Profits under pressure, Seres has fallen by more than 50% this year.

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The hottest automotive stock in the market is experiencing growing pains.

On the afternoon of July 13, Seres A-share hit the daily limit down, with its stock price down over 50% this year. Its Hong Kong stock saw a slight rebound from the day's lows in late trading, eventually closing down 13.68%.

The direct trigger was Seres’ interim loss forecast, but the stock's downward trend did not start with this announcement.

In the past half year, AITO’s product pace, profit performance, and cost changes have successively given warning signals. The loss forecast merely concentrated these issues onto the profit statement.

In the first half of 2025, Seres’ net profit attributable to shareholders was 2.941 billion yuan, up 81.03% year-on-year. At that time, AITO M9 deliveries exceeded 62,000 units, M8 deliveries over 35,000 units, and these two high-priced models supported AITO’s performance in the high-end SUV market.

In the first quarter this year, the changes were first seen in model structure and profit growth rate. Seres’ revenue was 25.746 billion yuan, up 34.46% year-on-year; net profit attributable to shareholders was 754 million yuan, up only 0.89% year-on-year; net profit excluding non-recurring items was 103 million yuan, down 73.87% year-on-year, and gross margin also fell 1.38 percentage points compared with the same period last year.

Revenue continued to grow, but profit did not grow in sync.

A report by CMB Securities in May 2026 pointed out that AITO M9 sales fell 49.6% year-on-year in Q1, M5 fell 47.52% year-on-year, while M7 grew 122.26% year-on-year. Operating costs grew faster than revenue, with R&D and marketing costs also rising noticeably. After the M9 entered its replacement cycle, more sales were picked up by models like the M7.

However, the new models haven’t yet formed stable deliveries, old models are being adjusted, and profits came under pressure first.

After April, AITO began to fill the gap with new products. The new generation M9 and M6 were successively launched, with the M6 delivering over 30,000 units within 54 days of launch; the new M9 saw more than 42,000 preorders one month after launch. Seres data shows that AITO delivered about 168,200 new vehicles in the first half, up 10.2% year-on-year.

The pressure during the product transition period did not disappear immediately.

In June, Seres' auto sales were 30,300 units, down 30.19% year-on-year; Seres Group’s overall sales were 36,200 units, down 28.10% year-on-year. On June 11, Citi downgraded Seres’ 2026 to 2028 revenue forecast by 15% to 17% citing flat sales performance and intensifying competition.

A report from Kaiyuan Securities on July 4 mentioned that the year-on-year growth rate in AITO’s total sales has continuously shrunk since early this year and turned negative since May, with M8 and facelifted M7 performing weakly recently. The report attributes this to intensified competition in high-end SUVs, rapid model iteration, and some consumers waiting for new models. Based on sales and competitive pressure, Kaiyuan Securities lowered Seres’ 2026 net profit forecast for shareholders by 36.2% to 6.43 billion yuan.

Aside from product transition, rising costs further squeezed profit in Q2.

Zhang Xinghai publicly stated in June that price hikes in memory chips and lithium carbonate (rising from about 80,000 yuan/ton to 180,000 yuan/ton) increased AITO’s average single vehicle manufacturing cost by 15,000 to 20,000 yuan. In its half-year performance forecast, Seres also cited price increases of memory chips, industrial metals, and lithium carbonate as reasons for projected losses, and said the company adjusted asset book values due to limited compatibility of certain inventory assets following tech iteration and model changes.

This led to the concentrated losses in Q2. Seres estimates net loss attributable to shareholders in the first half at 1.5 to 1.8 billion yuan, while Q1 was still profitable at 754 million yuan, meaning Q2 losses exceeded 2.2 billion yuan; among them, Seres Auto expects H1 losses of 1.05 to 1.3 billion yuan.

Seres emphasizes its abundant cash reserves and healthy balance sheet. Orders and deliveries for the new M9 and M6 have begun to grow. But regarding this round of share price declines, what the market sees first is: the prolonged product iteration lengthened profit recovery, while rising costs and asset adjustments in Q2 amplified profit pressure.

With the official disclosure of the interim report next, the market will see the specific impact of cost increases and asset adjustments. As for how much profit the new M9 and M6 will bring, that remains to be seen in the third quarter earnings report.

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