Huawei's Main EV Partner Seres Launches HK$13.2 Billion IPO Test
Seres Group, the primary manufacturing partner for Huawei's popular AITO electric vehicle brand, has launched a Hong Kong initial public offering to raise up to HK$ 13.18billion (US$ 1.69 billion), a move that will test international investor appetite for its partnership-driven model even as it capitalizes on a period of explosive growth.
The automaker, which recently turned profitable after its revenue tripled on the back of surging AITO sales, aims to use the bulk of the proceeds to bolster its in-house research and development. The listing, if successful, would make Seres Group the second Chinese new energy vehicle (NEV) maker after BYD to secure a dual listing in both mainland China and Hong Kong.
The IPO comes at a critical juncture. While riding high on the success of its Huawei collaboration, Seres is grappling with high leverage and constrained liquidity, creating an urgent need for fresh capital. For investors, the listing serves as a crucial valuation test for the "Huawei-powered" automaker model, pitting the benefits of a powerful tech partner against the perceived risks of over-dependence.
Seres is offering its Hong Kong shares at a maximum price of HK$131.5 each, a roughly 24% discount to its A-share closing price on Oct. 28. The deal has already attracted 22 cornerstone investors, including the Chongqing Industry Fund of Funds, GF Fund Management, and international asset manager Schroders, signaling broad interest from government, institutional, and foreign capital.
Funding an R&D Pivot Amid Financial Pressures
According to its prospectus, Seres plans to allocate approximately 70% of the net proceeds toward core NEV technology research, with 20% earmarked for global sales network expansion and the remainder for working capital. This capital deployment underscores a strategic push to build long-term growth drivers beyond its current reliance on Huawei.
The R&D investment will focus on three key areas: upgrading its proprietary "Mofang" vehicle platform for better compatibility and efficiency; advancing its smart-driving algorithms and HarmonyOS-integrated cockpit systems; and developing next-generation electric drive and range-extender systems slated for new models from 2025. The company stated in its prospectus that a Hong Kong listing would create a more open valuation framework to support its global strategy and reduce its dependence on domestic credit and A-share financing.
This strategic pivot is set against a backdrop of financial pressure. As of the end of June 2025, Seres’s total assets were approximately RMB 217.65 billion yuan (US$ 29.8billion) against total liabilities of RMB 164.82 billion yuan, resulting in a debt−to−asset ratio of 26.25 billion in pledged bank deposits and HK$11.44 billion in time deposits.
"While Seres's cash on hand appears ample, a high proportion is structured or restricted, limiting its actual usable liquidity," a securities industry analyst said. "Combined with a high debt ratio and cash consumption from rapid expansion, the company indeed needs to supplement its capital through a Hong Kong listing."
The Challenge of a Triple Dependency
While the AITO brand's success has fueled Seres's turnaround, the company's prospectus also highlights its growth foundation rests on a triple dependency—on Huawei's brand, its own highly leveraged financial structure, and external technology platforms—which investors will weigh as key risks.
The first and most significant is its reliance on Huawei's brand and sales channels. In 2024, sales of the AITO brand accounted for 90.9% of Seres's total revenue. The brand is deeply embedded in Huawei's "smart selection" ecosystem, from product definition to a sales network of over 1,000 Huawei and AITO stores. Seres warns in its prospectus that "any material disruption" to its relationship with Huawei could have a significant adverse effect on its business.
The second dependency is its high-leverage business model. Its debt-to-asset ratio of nearly 76% is higher than that of NEV peers such as BYD (71%), Li Auto(around 54%), and Xpeng(around 67%). The company also relies heavily on its supply chain for credit, with its trade and other payables period extending to 266 days, one of the longest in the industry and well above the sub-150-day average for competitors like BYD and Xpeng.
Third, the company is heavily dependent on Huawei's platform for its smart-vehicle capabilities, including the ADS advanced driver-assistance system and the HarmonyOS-powered cockpit. This technological edge is gradually eroding as other Huawei partners—including Chery Automobile, BAIC Group, and JAC Motors—launch competing vehicles, diluting the unique appeal of a "Huawei car."
A Pricing Test for the "Huawei-Powered" Model
The Seres IPO is widely seen as the first international pricing test for the "Huawei-empowered" business model. Hong Kong investors, known for prioritizing fundamentals like cash flow and technological moats over narrative, are expected to scrutinize the sustainability of the partnership.
"Its core selling point is the 'Huawei halo,' but at the same time, it's discounted for its lack of independence and sustainability," several institutional investors said.
Zhang Xiang, a visiting professor at Huanghe Science and Technology University and an auto industry analyst, argued that the relationship is mutually beneficial. "Seres and Huawei have a symbiotic relationship of mutual reinforcement," he told the publication, noting that their legally binding, long-term cooperation makes it a sustainable business model that can be evaluated alongside self-reliant peers.
Based on its 2024 revenue of RMB 145.18 billion yuan, Seres's H-share listing is valued at a static price-to-sales ratio between 0.95 and 1.05, below that of its Hong Kong-listed rivals Li Auto, Xpeng, and Nio Inc. as of October 2025.
In-House Brands Struggle in AITO's Shadow
The depth of the Huawei partnership stems from Seres's historical struggles to build its own brands. The success of AITO, as Zhang Xiang noted, "compensated for the predicament that Seres's own brands were unable to break through."
Beyond AITO, Seres's portfolio includes brands like Landian, Ruichi, Dongfeng Fengguang, and Dongfeng Xiaokang. Landian, launched in March 2023 to target the sub-150,000 yuan mainstream market, has seen its sales falter. In the third quarter of 2025, its core model, the Landian E5, sold only 4,848 units, a 33.8% year-over-year decline and a 19.7% drop from the previous quarter, starkly illustrating the challenge Seres faces in building brand equity without its powerful partner.