Sokon Group projects net loss in billions in 2021, due to heavy investments in SERES

Beijing (Gasgoo)- Chongqing Sokon Industry Group Stock Co., Ltd. (Sokon Group), the parent company of the auto brand SERES, recently released its 2021 annual performance projection report with an estimated annual loss posted.

AITO M5; photo credit: AITO

The company expects loss to widen in 2021 compared with the previous year. According to the report, in 2021, Sokon Group’s net loss attributable to shareholders is projected to be from RMB1.95 billion to RMB1.55 billion ($308.32 million to $245.07 million). Net loss after non-recurring deductions is estimated to be around RMB2.91 billion to RMB2.51 billion ($460.11 million to 396.86 million).

In 2020, Sokon Group posted a net loss attributable to shareholders of RMB1.73 billion ($273.54 million), with its net loss after non-recurring deductions amounted to RMB2.31 billion ($365.24 million).

Specifically, Sokon Group said that its SERES new energy vehicle business saw an RMB1.4 billion ($221.36 million) net loss in 2021, despite its growing sales. The company explained that the unsatisfying results are caused by the massive investments needed to build the brand up, including sales, fixed assets, amortization of intangible assets, R&D costs, labor, and construction of distribution channels.   

Notably, on January 27th, Sokon Group announced that it planned to raise RMB7.13 billion ($1.125 billion) through private placement. Moreover, the group intends to develop six new electric vehicle models, three high-end intelligent electric vehicles, and three practical electric vehicle models with the money. The project will cost the company roughly RMB4.75 billion ($479.43 million), with RMB4.31 billion ($680 million) from this private placement round.

Currently, the group only has one high-end EV model on the market, the AITO M5, co-developed by SERES and HUAWEI.