Seres kliver ut ur Huaweis skugga med Hongkong-IPO

For years, Seres Group Co. leaned on Chinese technology champion Huawei Technologies Co. to transform an assembler of cheap minivans into the maker of the country’s top-selling luxury vehicle. Now, it’s ready to come into its own.

The company, which recently completed one of the world’s biggest listings this year, had its Hong Kong trading debut on Wednesday. The stock ended up flat amid a down day for stocks globally, giving the company a market value of about $35 billion.

By going public in the financial hub, the Chinese carmaker made itself known to a wider and more international pool of investors than just being listed in Shanghai. Proceeds from the $1.8 billion listing will give Seres funds to expand overseas and chase the likes of Tesla Inc. in budding industries such as humanoid robots.

“We’re going to go global,” President John Zhang said in an interview with Bloomberg TV in Chongqing, where the company is based. “It’s going to be much easier for our customers and investors to understand what Seres is.”

The debut raises the visibility of a company known for teaming up with Huawei to develop Aito vehicles, with the technology giant providing key software and Seres assembling the cars. That’s culminated in the M9 SUV, which vaulted past models from established brands such as BMW and Mercedes-Benz to become China’s best-selling luxury vehicle.

“Seres has achieved success through its Aito brand in partnership with Huawei,” said Eugene Hsiao, head of China equity strategy at Macquarie Capital Ltd., adding that the stock will appeal to investors seeking a “premium auto proxy.” “The biggest risk is mostly around broader policy attitudes toward the auto sector.”

The mainland-listed shares have risen 9.5% this year, underperforming the local Shanghai index, but its surge of more than 1,300% in the past five years trounces the gains of all global automakers tracked by Bloomberg Intelligence. 

Seres joined battery giant Contemporary Amperex Technology Co. Ltd. and Chery Automobile Co. in capitalizing on Hong Kong’s hot market for new listings, which is headed for its best year since 2021 amid buoyant stock prices.

The offering came in spite of headwinds ranging from tariffs to persistent economic weakness and a long-running domestic price war that’s hammered industry profits and sent smaller players to the brink. Even Chinese EV juggernaut BYD Co. hasn’t been spared, reporting consecutive quarterly profit drops for the first time in years.

With overcapacity being exacerbated by the sluggish economy and weakened consumption, Chinese regulators have ramped up their oversight of China’s sprawling EV sector. That’s included a push to end aggressive discounting — which has had limited effect — and phase out flush door handles.

As for Seres, profit in the latest quarter fell for the first time in two years, while sales have stayed largely flat in the first 10 months of this year. But Seres is probably the most successful player in Chinese luxury market, and its position as a premium brand helped it “stay above the fray,” according to Daniel Kollar, head of Automobile and Mobility Practice at consultancy Intralink.

Zhang, the Seres president, credits the company’s ability to to understand consumers’ evolving tastes for luxury, which involves cramming in a lot of the latest technology.

Its flagship M9 comes with triple-screen dashboard, a 32-inch projector that can be unfurled in the back seat for viewing movies, a refrigerator, and the latest driver assistance technology from Huawei. In one of its most viral features, one can open the front door through a hand gesture that resembles what a superhero with telepathic powers would do.

“People want intelligent luxury, not the traditional,” he said. “They want to have iced coke whenever they want, they want a big TV screen.”

One way Chinese automakers have been coping with a sluggish domestic market has been looking overseas, with Seres being no exception.

“We’ll start with neighbors,” Zhang said. “We’re not going to expand to every country overnight. We’ll go on a one-on-one basis to make sure that every country we go to, we deliver exactly the same functions, the same services to customers.”

While Huawei has been key to Seres’ success, the Chinese technology giant has been forging partnerships in recent years with other automakers such as Chery and Chongqing Changan Automobile Co.

Zhang shrugged off concerns about the added competition other Huawei-equipped car brands might bring, saying that similar fears about Tesla’s foray into China proved to be unfounded, as it actually ended up helping the industry come up with better products.

Beyond cars, Seres is now also branching out into its next big bet, teaming up with Tiktok parent ByteDance Co. to develop humanoid robots, much in the way that Tesla is doing with its Optimus robot.

As Zhang puts it, just like having household staff is a luxury today, “in the future, when intelligence redefines this luxury, it’s going to be a robot.”

--With assistance from Adrian Wong, Charlotte Yang and Sabrina Mao.

(Updates share price in second and seventh paragraphs.)

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