(Yicai) June 13 -- Chinese auto manufacturer Seres Group, which turned a profit for the first time since 2020 in the first quarter, has purchased the remaining equity in a loss-making subsidiary for almost three times the market value well before the agreed deadline to keep to its agreement with the two state-owned investors that helped set the subsidiary up.

Seres will buy the 55 percent stake in Seres Electric Vehicle held by Chongqing Jingyun Chuangfu Enterprise Management and Chongqing Saixin Private Equity Investment Fund for CNY1.3 billion (USD179.3 million), the Chongqing-based company said on June 11. The value of the equity had plunged to CNY431.5 million (USD59.9 million) as of the end of March.

Seres Electric was set up by Seres and the two investment firms in 2022, with a registered capital of CNY2 billion (USD275.8 million). Seres contributed 45 percent of this, Jingyun Chuangfu 40 percent and Saixin Fund the rest. It was agreed at the time that Seres would buy the stakes held by the two investors within three years, or by January 2025, for them to recoup their investment.

But Seres Electric has been losing money since it was founded and as of the end of March, it only had net assets of CNY784.5 million (USD108 million).

Seres has repurchased the equity at a high premium and ahead of schedule to avoid any future complications when its performance improves and funds are more abundant, industry insiders said.

In the first quarter, Seres turned a profit for the first time in four years, raking in CNY220 million (USD30.3 million), while revenue more than quintupled to CNY26.6 billion (USD3.7 billion), mainly thanks to surging sales of its Aito marque, an electric car brand built in collaboration with Huawei Technologies.

Aito sales soared seven-fold in the first five months from a year earlier to 141,145 units, driving up the firm’s new energy vehicle shipments almost four-and-a-half times to 156,823 autos, according to the company's latest data.

Editors: Dou Shicong, Kim Taylor