Core Viewpoint - The article focuses on the operational performance and development trends of Seres, highlighting its recent financial activities and the implications for future growth potential [5][6][10]. Financial Performance - Seres has become the largest domestic vehicle listing company in terms of fundraising scale and market capitalization, surpassing Chery Automobile [5]. - The company completed two significant expenditures this year: acquiring Longsheng New Energy Super Factory for over 8.1 billion yuan and purchasing a 10% stake in Yiwang Company for 11.5 billion yuan, which supports its future growth plans [6]. - Seres aims to achieve a production capacity of over 1 million vehicles by 2027, with projected annual sales of around 800,000 vehicles based on new model launches [9][19]. Sales and Revenue Trends - In the first ten months of 2025, Seres' cumulative sales reached 356,000 vehicles, showing a year-on-year increase of only 1%, with the Wanjie brand experiencing a slight decline in growth [9]. - The revenue and profit structure for the first three quarters of Seres showed a slight increase in revenue to 1,105 billion yuan, with a gross margin of 29.4% and a net margin of 5.1% [10][13]. Profitability and Cost Structure - Despite stagnant sales and revenue growth, Seres has improved its profitability, with a significant increase in net profit by 65.3% year-on-year [10]. - The gross margin has been on an upward trend, indicating that the introduction of new models like the Wanjie M8 has positively impacted the average selling price and profitability [13][14]. - However, the company faces rising external costs, leading to a "stagflation" scenario where expenses increase despite declining sales, creating uncertainty for future growth [14][18]. Market Position and Competitive Landscape - Seres is maintaining a pricing strategy that contrasts with the increasing competition in the domestic mid-to-large-sized new energy SUV market, as evidenced by the pricing of the new M7 model [18][19]. - The company’s ability to sustain its pricing power is linked to its production capacity utilization and brand influence, but it may face challenges if competition intensifies [19][20]. Future Outlook - The growth trajectory of Seres is contingent on achieving annual sales growth of around 40% over the next two years; otherwise, its market value may decline significantly [20]. - The company's operational model, particularly its collaboration with Huawei, may limit its flexibility in managing costs and expanding its product range beyond the new energy SUV segment [18][20].

Core Viewpoint - The performance of Seres this year reflects a "stagflation" situation, indicating that its rigid costs may limit its growth potential [1]. Group 1: Company Overview - Seres has become the largest domestic vehicle listing company this year, surpassing Chery Automobile, but did not achieve the expected "opening red" upon its debut in the Hong Kong stock market [2]. - The company completed two significant expenditures this year: acquiring Longsheng New Energy Super Factory for over 8.1 billion yuan and purchasing a 10% stake in Yingwang Company for 11.5 billion yuan, which supports its future growth expectations [3]. Group 2: Sales and Financial Performance - For the first ten months of 2025, Seres' cumulative sales reached 356,000 units, a year-on-year increase of 1%, with the Wanjie series contributing 325,000 units, showing a decline of 0.6% [4]. - The revenue and profit structure for the first three quarters showed a revenue of 110.5 billion yuan with a gross margin of 29.4% and a net margin of 5.1%, indicating a significant improvement in profitability despite stagnant sales growth [4]. Group 3: Profitability and Cost Structure - Seres' gross margin has been increasing, recorded at 27.6%, 28.9%, and 29.4% for the first quarter, half-year, and first three quarters respectively, while the average vehicle price has also risen [4]. - The sales expense ratio has been increasing, with significant components being advertising and service fees, which may indicate a strategic focus on brand building despite rising costs [4][5]. Group 4: Market Position and Competitive Landscape - The pricing strategy for the new M7 model reflects a continued increase in prices, contrasting with the competitive landscape where other brands are lowering prices [5]. - Seres' production capacity is expected to reach one million units by 2027, which is crucial for achieving its sales targets, but the current high capacity utilization may limit pricing flexibility [5][6]. Group 5: Future Outlook - The company may face limitations in expanding its model categories due to the competitive environment and its reliance on the Huawei intelligent driving system, which could hinder its growth in the electric SUV segment [6]. - If Seres cannot achieve annual growth rates of around 40% in sales and revenue over the next two years, its profit structure may reach a marginal point, impacting its future valuation [6].

Core Insights - The collaboration between SAIC Motor and Huawei has led to the launch of the new model, Shangjie H5, which initially saw over 80,000 pre-orders but faced disappointing sales after its official launch, with only 10,000 orders in the first hour [2][3]. - The automotive industry is witnessing a trend where multiple car manufacturers are partnering with Huawei, which has established collaborations with over 30 domestic and international car companies [5][6]. - Different levels of collaboration exist between Huawei and car manufacturers, categorized into three models: component supply, HUAWEI INSIDE (HI) model, and HarmonyOS Intelligent Driving model [7][9]. Group 1 - The initial success of Shangjie H5 was short-lived, with lower-than-expected orders raising questions about the effectiveness of Huawei's technology in the automotive sector [3][4]. - Major car manufacturers, including FAW Hongqi and others, are also partnering with Huawei, indicating a broader trend in the industry towards collaboration with tech companies [5][6]. - The varying degrees of collaboration with Huawei reflect the strategic choices of different car manufacturers, with some opting for deeper integration while others maintain more independence [7][12]. Group 2 - The HI model allows car manufacturers to retain control over design and manufacturing while receiving technical support from Huawei, exemplified by the recent partnership between FAW Hongqi and Huawei [9][10]. - The HarmonyOS Intelligent Driving model involves Huawei's deeper participation in product design and quality control, which some manufacturers, like Chery, are adopting to enhance their market competitiveness [10][12]. - The collaboration dynamics vary significantly among manufacturers, with some prioritizing brand independence while others leverage Huawei's technology to enhance their offerings [12][14]. Group 3 - SAIC Motor's CEO emphasized the need for collaboration in a networked automotive ecosystem, highlighting the shift from traditional sales models to an ecosystem-driven approach [29]. - The financial struggles of companies like BAIC and SAIC have prompted them to seek partnerships with Huawei to revitalize their brands and expand their market reach [24][25][28]. - The competitive landscape is intensifying, with companies like BYD and Geely rapidly increasing their market presence, putting pressure on traditional manufacturers to innovate and adapt [20][21]. Group 4 - The HarmonyOS Intelligent Driving model has led to the creation of several new brands, including the "Five Realms," which are positioned to compete in the growing electric vehicle market [11][15]. - The resource allocation among the "Five Realms" is uneven, with some brands, like Seres, receiving more support from Huawei, which affects their market performance [39][41]. - The future success of these collaborations will depend on how well each manufacturer can leverage Huawei's technology while maintaining their brand identity and market position [44][49].

Core Insights - Huawei is evolving its automotive strategy, transitioning from a technology provider to a more integrated role in vehicle sales and management, particularly through its "Hongmeng Zhixing" user centers [26][30][32] - The company has established a significant presence in the automotive market, with its technology integrated into over 1 million smart vehicles, showcasing its ambition to build a comprehensive automotive ecosystem without manufacturing cars itself [3][30] Group 1: User Center Development - The "Shangjie" user center in Shanghai is preparing for its opening, with a notable increase in customer interest, receiving over 30 groups of visitors in a single day prior to the launch of the Shangjie H5 model [1][4] - The user centers are designed to follow strict operational guidelines set by Huawei, including specific requirements for vehicle display and customer interaction to enhance the user experience [20][23] Group 2: Sales and Distribution Strategy - Huawei's sales strategy has evolved from a fragmented approach to a more unified model, consolidating control over sales, delivery, and service through the establishment of "Hongmeng Zhixing" user centers [10][12][21] - The company has shifted from a dual-channel system with separate responsibilities for sales and after-sales to a more integrated approach, allowing for better customer experience and operational efficiency [10][11][12] Group 3: Market Position and Partnerships - Huawei has expanded its partnerships with eight major state-owned automotive companies, positioning itself as a key player in the automotive industry, leveraging its technology and market insights [2][3][30] - The company is focusing on high-end market segments, utilizing its experience in consumer electronics to better understand and meet the needs of middle-class consumers in China [24][30] Group 4: Operational Control and Standardization - Huawei maintains strict control over the operations of its user centers, dictating sales policies, staff performance metrics, and operational standards to ensure a consistent customer experience across all locations [20][22] - The company emphasizes a standardized operational methodology, which includes detailed training for sales personnel and a focus on customer engagement through scenario-based marketing [22][25] Group 5: Future Directions - Huawei is positioning itself as a "super supplier" rather than a traditional car manufacturer, focusing on providing comprehensive solutions for smart vehicles, including intelligent driving and cockpit systems [30][32] - The company is exploring new collaborative models with automotive partners, indicating a potential shift towards a more flexible and competitive landscape in the automotive sector [30][31]