JAC Motors has been performing quite impressively lately.

First, in terms of financial performance. According to the earnings forecast disclosed by JAC Motors not long ago, the company is expected to achieve a net profit of approximately 290 million yuan in the first half of the year, a year-on-year increase of 86.86%; its non-GAAP net profit is about 78 million yuan, turning a profit compared to a loss of 243 million yuan in the same period last year.

Looking at a longer timeframe, JAC Motors had reported mid-year losses for four consecutive years since 2020, but this year it finally emerged from the quagmire of losses.

Beyond financial performance, JAC Motors' stock price has been even more remarkable.

After hitting a low of 10.26 yuan in February, its stock price has been fluctuating upward. As of the close on July 25, JAC Motors' stock price stood at 19.34 yuan per share. Although there has been a recent pullback, the stock price has nearly doubled in less than half a year.

Of course, this stock performance is closely tied to the boost from Huawei's Harmony Intelligent Driving concept. However, replicating Seres' success won't be easy, especially since Seres itself endured several tough years.

Struggling Forward

Over the past few years, JAC Motors has had a rough time.

Judging solely from financial reports, JAC Motors has seen declining revenue for several consecutive years.

Specifically, from 2019 to 2022, JAC Motors reported revenues of 47.36 billion yuan, 42.91 billion yuan, 40.31 billion yuan, and 36.58 billion yuan, with year-on-year growth rates of -5.58%, -9.41%, -6.05%, and -9.26%, respectively. It wasn't until 2023, against a low base, that JAC Motors' revenue began to "stop declining and rebound," reaching 45.02 billion yuan, a 22.97% increase year-on-year.

Entering 2024, JAC Motors continued its upward trend. In the first quarter, it reported revenue of 11.28 billion yuan, up 4.61% year-on-year.

In the first half of this year, although the latest earnings forecast did not disclose revenue figures, the company is expected to achieve a net profit of approximately 290 million yuan, up 86.86% year-on-year, and a non-GAAP net profit of about 78 million yuan, turning a profit compared to a loss of 243 million yuan in the same period last year.

JAC Motors attributed the improved performance in its earnings forecast to optimized debt structure, significantly reduced loan interest expenses, and increased foreign exchange gains due to currency fluctuations, leading to a substantial decrease in financial expenses compared to the same period last year.

However, sales data still reveals significant pressure. According to the production and sales report released on July 6, JAC Motors saw year-on-year declines in SUV, MPV, and sedan sales in the passenger vehicle segment in the first half of the year. Specifically, SUV sales totaled 37,539 units, down 37.12% year-on-year; MPV sales reached 8,190 units, down 18.34%; and sedan sales were 32,899 units, down 11.18% year-on-year.

On the other hand, in its more established commercial vehicle segment, JAC Motors achieved year-on-year growth in sales of light and medium-duty trucks, pickups, multi-purpose commercial vehicles, and buses.

For example, light and medium-duty truck sales totaled 74,496 units, up 9.88% year-on-year; pickup sales reached 28,621 units, up 4.11%; multi-purpose commercial vehicle sales were 13,376 units, up 36.25%; and bus sales stood at 2,714 units, up 68.99% year-on-year.

Boost from Huawei

Despite the lackluster sales performance, JAC Motors' stock price has been rising steadily in 2024.

Statistics show that after hitting a low of 10.26 yuan in February, the stock price has been fluctuating upward. As of the close on July 25, JAC Motors' stock price stood at 19.34 yuan per share. Although there has been a recent pullback, the stock price has nearly doubled in less than half a year. The primary driver behind this rally is undoubtedly its collaboration with Huawei.

According to media reports, on July 12, JAC Motors Chairman Xiang Xingchu revealed that the first product developed in collaboration with Huawei has entered the vehicle validation phase, with plans to roll off the production line by the end of this year and launch in the first half of next year. The factory producing this model is nearly complete, with an annual production capacity of 200,000 units.

Richard Yu, Huawei's Executive Director, also stated publicly: "The name of the product co-developed with JAC Motors hasn't been finalized yet, but it might be a million-level, ultra-high-end model."

Currently, there is limited coverage of this product in the market. According to Kanjian Finance's research, the product series co-developed by Huawei and JAC Motors is named "Zunjie," and the first model in the series will be based on the X6 pure electric platform, with an estimated length of around 5,200 mm and a wheelbase of approximately 3,200 mm, priced above 1 million yuan.

Indeed, Huawei's collaboration with Seres has yielded impressive results. Public data shows that in June, Aito's full lineup achieved a record monthly delivery of over 40,000 units; the Aito M9 model alone delivered 17,200 units in June, with cumulative orders exceeding 100,000 units, securing its position as the top-selling model in the 500,000+ yuan price range.

However, the question remains: Can JAC Motors replicate Seres' success? The answer is far from certain.

In its analysis of BAIC BluePark, Kanjian Finance pointed out that "the automotive market follows a 'pyramid' structure—the higher you go, the smaller the market becomes." BAIC BluePark's high-end executive-level new energy sedan already targets a limited audience, and JAC Motors' first product with Huawei, priced above 1 million yuan, will cater to an even narrower market.

Moreover, as mentioned earlier, Seres endured several tough years before reaching its current heights. From 2022 to 2023, Seres spent 4.82 billion yuan and 5.465 billion yuan on sales expenses alone, resulting in losses of 3.832 billion yuan and 2.45 billion yuan, respectively.

In contrast, JAC Motors' sales expenses from 2022 to 2023 were 1.458 billion yuan and 1.832 billion yuan, respectively. As of the first quarter of this year, JAC Motors had 13.16 billion yuan in cash on hand. While JAC Motors faces significant pressure to invest heavily, Seres' trajectory suggests that JAC Motors' future is full of possibilities.