Seres Group has issued a profit warning for H1 2026, projecting a net loss between RMB 1.5 billion and RMB 1.8 billion ($220 million to $270 million), reversing from a RMB 2.94 billion ($430 million) profit in the same period last year.
- Seres expects H1 2026 net loss of $220M–$270M
- Rising raw material prices increase production costs
- Aito subsidiary swings from profit to loss
What happened
Seres Group announced a profit warning for the first half of 2026, anticipating a net loss attributable to shareholders between RMB 1.5 billion and RMB 1.8 billion, equivalent to $220 million to $270 million. This marks a sharp reversal from a net profit of RMB 2.941 billion ($430 million) recorded in the corresponding period of 2025. The forecast is preliminary and has not yet been audited by external accountants.
The company attributes this projected earnings decline primarily to elevated production expenses. Prices for critical inputs such as memory chips, industrial metals, and lithium carbonate have surged, impacting overall manufacturing costs. Moreover, Seres took a prudent step to adjust the carrying value of certain assets that have become less viable due to ongoing technology improvements and shifts in product models.
Why it matters
This anticipated loss signals considerable financial pressure on Seres Group, reflecting broader challenges in semiconductor and raw material supply chains impacting the electric vehicle industry in China. The shift from profit to loss could affect investor confidence and Seres’ strategic positioning amid intensifying competition in the Chinese EV sector.
The underperformance of its core subsidiary, Aito, is particularly notable as it has been a key revenue contributor for Seres. Aito’s move into losses poses risks to the consolidated group’s financial health and highlights the difficulty of balancing innovation with cost containment during technological transitions.
What to watch next
Investors and analysts will closely monitor Seres’ official interim financial report for H1 2026 when it is released, to confirm the preliminary forecast and gain deeper insights into cost structures and asset impairments. The company’s plans to manage raw material cost pressures and accelerate technology integration will be key factors to watch.
Additionally, the performance of Aito in the coming quarters will be critical for Seres’ recovery prospects. Any strategic adjustments aimed at stabilizing Aito’s profitability or expanding revenue streams could influence market expectations and the wider Chinese electric vehicle landscape.