Seres disclosed its H1 2026 earnings guidance, projecting a net loss of RMB 1.5-1.8 billion, swinging from profit a year ago. Rising raw material costs and asset impairment weighed on margins, yet AITO brand deliveries grew 10.2% year-on-year.
Earnings Overview: From Profit to Loss on Cost Headwinds
On July 12, Seres (601127.SH) released its H1 2026 earnings guidance, projecting a net loss attributable to shareholders of RMB 1.8 billion to RMB 1.5 billion, compared to a net profit of RMB 2.941 billion in H1 2025. Core subsidiary AITO Automotive is expected to post a net loss of RMB 1.05 billion to RMB 1.3 billion.
The profit swing stems from three converging pressures:
- Surging raw material costs: Prices of memory chips, industrial metals, and lithium carbonate have risen sharply, with battery-grade lithium carbonate up over 100% year-on-year and automotive-grade memory chips up as much as 180%
- Asset impairment adjustments: The company wrote down the book value of legacy assets with limited applicability due to technology iteration and model upgrades
- Intensifying market competition: The first half of 2026 saw escalating price wars and marketing spending across China's auto market
Seres emphasized in its filing that it maintains ample cash reserves and a sound debt structure, ensuring sustainable operations and risk resilience.
Operational Bright Spot: AITO Deliveries Defy Downturn
Despite financial pressure, Seres delivered positive signals on the operational front. In January-June 2026, Seres NEV cumulative sales reached 178,777 units, up 3.87% year-on-year. The AITO brand's cumulative deliveries rose 10.2% year-on-year, demonstrating resilience amid a challenging market environment.
| Metric | H1 2026 | YoY Change |
|---|---|---|
| Seres NEV Sales | 178,777 units | +3.87% |
| AITO Deliveries | +10.2% YoY | Counter-trend growth |
| New AITO M9 Deliveries | 10,000+ units in 3 weeks | Strong premium demand |
| AITO M6 Deliveries | 30,000+ units in 54 days | Mid-range volume surge |
AITO's premium product strategy yielded notable results in H1:
- The all-new AITO M9 surpassed 10,000 units in deliveries within just three weeks of launch, maintaining leadership in the RMB 500,000+ luxury SUV segment
- The AITO M6 accumulated over 30,000 deliveries within 54 days of launch, showing strong market momentum
- The AITO M9 Ultimate extended-wheelbase variant is set to begin deliveries soon, further elevating brand positioning
- The AITO M8 facelift is progressing steadily, with an enriched product pipeline for H2
Analyst View: New Product Cycle to Drive Margin Recovery
Multiple brokerage reports characterize Seres' current losses as a cyclical cost fluctuation combined with proactive asset cleanup, rather than a demand collapse. With new model iterations and rapid scaling of premium vehicles, the company is entering a new product super-cycle.
Key supporting arguments include:
- AITO surpassed 1 million units off the production line in just 46 months, one of the fastest growth trajectories in the industry
- The share of high-end models (M9, M9 Ultimate) continues to rise, lifting average selling prices
- Huawei's ADS 4.1 intelligent driving system keeps evolving, strengthening product differentiation
- The H2 lineup, including the AITO M8 facelift and additional new models, is expected to drive both volume and gross margin recovery
It is worth noting that Seres' Q1 2026 results already signaled margin pressure: revenue reached RMB 25.75 billion, up 34.5% YoY, but non-recurring net profit plunged 73.87%. The H1 guidance further confirms that cost-side pressures are still being absorbed. Analysts broadly expect that as lithium carbonate prices stabilize and premium models achieve scale effects, the company's performance could inflect positively in H2.
