Strategic and Valuation Analysis of Seres' Newly Added AI Business Scope

Seres has added business scopes like “artificial intelligence basic software development, artificial intelligence theory and algorithm software development, artificial intelligence application software development” to its license. This is not only legal reinforcement but also reflects its ambition to evolve from “hardware + integration” to “software + service”. Self-developed AI basics and algorithms will directly support perception, decision-making and scenario adaptation for AITO series “Huawei Smart Selection” models, strengthening its voice in Huawei’s “Yinwang” ecosystem and reducing dependence on external suppliers (especially ADAS stacks and intelligent cockpit algorithms) to enhance differentiation. This synergizes with its embodied intelligence/robotics business,有望 closing data loops in high-end intelligent vehicles and new mobility forms (e.g., intelligent driving services, robot ecosystems) to boost monthly delivery and gross profit elasticity[1].

Expanding AI scope also helps replicate the “high-end + intelligent + service” logic overseas. Integration of Huawei ADS, AITO products and new AI modules provides technical and brand endorsement in low-penetration markets like Europe, enabling overseas expansion via customized intelligent driving experiences besides hardware exports, accelerating internationalization of AITO M7/M8/M9[1]. Enhanced AI capabilities also improve bargaining power and cooperation depth under the “Huawei Yinwang 10% equity” model, consolidating priority supply and tech upgrade rights in Huawei’s system.

Latest DCF analysis shows significant valuation upside (base case discounted value ~3,970 yuan, over 30x potential upside vs current price)[0]. AI integration means revenue growth no longer relies solely on vehicle sales; high-margin soft revenue can be generated via software/data services (intelligent driving subscriptions, OTA增值, embodied intelligence terminals). If AI products are modularized and replicated to other Huawei partners in Yinwang system, marginal profit margin and ROE may rise further, moving closer to a high-market-cap intelligent software service firm.

Financial analysis shows Seres has turned profitable, with ROE at 32%—key indicators of good capital efficiency and R&D support[0]. The new AI business and investment income from “cash acquisition of Yinwang equity” form dual support. In future annual 3%-5% investment income contributions, enhanced AI may bring more tech sharing and faster new product launches, sustaining revenue and net profit growth[1].

1. Policy & Safety Supervision
   : AI/intelligent driving depends heavily on policy boundaries. Slower L3 rollout or safety incidents may slow promotion and adjust subsidies; monitor regulatory trends closely[1].

2. Homologous Competition
   : Converging AI capabilities with other Huawei partners (e.g., Avita). Unclear differentiation may blur brand positioning or cause internal resource competition[2].

3. Overseas Certification & Supply Stability
   : Despite enhanced AI software, overseas certifications (e.g., EU WVTA) and computing power/chip supply remain bottlenecks; need coordinated software-hardware delivery.

Including AI development in business scope marks Seres’ transition from “intelligent car maker” to “AI + intelligent mobility platform”. Capital/tech binding with Huawei Yinwang and investment in embodied intelligence give it a first-mover advantage in software voice for intelligent driving algorithms, software ecosystems and data services. Valuation logic will tilt toward “high growth + high ROE” tech platform model. If AI capabilities are quickly deployed via Huawei ecosystem into sustainable service revenue, its valuation premium over traditional automakers may widen. However, investors need to watch policy pace, internal interest coordination and overseas compliance.

[0] Jinling API Data
[1] Xueqiu- “Under High Growth Expectation of L3 Luxury Track, Underlying Support for Seres’ High Revenue/Profit Growth” (https://caifuhao.eastmoney.com/news/20251219124745165221510)
[2] Sina Finance- “5th Year of No Car-Making: 2025, Car Companies Can’t Avoid Huawei” (https://finance.sina.com.cn/cj/2025-12-28/doc-inheihxp0823623.shtml)