SERES(SH:601127) Xin Lang Zheng Quan·2025-11-05 10:07Core Viewpoint - The IPO of Seres in the Hong Kong market faced significant challenges, including high valuation concerns, performance pressures, and diminishing influence from its partnership with Huawei, leading to a precarious debut on November 5, 2025, where the stock nearly fell below its issue price [1][10]. Valuation and Market Demand - Seres' IPO was priced at HKD 131.50 per share, reflecting a 22.7% discount compared to its A-share closing price of RMB 155.19, which raised questions about its valuation [3][4]. - Despite a high subscription rate of 8.6 times, the actual exercise of the issuance adjustment right was only about 56%, indicating weak institutional demand [5][12]. Financial Performance - For the first three quarters of 2025, Seres reported revenue of RMB 110.5 billion, a modest year-on-year growth of 3.7%, while net profit was RMB 5.3 billion, showing a decline of 1.7% in the third quarter [6][9]. - The company is projected to achieve a total revenue of RMB 178.2 billion for 2025, but as of the third quarter, it had only completed 60% of this target [6][9]. Competitive Landscape - The competitive environment in the electric vehicle market is intensifying, with Seres experiencing a 4.3% decline in cumulative sales in the first ten months of 2025 [7][10]. - Compared to competitors like BYD and others, Seres' valuation remains high, with a projected PE ratio of 44.8 for 2024, significantly above the industry average [8][10]. Market Sentiment and Investor Behavior - The first-day trading volatility reflected a divided sentiment among institutional investors, with major foreign brokerages like Morgan Stanley and UBS net selling shares, indicating a lack of confidence in Seres' valuation and performance [11][12]. - The reliance on Huawei for competitive advantage is seen as a risk, as the market favors companies with independent capabilities and profitability [10][13].