Beijing (ZXZC)- On January 30, SERES Group, Huawei’s car-making partner previously known as Chongqing Sokon Industry Group, announced it projects an annual net loss in the year 2022. 

Photo credit: AITO

In the past year, SERES Group projects a yearly revenue of 33.5 billion yuan to 35 billion yuan ($4.96 billion-$5.19 billion), which should rocket 100.38% or 109.36% year over year. 

However, the company forecasted a net loss attributable to shareholders amounting to 3.95 billion yuan to 3.5 billion yuan ($585.39 million-$518.7 million) in 2022. In comparison, the group’s net loss came in at 1.82 billion yuan ($269.72 million) in 2021. 

After deducting non-recurring gains and losses, SERES Group’s 2022 annual net profit is estimated to stand at 3.85 billion yuan to 4.3 billion yuan ($570.57 million-$637.26 million), versus the net loss of 2.79 billion yuan ($413.48 million) posted in 2021. 

In 2022, the price of raw materials such as chips and power batteries rose significantly, resulting in a higher production costs, SERES Group explained. Despite the consecutive positive sales growth in the first three quarters of 2022, the coronavirus outbreak still affected the foot traffic of the automaker’s offline stores, marketing activities, supply chain, logistics, and production. 

Moreover, SERES Group claimed that its auto production and sales did not meet its previous expectations. At the same time, the group made large investment preliminarily in fixed assets. The high depreciation and amortization expenses also affected the company’s profitability throughout 2022.