Seres flags H1 loss on rising material costs, asset writedowns

• Seres expects a net loss of 1.5 billion yuan ($220 million) to 1.8 billion yuan for the first half of 2026, compared with a profit of 2.94 billion yuan a year earlier.
• Rising raw material prices and impairment of existing assets weighed on results, with core subsidiary Aito swinging to a loss in the second quarter.

Chinese automaker Seres (HKEX: 9927) said on Sunday that it expects a net loss attributable to shareholders of 1.5 billion yuan ($220 million) to 1.8 billion yuan for the first half of 2026, compared with a profit of 2.94 billion yuan a year earlier.

The Huawei carmaking partner expects a net loss excluding non-recurring items of 2.2 billion yuan to 2.5 billion yuan for the first half, compared with a profit of 2.47 billion yuan a year earlier.

In a filing to the Shanghai Stock Exchange, Seres said its production costs rose due to increases in the prices of major raw materials such as memory chips, industrial metals and lithium carbonate.

At the same time, based on the principle of prudence, the company adjusted the book value of some existing assets whose adaptability has been limited by technological iteration and model upgrades.

As a result of these factors, the performance of the company's core subsidiary Aito fluctuated, swinging from profit to loss. The subsidiary operates the Aito brand jointly built by Seres and Huawei.

According to the filing, Aito's net loss attributable to shareholders is expected to be 1.9 billion yuan to 2.15 billion yuan for the second quarter, and 1.05 billion yuan to 1.3 billion yuan for the first half.

Seres posted a net profit attributable to shareholders of 754 million yuan in the first quarter. Based on this, the company's overall net loss attributable to shareholders for the second quarter was about 2.25 billion yuan to 2.55 billion yuan, swinging from profit to loss on a sequential basis.

In terms of sales, the Seres Group's cumulative sales for the first half were 196,580 vehicles, down about 1% year-on-year. Of these, cumulative NEV sales were 178,777 units, up 3.87% year-on-year.

However, performance weakened notably in June. Group sales for the month were 36,194 vehicles, down 28.1% year-on-year, while NEV sales were 33,669 units, down 26.9% year-on-year.

Seres said the company currently maintains ample cash reserves and a sound balance-sheet structure, giving it strong going-concern capability and risk resilience.

Last month, Seres-backed Saidou Technology unveiled a new AI (artificial intelligence) car brand, Aiva, with its first mass-produced model, the ME7, expected to debut within 2026.

Through an earlier asset restructuring, Seres has already carved out the business from the listed company's consolidated statements. Chongqing state-backed Shaci Zhiyuan became Saidou's largest shareholder, and CATL (HKEX: 3750) also participated in the investment.

The move is seen as helping to ease the drag of loss-making operations on the listed company, while reducing Seres's excessive reliance on the Aito brand it developed with Huawei.

($1 = 6.7770 yuan)