Seres Group Drops Over 50% Year-to-Date, Q2 Loss Exceeds 2.2 Billion Yuan
N.R. Finch
Seres (赛力斯) hit the A-share daily limit-down on July 13, extending its year-to-date decline past 50%; the company guided for a first-half net loss of RMB 1.5–1.8 billion, implying a single-quarter Q2 loss exceeding RMB 2.2 billion — a triple squeeze of model transition, raw-material inflation, and asset write-downs, with Q3 new-model profitability now the market's key proof point.
Where does the RMB 2.2 billion loss come from?
Seres guided first-half 2026 net loss attributable to shareholders at RMB 1.5–1.8 billion; Q1 net profit was still positive at RMB 754 million.
This means → Q2 alone swung to a loss exceeding RMB 2.2 billion, with the entire reversal concentrated in April–June.
Seres Auto, the group's core vehicle unit, is expected to lose RMB 1.05–1.3 billion for the half — the bulk of the total.
Revenue was still growing in Q1 — why did profit collapse?
Q1 revenue hit RMB 25.75 billion, up 34.5% year-on-year, yet net profit grew just 0.89%; non-GAAP net profit fell 73.9%, and gross margin dropped 1.38 percentage points.
In plain terms = Seres sold more cars but made far less on each one — the widening gap between revenue and profit was already a warning signal.
Zheshang Securities broke down the mix: the high-margin AITO M9 saw sales drop 49.6% YoY, the M5 fell 47.5%, while the lower-priced M7 surged 122.3%. The profitable models shrank; the thinner-margin model carried the volume.
New models have launched — why were June sales still falling?
From April, the next-generation M9 and M6 went on sale: the M6 delivered over 30,000 units in its first 54 days; the new M9 collected over 42,000 pre-orders in its first month.
Yet June sales for Seres Auto came in at just 30,300 units, down 30.2% YoY; the group overall sold 36,200 units, down 28.1%.
This reflects the classic pain of a model transition — old models fade before new-model production fully ramps, creating a window where volumes sag.
What happened on the cost side?
Chairman Zhang Xinghai disclosed in June that memory-chip prices had risen and lithium carbonate — a core battery material — jumped from roughly RMB 80,000/tonne to RMB 180,000/tonne, adding RMB 15,000–20,000 to the average manufacturing cost per AITO vehicle.
The company's interim guidance also cited write-downs on legacy assets whose compatibility was limited after the technology and model refresh.
In plain terms = raw materials made each car more expensive to build, while older equipment and parts lost value because of the generation change — both charges landed in Q2 at the same time.
What are brokerages saying?
Kaiyuan Securities on July 4 cut its 2026 net-profit forecast for Seres by 36.2% to RMB 6.43 billion, citing intensifying premium-SUV competition, faster product cycles, and consumers waiting for newer models.
Citi on June 11 trimmed Seres' 2026–2028 revenue estimates by 15–17%, pointing to tepid volumes and tougher competition.
Seres management countered that cash reserves are ample, the balance sheet is sound, and orders plus deliveries for the new M9 and M6 are already climbing.
What should investors watch in Q3?
Once the full interim report is published, the exact breakdown of cost inflation and asset write-downs will become clearer.
This means → the market's single most important proof point is whether the new M9 and M6 can generate enough profit in Q3 to show the loss was a one-off transition cost, not a structural margin decline.
If Q3 profit fails to rebound meaningfully, the "transition pain" narrative risks being re-priced by the market as "a step-down in earnings power."
Content is for reference only, not financial advice.