SERES (09927.HK) -0.680 (-1.646%) Short selling $15.61M; Ratio 9.263% opened 0.05% lower today (14th) and hit a record low of HKD40.3 for its H shares. It is now trading at HKD40.72, down 1.45%, with turnover of 957,000 shares involving HKD39.1948 million.

Citi said in a report that SERES (09927.HK) -0.680 (-1.646%) Short selling $15.61M; Ratio 9.263% issued a profit warning forecasting a net loss of RMB1.5 billion to RMB1.8 billion for 1H25, implying a net loss of RMB2.25 billion to RMB2.55 billion in 2Q25, swinging from profit to loss YoY and falling far short of market expectations, which had forecast a net profit of RMB1.03 billion for the second quarter. The earnings deterioration was mainly dragged down by the AITO brand, which recorded a net loss of RMB1.9 billion to RMB2.15 billion in 1H25 due to inflation in raw material costs including chips, metals and lithium carbonate, as well as asset impairment arising from model upgrades and technology iterations.

The broker said that due to the significant deterioration in SERES' recent profitability, it decided to change its valuation methodology from PEG to price-to-sales (P/S). Considering margin pressure from cost inflation, market share loss amid intensifying competition, and asset impairment risks from model upgrades, Citi downgraded SERES' H-share rating to "Sell" from "Neutral", while maintaining a "Sell" rating on SERES (601127.SH) -1.590 (-2.949%) A shares.

In addition, Citi lowered its sales volume forecasts for SERES for FY2026-2028 by 4% to 7% to reflect recent market share losses, and reduced gross margin forecasts for the same period by 1.9 ppts. The broker also expected an asset impairment loss of RMB1.8 billion in FY2026. Citi sharply cut its H-share TP from HKD63.7 to HKD33.5, while lowering its A-share TP from RMB55.4 to RMB37.4. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-13 16:25.) (A Shares quote is delayed for at least 15 mins.)