Seres goes public on the Hong Kong IPO with a valuation of 215 billion, and its stock price plunges 8% at the opening.
This year's largest domestic automotive IPO has officially landed in Hong Kong.
Seres, the second - largest Chinese automaker by market value, has just rung the bell at the Hong Kong Stock Exchange. The opening price per share was approximately HK$120.5, a drop of about 8.4% compared to the final issue price.
The opening market value was about HK$215 billion, lower than its current A - share market value of RMB 250 billion (approximately HK$273.3 billion).
Before the bell - ringing, Seres had already secured subscriptions from 22 cornerstone investors and participation from over 300 institutional investors.
Seres Rings the Bell with a Valuation of HK$215 Billion in Hong Kong Stocks
Seres, which already has a market value of over RMB 100 billion in the A - share market, set its final issue price at HK$131.50 per share, consistent with the planned maximum issue price.
Meanwhile, the adjustment right for the offering volume of Seres has been partially exercised. During the public offering stage, Seres received 132.68 times the subscriptions, and a total of 109 million H - shares were issued globally.
As soon as the market opened today, the stock price settled at around HK$120.5, a drop of about 8.4% compared to the issue price, and the market value reached approximately HK$215 billion, lower than the current A - share market value of about RMB 250 billion (approximately HK$273.3 billion).
Before the bell - ringing, Seres had received subscriptions from 22 cornerstone investors, including Chongqing Industrial Mother Fund, Linyuan Fund, GF Fund, Schroder, China Post Wealth Management, Xingyu Hong Kong, etc.
In addition, over 300 institutions participated in the investment, including sovereign wealth funds and global long - only funds. The total funds raised were HK$14.283 billion, making it the largest automotive IPO in China this year.
Looking at the equity structure, as of September 30 this year, among Seres' top ten shareholders, two held more than 20% of the shares:
Chongqing Xiaokang Holdings is Seres' largest shareholder, holding 24.52% of the shares, and the second - largest shareholder, Dongfeng Motor Corporation, holds 20.04%.
Moreover, Seres' significant external investment - taking a stake in Huawei Yinwang (Huawei's automotive BU) - also completed the final transaction not long ago. A total of RMB 11.5 billion has been paid, and it now officially holds a 10% stake in Yinwang.
Seres' Financial Performance
Based on Seres' prospectus and the latest Q3 A - share financial report:
From 2022 to 2024, Seres' automobile sales were 267,200, 252,300, and 497,000 vehicles respectively. In 2024, the sales of new energy vehicles reached 426,900, a 182.84% increase compared to 2023.
In the first three quarters of this year, Seres sold 340,700 vehicles, of which 304,600 were new energy vehicles, with a penetration rate of over 89%.
As the sales of AITO soared, its proportion in Seres' total sales gradually increased from 29.1% in 2022 to 76.5% in the first half of this year.
In terms of revenue, in 2022 and 2023, Seres achieved revenues of RMB 34.056 billion and RMB 35.789 billion respectively. In 2024, it skyrocketed to RMB 145.113 billion, breaking through the RMB 100 - billion mark for the first time, and a year - on - year surge of 305.5%.
In the first three quarters of this year, Seres' revenue was RMB 110.53 billion, a 3.7% year - on - year increase. Among them, the revenue in the third quarter was RMB 48.13 billion, a 15.8% year - on - year increase and an 11.3% quarter - on - quarter increase.
In 2022 and 2023, the sales revenues of AITO vehicles were RMB 20.5 billion and RMB 24.3 billion respectively, contributing 60.3% and 67.9% to the company's total revenue respectively.
In 2024, with the explosive growth of AITO sales, this proportion suddenly increased to 90.9%, and it still maintained a high proportion of 90.3% in the first half of this year, becoming the main pillar of Seres' growth.
From 2022 to 2024, and in the first three quarters of this year, the company's gross profit was RMB 2.728 billion, RMB 2.571 billion, RMB 34.551 billion, and RMB 32.47 billion respectively.
The corresponding gross profit margins for each stage were 8%, 7.2%, 23.8%, and 29.4% respectively.
The significant turning point was in 2024, when the gross profit margin jumped from single - digits to over 20%, and it is currently the highest among new - energy vehicle startups.
Over the past three years, the company's annual profits were - RMB 5.22 billion, - RMB 4.157 billion, and RMB 4.74 billion respectively. As of the end of September this year, the annual profit was RMB 5.31 billion, a 31.6% year - on - year increase.
In the prospectus, Seres clearly stated that the company's remarkable growth and profitability are mainly attributed to the success of AITO vehicles.
Ultimately, the cooperation with Huawei is an important driving factor for the success of AITO vehicles.
With Huawei's Boost, the Stock Price Soars Over 11 - fold
In the automotive industry, "Seres" has almost become a synonym for successful transformation. It has evolved from Xiaokang to Seres, listed on the A - share market in 2016, and after many ups and downs, it has become the second - largest Chinese automaker by market value.
Looking back on Seres' journey, we can start with the founder's entrepreneurial journey:
In 1986, 23 - year - old Zhang Xinghai from Chongqing started with springs and shock absorbers, investing in and establishing Ba County Phoenix Electric Spring Factory. Subsequently, the business gradually expanded to the motorcycle business, and he established Yu'an Group. This was his first entrepreneurial venture.
In 2003, with the rise of self - owned brand automobiles, Zhang Xinghai seized this opportunity and jointly established "Dongfeng Yu'an" with Dongfeng Motor, producing micro - vehicles under the Dongfeng Xiaokang brand. This was the predecessor of Xiaokang.
Three years later, Chongqing Xiaokang was officially established, marking Zhang Xinghai's second entrepreneurial venture.
In 2016, Xiaokang Co., Ltd. successfully listed on the A - share market. However, the profit margins in the micro - vehicle market were thin, and the company's stock price often hovered around RMB 10 per share.
Therefore, also in 2016, the company decided to fully transform into the new - energy vehicle field. At the age of 53, Zhang Xinghai embarked on his third entrepreneurial venture.
Initially, the transformation did not go smoothly. It wasn't until 2021 that the company reached a turning point - Xiaokang Co., Ltd. reached a cooperation agreement with Huawei.
The first model they launched together, the Seres SF5, did not make a splash in the market. Therefore, the two sides decided to further deepen their cooperation and enter the market with new models, new technologies, and a new brand. The AITO brand was born.
The first model, the AITO M5, set a new record for the fastest - selling new - energy vehicle to reach 10,000 units.
In 2022, the company officially changed its name from "Chongqing Xiaokang Industrial Group Co., Ltd." to the current "Seres Group Co., Ltd."
However, despite showing signs of improvement, the sales of the two models did not skyrocket as expected.
For the AITO M5, after reaching monthly sales of over 10,000 units for the first time in August 2022, the sales remained mediocre. The sales of the AITO M7 after its launch were also not outstanding.
It wasn't until the release of the new AITO M7 in September 2023 that the sales of the M7 rebounded. The sales exceeded 10,000 units in the second month after its launch and approached 30,000 units in January 2024.
In 2024, Seres took off. The AITO M9 became a huge hit and the best - selling model of AITO.
It can be said that the partnership with Huawei has brought about a revolutionary change for Seres. Relying on Huawei's full - stack technology, AITO has strong competitive strength. This has also made the connection between the two sides even closer. Seres also invested HK$11.5 billion to take a stake in Huawei's subsidiary, Yinwang.
Along the way, the market's voice has changed from early doubts to later praise, and now to the situation of "hard to get an AITO". The name "Seres" has long become a symbol of this new cooperation model.
Initially, Seres (then Xiaokang Co., Ltd.) was struggling on the verge of crisis. After deeply binding with Huawei, it emerged from the darkest moment. In five years, its market value soared from around RMB 20 billion to over RMB 250 billion in the A - share market today, almost more than an 11 - fold increase.
As the first automaker to "take the plunge", Seres was the first to approach Huawei. Through years of adjustment and trial - and - error, after the "SF5" stage and the "M5" stage, they have achieved the great success of the AITO brand today.
However, victory is not always permanent.
