According to reports, Seres recently announced its intention to invest in Shenzhen Yinwang Technology Co., Ltd. (Yinwang). The goal is to support Yinwang in becoming a world-class leader in automotive intelligent driving systems and components, and an open platform serving the automotive industry. Specific investment amounts, transaction methods, and terms will be subject to the final agreement signed by both parties.

If the transaction is completed, Yinwang will become an associate subsidiary of Seres, and the scope of the company's consolidated financial statements will not change. The transaction is expected not to constitute a related-party transaction, nor will it result in a restructuring or a change in control of the listed company.

As of now, Huawei Technologies Co., Ltd. (Huawei) holds 100% of Yinwang's shares.

Yinwang: Huawei Auto BU's Entity

On January 16 this year, Yinwang was officially established with a registered capital of 1 billion RMB. Fully owned by Huawei, it is engaged in the development, design, production, sales, and service of automotive intelligent systems and components solutions. Its main business areas include automotive intelligent driving solutions, intelligent cockpits, intelligent vehicle control, intelligent vehicle cloud, and in-car optics. Confirmed by Huawei, the new company is the entity of Huawei's Automotive BU.

Industry insiders explain that Huawei's Automotive BU is a technology and packaged solution provider, while Yinwang is positioned as an "open platform involving joint participation of the automotive industry," transforming Huawei's Automotive BU into a fusion community of "demand + supply." Huawei has established wholly-owned subsidiaries in Dongguan, Nanjing, Suzhou, Shanghai, and Hangzhou.

Additionally, Huawei has applied for multiple trademarks such as "Yinwang," "Inlook," "Incrowd," "INVISOL," and "INNOWARD," with international classifications including scientific instruments and transportation vehicles. However, it remains uncertain whether the "Yinwang" logo will appear on partner vehicles in the future, according to relevant business personnel.

Seres: Multiple Olive Branches Proposer

Since establishing a cross-industry business cooperation relationship with Huawei in 2021, Seres and Huawei have successively launched the Wenjie M5, M7, and M9 series models, becoming significant growth drivers for Seres.

Statistics show that the Wenjie series delivered 42,800 vehicles in June alone, a month-on-month increase of 654.76%, setting a historical record. In the first half of 2024, the Wenjie series delivered a total of 100,800 vehicles, turning Seres' performance from loss to profit. The company expects half-year revenue to be between 63.9 billion and 66 billion RMB, a year-on-year increase of 479%-498%, and net profit to be between 1.39 billion and 1.7 billion RMB, compared to a loss in the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between 1.19 billion and 1.5 billion RMB, compared to a loss of 1.88 billion RMB in the same period last year. This marks the first potential half-year profit for Seres in six years.

However, the cooperation between Seres and Huawei goes beyond this.

On July 2 this year, Seres announced that it would spend 2.5 billion RMB to purchase the Wenjie trademark from Huawei, further solidifying their cooperation. Additionally, both parties signed an agreement to further deepen their joint business cooperation, leveraging their respective strengths to establish Wenjie as a world-class luxury automotive brand.

Changan: Yinwang's Introducer

Before Seres, Changan Automobile had already disclosed progress in its investment in Yinwang, with relevant information about Yinwang entering the public eye at the end of last year.

On November 25, 2023, Changan Automobile and Huawei signed an "Investment Cooperation Memorandum," with Huawei planning to establish a company (later known as "Yinwang") engaged in the development, design, production, sales, and service of automotive intelligent systems and components solutions. Changan Automobile and its affiliates intend to invest in this company, with a stake not exceeding 40%.

On May 6th this year, Changan Automobile further announced that its investment cooperation project with Huawei is progressing actively, with both parties negotiating key transaction terms, expected to sign the final agreement no later than August 31, 2024.

With Seres announcing its investment in Yinwang, subsequent cooperation between the two parties may become closer. Seres' brand models can integrate the latest technology from Huawei's Automotive BU, seizing the opportunities presented by the electrification and intelligent transformation of the automotive industry.

Notably, the "Investment Cooperation Memorandum" explicitly states: "The target company will gradually open its equity to existing strategic partner automakers and other investors of strategic value, becoming a company with diversified equity." From this perspective, following Changan Automobile and Seres, Yinwang may attract more automaker investments in the future.