SERES "letting go"

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Author | Zhou Zhiyu

Seres is trying to make its label in the capital market clearer.

On February 9, Seres announced that it had recently signed a "Cooperation Agreement" with the government of Shapingba District, Chongqing, and would strip out the assets associated with its new energy sub-brand "Landon Auto" to establish a new independently operated company.

The equity structure of the new company has emerged: Party A SPV (representing the Shapingba District government's investors) holds about 33.5%, Seres and its designated entities hold about 32%, the new company's employee shareholding platform accounts for 16%, and the remaining 18.5% is held by other investors. The new company's board of directors consists of five members, with Seres appointing only one person. This means that after all parties complete their investment, Seres will shift from being the controlling shareholder to a participating shareholder, and Landon Auto will be "removed from the books."

However, Seres has also reserved some space. Seres chose to hold 32%, slightly less than the government's 33.5%. On one hand, Shapingba District government’s share exceeds one-third, which means it has veto power over major decisions, ensuring local industrial development guidance. On the other hand, Seres and its designated entities hold 32%. While losing control, with the synergy from the employee shareholding platform (16%), they can still create some checks and balances in the governance structure.

People close to Seres revealed that Chairman Zhang Xinghai’s strategic planning for this year mainly focuses on two areas: consolidating the AITO brand and accelerating overseas expansion, along with exploring some innovative businesses.

This helps to understand why Seres is decisively letting go of Landon now. By stripping off Landon, Seres' high-end reputation in the capital market will become clearer.

Landon Auto, as Seres' economical new energy brand, was born in March 2023 to tap into the 100,000–150,000 RMB mass market. However, in previous Seres financial reports, Landon Auto did not appear as an independent reporting segment but was hidden under "new energy vehicles," only revealing traces in detailed sales or major financial indicators of subsidiaries.

After entering 2025, constrained by intensified market competition and the lack of scale effect, Landon’s performance diverged greatly from the AITO series. In the first half of 2025, AITO series sold about 152,000 units, while Landon sold only about 20,000 units.

With models like AITO M9 and M8 having average unit prices over 400,000 RMB, Seres' gross profit margin reached a historic high of 28.93% in the first half of 2025. In contrast, Landon, stuck in the price war zone with its small scale, is likely at the edge of loss or low margin.

By stripping away assets on the edge of profitability, Seres' financial reports in 2026 and beyond will become extremely pure: no longer diluted by price wars in the entry-level market, focusing on the profitability of high-end business with Huawei collaboration.

Shengsong Capital Executive Director Shen Meng also analyzed for Wall Street Insights that Seres stripping off Landon Auto helps Seres' market capitalization management in the secondary market. "Currently, the EV market is excessively competitive, with low returns for mid-low priced products, which suppresses the valuation concept of listed companies. As long as concept speculation persists, this operation will amplify the extent of emotional volatility."

A few years ago, Seres was still a marginal car company in Chongqing, focusing on commercial vehicles and low-end micro gasoline cars. With deep empowerment from Huawei, this company transformed in just a few years from less than 20 billion RMB revenue to nearly 500,000 units sold annually, becoming the world’s fourth profitable new energy car company.

However, behind the highlights lies profound anxiety. Questions about its "independence" and "long-term value" have never ceased. Financial data reveal the cost of this structural binding: from 2022 to the first half of 2025, Seres paid over 75 billion RMB in procurement to Huawei, with Huawei’s procurement accounting for over 30% of total procurement. In the first half of 2025, about 141,000 RMB from every AITO unit sold went to the Huawei system.

On the channel side, Seres' sales expenses rose from 4 billion RMB in 2022 to 18.1 billion RMB in 2024, with sales expenses alone accounting for nearly one-third of revenue in the first half of 2025. This deep binding brought explosive growth, but also led to concerns about the loss of gross profit distribution power for Seres.

A more urgent challenge is that, as Huawei's "circle of friends" expands, "Harmony Intelligent Mobility" now runs five parallel brands (AITO, Zhijie, Xiangjie, Zunjie, Shangjie). The strategic uniqueness of AITO as the pioneer is gradually being diluted; the once exclusive resources are evolving into industry-wide resources, and the risk of internal competition and self-dilution becomes prominent in 2026.

Against this backdrop, stripping off Landon is essentially a resource swap for Seres. It needs to withdraw from low-yield scale expansion and invest its limited funds and energy into core technology R&D and strategic deployment to cope with the increasingly homogeneous competition within Harmony Intelligent Mobility.

After stripping off Landon, gaining further recognition in the capital market will not be easy for Seres. Financial data show that from 2022 to the first half of 2025, Seres' overseas revenue remained limited and volatile, not yet forming stable profit contributions.

Currently, Seres has a production base in Indonesia, with annual capacity around 20,000 units. However, in the first half of 2025, the plant’s capacity utilization was only 4%. Even though Seres positions this as a global strategic foothold, how to convert brand momentum into real overseas sales in Southeast Asia and globally remains a big test.

Beyond the car business, Seres is systematically laying out a new track of "mobile intelligent agents." In early 2026, Shanghai Seres Phoenix Technology Co., Ltd. was established in the new Lingang area, marking Seres’ official entry into intelligent robots and AI large model R&D.

Du Wei, the core executive who led the development of the super range-extended system, serves as the legal representative of the new company, sending a clear signal: Seres intends to systematically transfer the hardware manufacturing, system integration, and software capabilities accumulated in the new energy vehicle field to the next generation of intelligent terminals.

This is not only to seek a new growth ceiling but also to increase technical discourse in the second half of intelligent manufacturing. Whether it’s in-depth cooperation with ByteDance, Beihang University, or intensive recruitment in embodied intelligence large models, Seres is trying to prove to the market that it is crossing beyond pure vehicle manufacturing to master the future technical boundaries.

But compared to its main automotive business, innovative businesses are still in the starting phase. For pragmatic investors, the market performance and profitability of the AITO brand at home and abroad remain the key indicators for evaluating this deeply-bound vehicle company with Huawei.

Seres has learned to "let go," which is a mark of maturity for a car company; but after learning to "let go," whether it can independently accomplish global delivery and breakthroughs in embodied intelligence without Huawei’s hand-holding will be the key to its future valuation.

Risk Warning and DisclaimerThe market has risks, investment should be cautious. This article does not constitute personal investment advice, nor does it take into account specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are suitable for their particular situation. Investment based on this article is at your own risk. ```