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Securities Times reporter Liu Qian

Seres (601127) and Huawei's Automotive BU have made substantial progress in their strategic investment and cooperation. Seres announced on the evening of July 28 that it plans to invest in Shenzhen Yinwang Intelligent Technology Co., Ltd. (hereinafter referred to as "Yinwang") to jointly support Yinwang in becoming a world-class leader in the automotive intelligent driving system and components industry and an open platform serving the automotive industry.

Seres stated in the announcement that the specific investment amount, transaction method, transaction price and other terms shall be subject to the final transaction documents signed by both parties. If the transaction is completed, Yinwang will become a subsidiary of the company, and the scope of the company's consolidated financial statements will not change. At the same time, this transaction is not expected to constitute an affiliated transaction, is not expected to constitute a reorganization and listing, and will not lead to a change in the control of the listed company.

On January 16 this year, Yinwang Company, a wholly-owned subsidiary of Huawei Technologies Co., Ltd., was established with a registered capital of 1 billion yuan. It is engaged in the research and development, design, production, sales and services of automotive intelligent systems and component solutions. Its main business scope includes automotive intelligent driving solutions, automotive intelligent cockpits, intelligent vehicle control, intelligent vehicle cloud, and on-board lights.

Since SERES established a cross-border business partnership with Huawei in 2021, the two sides have fully leveraged their respective advantages and opened up a new cooperation model between the real economy and the digital economy. The two sides have launched models such as the M5, M7, and M9 through cross-border cooperation. Overall, these models have achieved good sales results.

On the evening of July 9, SERES released its performance forecast, estimating operating revenue of 63.9 billion yuan to 66 billion yuan in the first half of the year, a year-on-year increase of 479% to 498%; net profit of 1.39 billion yuan to 1.7 billion yuan, turning losses into profits year-on-year; at the same time, SERES expects its net profit after deducting non-recurring items to be 1.19 billion yuan to 1.5 billion yuan.

It is worth mentioning that Seres is expected to achieve semi-annual profit again in six years. Data shows that in the first half of 2018, Seres achieved a net profit of 237 million yuan, and a non-net profit of 54.38 million yuan; from 2019 to 2023, the net profit in the semi-annual reports of each year was a loss of 281 million yuan, 430 million yuan, 481 million yuan, 1.727 billion yuan and 1.34 billion yuan respectively, and the non-net profit was a loss of 392 million yuan, 742 million yuan, 1.126 billion yuan, 1.714 billion yuan and 1.885 billion yuan respectively.

Regarding the substantial improvement in operating performance, Seres said that it had exceeded its doubling plan in the first half of this year, with a significant improvement in product structure, and the company ranked sixth in sales of luxury brands in the Chinese market. In addition, Seres adheres to the business policy of technological innovation and cost contribution, and the new quality productivity has led to the continuous improvement of the company's operating quality, profit and tax growth, and continued improvement in profitability.

At present, the cooperation between SERES and Huawei is still deepening. On the evening of July 2, SERES announced that its holding subsidiary SERES Automobile Co., Ltd. plans to acquire 919 trademarks (including the text and graphic trademarks of the "Wenjie" series) and 44 related design patents held by Huawei Technologies Co., Ltd. and its affiliates for a total price of 2.5 billion yuan.

SERES stated in the announcement that this transaction will not affect the joint business of the two parties, and the two parties will further deepen their cooperative relationship. Based on the consistency of product and brand market recognition, the underlying assets of this transaction will be exclusively used for the joint business of the two parties.