Behind SERES' listing on the Hong Kong Stock Exchange, there lies a 70% "unnamed" budget.

Introduction: As a growing manufacturing enterprise, Seres has established a stable rhythm, and it's highly unlikely to suddenly require a huge R & D budget within a year.

With a HK$14 billion financing, 70% of which is earmarked for R & D, what exactly does this "unnamed" budget mean for Seres?

Seres' prospectus for its Hong Kong IPO resembles a well - packaged capital story. When the growth of its automotive business slows, when its dependence on Huawei deepens, when the capital market craves new narratives, and when both capital and policies are spurring the story of the "next intelligent vehicle industry," will a growing manufacturer choose to expand into new frontiers?

Before the answer to this question emerges, certain noteworthy signals have appeared in the Chinese market: Seres has indeed started to explore the low - altitude economy, although the specific direction of its layout remains unclear.

Seres' R & D Ambition: The "Unnamed" Budget

The high - proportion R & D budget disclosed in Seres' Hong Kong IPO prospectus has surprised the outside world.

In the past three years, Seres' R & D expenditure has been on the rise, but nowhere near the scale of expansion indicated by this financing.

The current R & D landscape in the intelligent vehicle industry has become relatively clear: computing power platforms, electric drive systems, platform - based vehicle frames, intelligent driving, and operating systems. As a growing manufacturing enterprise, Seres has a stable rhythm in these areas. It's difficult to imagine a situation where it suddenly needs a huge R & D budget within a year.

Image source: Seres' prospectus

According to the prospectus, Seres raised a net of HK$14.016 billion through this IPO, with 70% to be invested in R & D.

This substantial R & D investment provides Seres with sufficient funds to enter new fields. However, the broad description of "frontier technology exploration" leaves room for various interpretations.

Is it quietly laying out in the low - altitude sector without public disclosure? Is it using the concept of the low - altitude economy to boost its valuation and attract investors? Or is it using R & D as an excuse to reserve funds for other purposes?

Based on comprehensive judgment, the more common speculation in the industry is that Seres is building a new technology layout that "extends beyond the boundaries of vehicle manufacturing capabilities."

This layout is large - scale, long - term, and has a direct extension of its manufacturing capabilities. The low - altitude economy precisely meets these three characteristics.

On one hand, China officially entered the acceleration phase of low - altitude economy policies after 2024. More than 30 provinces and municipalities have included the low - altitude economy in their key work, and local governments are actively seeking leading enterprises with industrial driving capabilities.

On the other hand, Seres' manufacturing system has the ability to achieve high - consistency, high - quality large - scale production. It can become a major player similar to an original equipment manufacturer (OEM) in the next - stage competition of the eVTOL industry, rather than a typical "aviation startup."

From the perspective of the capital market, the overlap between Seres' R & D expansion and the policy window of the low - altitude economy provides a reasonable starting point for outside speculation. Although the company has not publicly stated its R & D direction, many insiders in the industry generally believe that if there is a direction that can leverage Seres' manufacturing capabilities, supply - chain system, and brand influence, the low - altitude economy is undoubtedly the most strategically profound one.

Is Seres' Engagement with the Low - Altitude Economy Effective?

Engagement with XPeng HT

According to multiple reports, Seres has indeed started to engage with low - altitude economy enterprises, and the most explicit one is the cooperation negotiation with XPeng HT.

In September 2024, Zhao Deli, the founder of XPeng HT, clearly stated in a media interview that XPeng HT had preliminary discussions with Seres Group regarding aviation range extenders, mainly aiming to solve the problem of short flight range of aircraft. Zhao Deli said, "Seres is one of the suppliers we're interested in. XPeng HT is in contact with all domestic suppliers of range extenders."

XPeng HT hopes to develop aviation - suitable range extenders through cooperation with Seres. Since foreign products are expensive, it aims to reduce costs by cultivating the domestic supply chain and make flying cars more accessible.

The hype was high, but the actual results were limited. This contact did not directly lead to a cooperation. What was just a simple supplier evaluation was packaged as a strategic cooperation. Subsequently, XPeng HT ultimately chose another supplier, Dongan Power.

Cooperation with China Aerospace Electronics Technology Research Institute

In February 2025, media reported that Seres Group signed a strategic cooperation agreement with China Aerospace Electronics Technology Research Institute. The two parties will jointly promote the application of scientific and technological projects in new product development and promotion, as well as the transformation of scientific and technological innovation achievements and industrial upgrading.

However, for Seres, transitioning from automotive range extenders to aviation range extenders and the entire low - altitude economy still faces huge technological leaps, strict airworthiness certification barriers, and heavy resource allocation pressure.

Specifically, aviation range extenders have much higher requirements for power density, lightweight design, reliability, and safety in extreme environments such as high - temperature and low - pressure conditions compared to automotive standards. Moreover, the strict airworthiness certification process in the aviation field is lengthy, involving a large number of ground and flight tests and meeting strict regulations including those for transport aircraft.

Notably, Seres has registered a series of aviation - related trademarks such as "Saifei," "Fenghang," and "Saihang" in the category of transportation equipment. This is interpreted by the outside world as Seres' early layout for new projects in the low - altitude economy.

To launch forward - looking projects like the low - altitude economy, Seres cannot let its existing main business lag behind. It also faces severe tests in terms of technology reserves, capital planning, and talent allocation. At the beginning of this year, there were reports that Seres was recruiting senior flight control system engineers, with job responsibilities including flight control algorithm design.

Support from the Chongqing Local Government

According to a news release on the Chongqing Municipal People's Government website on December 26, 2024, local Chongqing enterprises Seres and Zongshen have formed a project team to participate in the R & D and manufacturing of intelligent aircraft such as eVTOL and their core components. This indicates that Seres' low - altitude economy layout has received recognition and support from the local government, but no further details have been updated.

Overall, Seres' R & D projects in the low - altitude economy feature a diversified layout, including future - oriented manned aircraft (eVTOL) and logistics technologies with more immediate application potential (vehicle - drone collaboration). At the same time, it is actively laying the foundation for long - term development through cooperation and independent R & D.

These initiatives together outline Seres' strategic intention to create a "second growth curve."

The Low - Altitude Economy Window Period: Will Seres Enter the Market Now?

The core contradiction in China's low - altitude economy is shifting from "can we build it?" to "can we scale it up?"

Whether it's EHang, Volantor, or XPeng HT, they have been solving fundamental "aviation issues" such as airworthiness, test flights, and verification system construction in the past few years. However, large - scale manufacturing of complete aircraft is still in its infancy.

Seres' entry may change this situation. Its supply - chain integration capabilities, stability of complex manufacturing systems, experience in large - scale manufacturing, and maturity of intelligent systems give it inherent advantages in the next - stage competition of eVTOL, a new type of aviation product.

From a policy perspective, the state has clearly identified the low - altitude economy as a strategic emerging industry. The "low - altitude operation demonstration cities," "drone industrial clusters," and "special funds for low - altitude economy development" promoted by various provinces and municipalities are creating a "window - period cycle" similar to the new - energy vehicle subsidy period from 2015 to 2020.

This means that if Seres chooses to officially enter the market around 2026, the timing will coincide with the critical node when the industry transitions from the "experimental" to the "near - large - scale commercial" stage.

According to the prospectus, Seres plans to set up 100 experience centers in Europe, the Middle East, etc. before 2026 and jointly build a super - charging network with Huawei, aiming to cover 80% of highways in major international markets. This global layout provides room for imagination for the international development of the low - altitude economy.

While the vision is promising, Seres' automotive business has not fully achieved global success, and internationalizing the low - altitude economy will be even more difficult. It lacks local operation experience and teams. Moreover, with continuous orders from the Middle East going to Chinese enterprises, the risk of "sweet - but - empty orders" must be vigilant.

If Seres successfully enters the low - altitude economy market, it will not be a risky attempt to "start from scratch in aviation" but an industrial leap to "fill the gaps in aviation manufacturing with its mature automotive manufacturing capabilities."

Globally, Which Companies Have Blazed the Trail That Seres May Follow?

When we view Seres' potential path from a broader industrial perspective, we find that several leading global eVTOL enterprises provide reference points.

Joby's development trajectory shows that eVTOL can only be truly implemented in urban commercial operations when it has strong flight control, strong safety systems, and a self - built operation system.

Archer's strategy demonstrates the value of "complete aircraft manufacturing + deep industrial cooperation with large aviation groups." By sharing the supply chain and testing resources, it ensures the stability of the quality system before large - scale production.

Volocopter's approach emphasizes "starting from cities, then expanding to city clusters" and entering the government procurement system through regional operation capabilities.

Domestically, XPeng HT is a typical example of an "automobile enterprise incubating an aviation enterprise," while EHang leans more towards the "unmanned + urban air traffic standardization" route.

Comparing these models, Seres is most likely to take a "middle - ground approach between Joby and XPeng HT": maintaining autonomy in complete aircraft R & D and manufacturing while leveraging its existing intelligent experience and supply - chain system to build a highly consistent, high - quality, and rapidly replicable product system.

More importantly, these reference companies jointly show a trend: the competition in eVTOL is no longer just a technological race but a comprehensive test of manufacturing capabilities, supply - chain organization, software - hardware integration, and urban - level operation systems.

These are precisely the most prominent capabilities that Seres has developed in the past five years.

If Seres Enters the Market, Will It Focus on Complete Aircraft or Services?

The traditional division of labor in the aviation manufacturing industry no longer applies to eVTOL. Players in this new field often need to cover a more complete value chain, from complete aircraft R & D, power systems, flight control software to urban operation platforms.

Based on Seres' organizational capabilities, it is most likely to build a model of "complete aircraft manufacturing as the mainstay, with a service system running through the entire process." This is not simply "selling airplanes" but a composite model similar to the "OEM + user touchpoints + service forms" in the intelligent vehicle industry.

The company has established core technology moats such as the Seres Magic Cube technology platform, Seres Super Range Extender, and Seres Intelligent Safety. These technology platforms have modular features and can theoretically be transferred to the aviation field.

A more forward - looking vision is that if Seres truly manufactures its own eVTOL, it may not be limited to "selling to B - end operators" or "selling to the government."

Instead, it is more likely to take on the role of a comprehensive service provider that "provides operation vehicles + provides digital platforms + provides maintenance systems." Similarly, XPeng HT is also exploring this path.

From this perspective, if Seres' low - altitude layout materializes, it will not only be an expansion of its product line but an upgrade of the entire corporate business model.

Looking Up to the Sky: Resetting the Relationship between Seres and Huawei

The cooperation between Seres and Huawei was previously summarized as a "vehicle - building partnership." However, as the low - altitude economy becomes a new technological high - ground, the boundary of their capabilities is being redefined.

Huawei has been continuously investing in R & D in areas such as V2X, urban intelligent agents, and the Hongmeng air - ground collaboration system in recent years. If these technologies are extended to the low - altitude field, they will form important infrastructure for future urban air - ground transportation. If Seres enters the low - altitude manufacturing field, the most likely form of cooperation is not to be "empowered" by Huawei or to become a "pure OEM for Huawei" but a "joint leap in capabilities between a new - generation OEM and a platform giant."

Notably, Seres also warned of the risk of high dependence on Huawei in its prospectus.

Image source: Seres' prospectus

In 2024, the revenue of the Wenjie brand accounted for 90.9% of the company's total revenue. "If there is any significant disruption in the business relationship between the company and Huawei, the company's business, financial condition, and operating performance may be significantly and adversely affected." This risk warning also indirectly shows that Seres needs to find new growth points and business areas.

In other words, their relationship will not repeat the pattern of the intelligent vehicle era. Instead, there will be a new division of labor: Huawei will be more like the "brain of urban air - ground transportation," and Seres will be more like the "muscle of the execution system."

If this path is opened, the organizational mode of China's low - altitude industry will change fundamentally, and the resulting industrial organization form may be the prototype of China's low - altitude economy in the next 5 - 10 years.

The platform layer will be led by Huawei, responsible for air - traffic control coordination, urban - level scheduling, flight network planning, etc.; the complete aircraft layer will consist of enterprises with large - scale manufacturing capabilities such as Seres; the operation layer will be undertaken by local state - owned enterprises or large - scale platform companies, starting from urban demonstration operations and then expanding regionally and across cities.

The advantage of this structure is that the supply chain, manufacturing, software, and air - space coordination are all replicable, paving the way for large - scale implementation across the country.

If this model is established, it will stand in sharp contrast to the current "startup - led eVTOL model" and may become the dominant force in China's low - altitude economy after 2026.

The Boundary of an Industry Will Change with a Company's Vision

Whether Seres will officially enter the low - altitude economy in 2026 is still an unknown variable in the industry, but it has indeed cast a shadow on a potential path.

Investing over HK$9 billion in R & D is a high - risk gamble for Seres.

The low - altitude economy is a high - risk and highly uncertain field, and it's difficult to make a profit in the short term. A failure will have a significant impact on the company's financial condition. The huge R & D investment will