Key Takeaways:
Key Takeaways:
Seres Group swung to a 1.72 billion yuan ($253 million) net loss in the first half, reversing a 2.94 billion yuan profit a year earlier.
The company attributed the swing to product transitions, rising battery and chip prices, and asset impairments, it said in its interim report. Revenue fell 7.87 percent to 57.49 billion yuan, while its net loss excluding non-recurring items was 2.38 billion yuan, compared with a 2.47 billion yuan profit in the same period last year.
Gross margin narrowed 4.7 percentage points to 21.8 percent as the average daily price of battery-grade lithium carbonate jumped 132.2 percent year-on-year and automotive-grade chips faced structural shortages. Seres booked a 1.75 billion yuan impairment on intangible assets and a 2.31 billion yuan loss on other items, up from a 33 million yuan loss a year earlier.
The loss underscores pressure across China's EV sector, where domestic passenger-vehicle retail sales fell 20.2 percent in the first half, according to China Passenger Car Association data cited by Seres. Only the segment priced above 400,000 yuan grew, with retail sales up 18.8 percent and NEV sales in that range surging 45.9 percent.
Seres sold 196,580 vehicles in the first half, down 1.02 percent year-on-year, while NEV sales rose 3.87 percent to 178,777 units. The company said its key models were undergoing product transitions in the second quarter, so scale benefits had yet to be fully realized while its product mix shifted.
Operating cash flow turned deeply negative at 12.38 billion yuan, versus a positive 14.64 billion yuan a year earlier, as vehicle-sale receipts fell and previously issued bank acceptance bills matured. Total assets declined 10.81 percent to 128.35 billion yuan, and net assets attributable to shareholders contracted 8.42 percent to 37.48 billion yuan.
Seres said its balance sheet remained resilient, with cash reserves above 73.15 billion yuan, or 57 percent of total assets, and interest-bearing debt at just 3.2 percent of assets. It paid more than 1.39 billion yuan in cash dividends during the period and completed 587 million yuan in share repurchases as of July, while directors and senior executives finished a 148 million yuan share-purchase plan within three trading days.
The swing to a loss signals near-term margin pressure for the Huawei partner as it navigates a model-cycle trough against rising component costs. Investors will watch second-half deliveries and the ramp of new models, including the Aito M6, for signs that scale benefits are returning.
This article is for informational purposes only and does not constitute investment advice.
