Seres goes public on the Hong Kong Stock Exchange: Valuation calibration and value breakthrough behind the first-day game
On November 5th, SERES officially listed on the main board of the Hong Kong Stock Exchange. This event not only marks the birth of the first luxury new energy vehicle enterprise in China to be listed on both the A-share and H-share markets. Moreover, as the "largest IPO of a complete vehicle manufacturer in the Hong Kong stock market since 2022 and the third-largest IPO in the Hong Kong stock market in 2025", it has become an important window for the capital market to observe the valuation logic and development potential of China's new energy vehicle industry.
On that day, SERES opened at HK$128.9 per share, slightly lower than the issue price of HK$131.5. During the session, it once hit a low of HK$118, a decline of more than 10%. Finally, with the support of the stabilizing agent CICC using the greenshoe option funds, it closed at the issue price. This "narrow escape" performance on the first day is not simply a signal of market bearishness, but a value game under the interweaving of multiple factors - there are not only valuation disputes caused by high discounts and real concerns about short-term performance pressure, but also the influence of the evolution of the cooperation halo with Huawei. At the same time, it also contains the differentiated judgments of institutional investors on the long-term competitiveness of new energy vehicle enterprises.
The Balance of Discount, Demand, and Valuation in the First-Day Game
The first controversial point of SERES' listing on the Hong Kong stock market started from the "high discount" during the prospectus stage. The final determined issue price of its Hong Kong shares was at a 22.7% discount to the A-share closing price on October 31st, exceeding the common range of similar large-scale A-to-H projects in 2025. Among the projects with an issuance scale of over HK$10 billion this year, except for Hengrui Medicine, which had a historical discount characteristic of the pharmaceutical industry reaching 25.6%, the discounts of other high-quality targets such as CATL were only 6.8%, and those of Haitian Flavoring & Food and Sany Heavy Industry were also controlled within 20%.
The market initially thought that the high discount might be SERES' "concession" strategy to attract Hong Kong stock investors, but the subsequent market reaction showed a deeper divergence in demand - the 15% adjustment right for the offering volume (corresponding to about 15.03 million shares) set for this issuance was finally only exercised by 56%, with less than 8.42 million additional shares issued. Even though the prospectus disclosed that the institutional subscription multiple reached 8.6 times, the unused adjustment right still implied that the institutions' recognition of the pricing did not meet expectations.
However, this weak demand is not the whole picture. During the prospectus stage, the public offering was oversubscribed by 133 times, and the margin subscription exceeded HK$170 billion. Moreover, 22 cornerstone investors such as Chongqing Industrial Mother Fund, Schroders, and GF Fund participated, indicating that the market has positive expectations for its long-term value. This contradiction has become an epitome of the valuation disputes of SERES.
The fluctuation of the stock price on the first day also magnified the divergence among institutional investors. According to the data disclosed by the Huasheng Securities APP, CICC, the stabilizing agent, became the only "main support party" on that day, with a net purchase volume of 2.2369 million shares, almost equal to the total sales volume of the top seven net-selling brokers; while foreign investment banks such as Morgan Stanley, UBS, and Goldman Sachs collectively appeared on the net-selling list.
Behind this differentiation is the different judgments of the two types of investors on the "valuation-performance matching degree": foreign institutions pay more attention to the long-term profitability and independence of the target. SERES' current predicted price-to-earnings ratio of 26.5 times in 2025 far exceeds the average level of traditional Hong Kong-listed complete vehicle manufacturers (13.6 times). Even compared with industry leader BYD (21.1 times) and Chery Automobile, which is also in the cooperation camp with Huawei (10.4 times), it is still on the high side.
The performance of a 1.7% year-on-year decline in the net profit attributable to the parent company in the third quarter of the 2025 third-quarter report has made some foreign investors doubt its ability to deliver on performance; on the contrary, cornerstone investors and the stabilizing agent value SERES' layout in the new energy track - with a revenue of 110.5 billion yuan and a net profit attributable to the parent company of 5.3 billion yuan in the first three quarters, coupled with the signal of a 56.8% month-on-month increase in the sales volume of the high-margin model M8 driving the gross profit margin up to 29.9%, they believe that the short-term valuation disputes cannot hide its long-term growth potential.
In fact, the valuation dispute of SERES is essentially a collision between the "dividend of new energy transformation" and the "inertia of traditional vehicle enterprises". As an enterprise that has transformed from a traditional vehicle manufacturer to the new energy track, SERES has achieved a leap in market value from the tens of billions level to the 250 billion level through its cooperation with Huawei. The cumulative delivery of the AITO series has exceeded 800,000 vehicles, and the M9 has long ranked first in the sales volume of the 500,000-yuan market. This transformation speed is rare in the industry.
However, the Hong Kong stock market is often more cautious in valuing "transforming enterprises". It will not only consider the achievements that have been delivered but also examine its continuous growth momentum - the targets of 178.2 billion yuan in annual revenue and 10 billion yuan in net profit in 2025 have only been 60% and 53% completed so far, and the cumulative automobile sales volume in the first ten months has declined by 4.3% year-on-year. These short-term pressures make it difficult for the valuation to fully approach that of pure new energy vehicle enterprises. This "unfinished transformation" state is the core logic of the market game on the first day.
The Dual Breakthrough of Huawei Cooperation and Independent Capability
The long-term value of SERES after its listing on the Hong Kong stock market is always inseparable from the keyword "cooperation with Huawei". From a historical perspective, the deep binding with Huawei is the core driving force for SERES to achieve leapfrog development: before the cooperation, its main business was traditional commercial vehicles, and the market attention was limited; after the cooperation, relying on Huawei's technical support in the fields of intelligent cockpits and autonomous driving, the AITO series quickly became a popular model in the high-end new energy market, and the brand premium increased significantly.
This "Huawei halo" has brought significant differentiated valuations to it in the A-share market, but it needs to rebuild confidence in the Hong Kong stock market: on the one hand, Huawei's automobile cooperation map continues to expand, and automakers such as Chery, BAIC, and Jianghuai have successively joined, diluting SERES' "exclusivity" within the Huawei system; on the other hand, there are many new energy targets with independent core technologies in the Hong Kong stock market, such as Li Auto, which achieved annual profitability as early as 2023. Compared with SERES, which turned profitable in 2024, it has more stable profitability, which has gradually transformed the "dependence on Huawei" from an advantage into a risk point that investors pay attention to.
Facing this cognitive difference, SERES is building new competitiveness through "strengthening independent capabilities" and "diversifying business". At the R & D end, about 70% of the net proceeds of HK$14.016 billion from this Hong Kong stock IPO will be invested in R & D, focusing on core fields such as intelligent electric technology, battery safety, and autonomous driving algorithms, trying to reduce its single dependence on Huawei's technology; at the same time, SERES' subsidiary Chongqing Phoenix Technology signed a "Framework Agreement for Embodied Intelligence Business Cooperation" with ByteDance's Volcengine to explore the integration of intelligent technology and automobile scenarios, opening up a new track for business growth.
At the product end, although the sales volume of the M9 declined month-on-month in the third quarter, the sales volume of the M8 model increased by 56.8% month-on-month. The modified M7, which started delivery on September 26th, exceeded 20,000 vehicles in 36 days, showing the resilience of the product matrix; in the future, with the continuous launch of new models and the iterative optimization of existing models, the product structure is expected to further tilt towards the high-margin range, providing support for profit growth. In terms of internationalization, SERES' market has covered many countries and regions in Europe, the Middle East, the Americas, and Africa. This listing on the Hong Kong stock market will accelerate its global layout, especially the investment in the construction of overseas charging networks and the expansion of local marketing channels (about 20% of the proceeds will be used for this), which is expected to open up long-term growth space.
The "narrow support" on the first day of SERES' listing on the Hong Kong stock market is not the end of its value, but an important calibration of the capital market's valuation logic for "transforming enterprises" among Chinese new energy vehicle enterprises. In the short term, the company faces the pressure of sprinting for performance (it needs to complete 40% of the annual revenue target in the fourth quarter), the gap between its valuation and its peers, and the dilution of the cooperation halo with Huawei. The stock price may still fluctuate; but in the long term, its actions in the product matrix, R & D investment, and international layout have shown actions to get rid of the "single cooperation dependence" and build independent competitiveness.
For SERES, the more mature investor structure and the valuation logic that pays more attention to fundamentals in the Hong Kong stock market will force the company to continuously improve in performance delivery, technological independence, and risk control; and the international platform of the Hong Kong stock market also provides convenience for it to introduce global capital and expand overseas markets. From an industry perspective, SERES' listing on the Hong Kong stock market also reflects the valuation differentiation of China's new energy vehicle industry - as the market enters the stage of "intensive cultivation" from "wild growth", the valuation logic that simply relies on concepts or single cooperation is becoming ineffective. Enterprises with core technologies, stable profitability, and sustainable development capabilities will receive more capital favor.
Picture source: SERES Group
This article is from the WeChat public account "Automobile Market Insights", author: Yang Shuo. Republished by 36Kr with permission.