Chongqing Sokon, an automotive industry partner of Huawei, announced on July 14 that it expects to achieve operating income of 12 billion yuan to 12.6 billion yuan ($1.78 billion – $1.87 billion) in the first half of 2022, up 62.5% to 70.63% year-on-year.
Sokon explained that the increase was mainly due to a monthly increase in the delivery of new energy vehicles of Seres, an new energy vehicle brand and Sokon subsidiary, and the net cash flow from the company’s operating activities was greatly improved. At the same time, the company’s new energy vehicle’s gross profit margin also increased compared with last year.
However, in the first half of this year, the net profit attributable to the parent company of Sokon will still suffer a loss compared with the same period of last year. The company predicts that in the first half of 2022, its net profit attributable to the owners of the parent company will be -1.76 billion yuan to -1.6 billion yuan.
Sokon explained that this is mainly due to the continuous investment in the R&D of Seres new energy vehicles, the large investment in fixed assets in the early stage, the growing production and sales volume, as well as increased depreciation and amortization expenses. At the same time, with the new energy vehicles of Seres entering the marketing period, expenses and labor costs have also increased.
Since 2022, the sales volume of Sokon’s new energy vehicles has reached record highs. From January to June this year, the company produced 47,700 new energy vehicles and sold 45,600 new energy vehicles, up 255.12% and 204.51% year-on-year. Among them, the sales volume of Seres new energy vehicles increased rapidly, contributing 21,600 vehicles, accounting for nearly 50% of the company’s new energy vehicle sales.
In order to facilitate investors to accurately understand the company’s current positioning and match its name with business and strategic planning, Sokon also plans to change the Chinese name of the company to “Seres Group Co., Ltd.”
At present, Seres has built a world-leading R&D base, mastered more than 1,000 patented technologies, and has created a dual technology path of extended range and pure electricity. Especially in the field of extended range, Seres has independently developed a pure electric drive intelligent extended range platform (DE-i), and plans to build two smart factories according to Industry 4.0 standards.