.info/2025/06/30/seres-lands-%C2%A55-billion-in-strategic-funding-for-expansion-and-debt-reduction/]
[3] Seres to Buy 10% Stake in Huawei’s Auto Unit Newcool for $1.6 Billion [https://cnevpost.com/2024/08/25/seres-to-buy-10-pct-stake-in-huaweis-newcool/]
[4] SERES Debuts Intelligent Safety at Auto Shanghai 2025 [https://www.prnewswire.com/news-releases/seres-debuts-intelligent-safety-at-auto-shanghai-2025-setting-industry-standard-and-capturing-global-spotlight-302438432.html]
[5] Seres Group Co Ltd (601127) Stock Forecast & Price Target [https://www.investing.com/equities/chongqing-sokon-industry-group-co-l-consensus-estimates]
[6] Seres Group Co.,Ltd (SHA:601127) Statistics & Valuation [https://stockanalysis.com/quote/sha/601127/statistics/]
