Seres Forecasts H1 2026 Loss of RMB 1.5–1.8 Billion as Aito Swings to Loss

**SERES (SHA: 601127; HKEX: 09927) Issues Profit Warning for First Half of 2026** On July 12, 2026, SERES released its earnings guidance for the first half of 2026, forecasting a net loss attributable to shareholders of RMB 1.5 billion to RMB 1.8 billion, compared to a net profit of RMB 29.41 billion in the same period last year. The company also expects a net loss after adjusting for non-recurring gains and losses of RMB 2.2 billion to RMB 2.5 billion. Its core subsidiary, SERES Automobile Co., Ltd. (AITO), is projected to report a net loss attributable to shareholders of RMB 1.05 billion to RMB 1.3 billion in H1 2026, with an adjusted net loss of RMB 1.7 billion to RMB 1.95 billion. For Q2 2026 alone, AITO’s net profit attributable to shareholders is expected to be between -RMB 21.5 billion and -RMB 19.0 billion, marking a shift from profit to loss. The company attributed the sharp decline in performance primarily to rising prices of key raw materials—including memory chips, industrial metals, and lithium carbonate—which have significantly increased production costs. Additionally, under prudent accounting principles, SERES has written down the book value of certain legacy assets whose applicability has been limited due to technological iteration and model transitions, further impacting profitability. Despite the losses, SERES stated that it maintains ample cash reserves and a sound asset-liability structure, ensuring continued operational viability and resilience against risks. In Q1 2026, the company reported revenue of RMB 25.746 billion, up 34.46% year-over-year (YoY); net profit attributable to shareholders was RMB 7.54 billion, a modest increase of 0.89% YoY; however, adjusted net profit was only RMB 1.03 billion, down 73.87% YoY. In terms of sales volume, SERES produced 33,685 new energy vehicles (NEVs) in June 2026, down 27.24% YoY, and sold 33,669 units, down 26.94% YoY. Specifically, AITO brand production in June totaled 29,558 units, down 31.72% YoY, while sales reached 30,331 units, down 30.19% YoY. For the first half of 2026, SERES delivered a total of 196,580 vehicles, down 1.02% YoY, while AITO series deliveries totaled 160,779 units, up 5.60% YoY. Regarding share price, as of July 13, 2026, SERES’ A-share price had fallen to approximately RMB 55 from its year-to-date high of around RMB 130. Historically, since partnering with Huawei in 2021 to launch the AITO brand, SERES turned profitable: in 2024, it recorded revenue of RMB 145 billion and net profit of nearly RMB 60 billion; in 2025, revenue reached RMB 165.05 billion with net profit of RMB 59.6 billion, marking two consecutive years of profitability. In 2025, AITO delivered over 420,000 vehicles, achieving an overall NEV gross margin of 28.8%, and invested RMB 12.51 billion in R&D, up 77.4% YoY. In June 2026, Zhang Xinghai, Chairman of SERES Group, publicly noted that the unit price of memory chips had surged from RMB 20 to nearly RMB 100, and lithium carbonate prices rose from RMB 80,000 per ton to RMB 180,000 per ton, increasing AITO’s per-vehicle cost by RMB 15,000–20,000 and exerting significant pressure on margins. Additionally, SERES is gradually divesting its Landian automotive business. Originally launched by SERES in March 2023 and targeting the RMB 100,000–150,000 segment, Landian’s first model, the E5, was cut by RMB 40,000 in price just nine months after launch. In 2025, Landian retail sales totaled 20,400 units, down 48.36% YoY. In late May 2026, Landian completed a capital increase of approximately RMB 6.671 billion and was renamed Saidu Technology, with SERES’ stake reduced to about 32.96%, relinquishing control. Saidu Technology has since unveiled a new brand, AIVA, and plans to launch its first mass-produced model, the ME7, within 2026, targeting the premium segment above RMB 200,000, with strategic partners including ByteDance and CATL.