SERES(SH:601127) BOCOM International·2025-07-21 09:27Investment Rating - The report initiates a "Buy" rating for the company with a target price of RMB 180.5, indicating a potential upside of 38.4% from the current price of RMB 130.40 [4][17]. Core Insights - The company is experiencing a significant transformation towards high-end electric vehicles, with its brand "Wenjie" establishing a strong presence in the luxury market, particularly against traditional luxury brands [5][10]. - The collaboration with Huawei is enhancing the company's technological capabilities and brand perception, driving profitability and market competitiveness [10][15]. - The expected launch of the updated M7 model is anticipated to strengthen the company's position in the competitive 250,000 to 350,000 RMB SUV market [5][14]. Financial Overview - Revenue projections show substantial growth, with expected revenues of RMB 35,842 million in 2023, increasing to RMB 175,174 million by 2025, reflecting a year-on-year growth of 305% [9]. - Net profit is projected to turn positive in 2024, reaching RMB 5,946 million, with earnings per share expected to rise to RMB 3.94 [9]. - The company’s gross margin is expected to reach 27.1% by 2025, significantly higher than industry peers, driven by the high-end product mix [10][17]. Market Positioning - The high-end electric vehicle market in China is projected to grow, with sales expected to reach 2.6 million units by 2024, capturing over 23% of the total electric vehicle market [10][19]. - The company's Wenjie M9 model is leading sales in the 450,000 to 600,000 RMB segment, indicating a successful penetration into the luxury SUV market [10][33]. - The Wenjie brand is expected to capture over 50% of the company's total sales by 2025, with the M8 and M9 models driving this growth [17][39]. Competitive Landscape - The report highlights the competitive dynamics in the high-end SUV market, where the Wenjie M9 is positioned against traditional luxury brands like BMW and Mercedes-Benz, offering superior technology and value [10][34]. - The company is leveraging its partnership with Huawei to enhance its product offerings, particularly in smart driving and intelligent cockpit features, setting it apart from competitors [15][32]. - The report notes a shift in consumer preferences towards high-tech and electric vehicles, benefiting domestic brands like Wenjie, which are rapidly gaining market share [19][25].