(Yicai) Sept. 18 -- Seres Group, the car production partner of Chinese tech giant Huawei Technologies, said it plans to invest CNY13.2 billion (USD1.9 billion) to boost its intelligent product development and production capabilities.

Seres will inject CNY5 billion (USD700 million) into its subsidiary Seres Automobile, increasing its registered capital to nearly CNY10 billion, the parent firm announced on Sept. 13, just before China’s long holiday weekend. It will also fully acquire Longsheng New Energy Technology by issuing new shares to the target company's shareholders for CNY8.2 billion (USD1.2 billion), it added.

Seres Auto researches, develops, makes, and sells new energy vehicles. It produces the Aito brand electric vehicles, which use smart vehicle technology developed by Huawei. Longsheng New Energy's main asset is a intelligent EV factory in Chongqing, where Seres is headquartered, which has been leased to Seres to make new smart autos since going live.

The capital increase in Seres Auto will help enhance the unit's capital strength and reduce its debt-to-asset ratio, Seres noted. It had net assets of minus CNY8.6 billion as of the end of the first half of this year, narrowing from minus CNY10.7 billion at the end of last year, it added.

Thanks to strong sales if its newly released Aito models, Seres Auto swung into the black with a net profit of CNY1.2 billion in the six months ended June 30 on revenue of CNY61.7 billion, the parent firm noted. Its net loss reached CNY5.3 billion last year, while revenue was only CNY26.9 billion.

"Upon completing the transaction, Seres will gain 100 percent ownership of the Seres super factory, which will help ensure security, stability, and autonomous control in the company's production," it noted. “This will also enhance the asset integrity and control of key business operations.”

With a much fuller wallet, Seres had already invested nearly CNY15.5 billion in the second half of this year before the latest plan after completing several equity investments and patent asset purchases, including spending CNY11.5 billion to buy 10 percent of Yinwang Intelligent Technology, Huawei's intelligent driving unit.

Shares of Seres [SHA: 601127] closed 2.1 percent higher at CNY75.32 (USD10.62) each in Shanghai today, after jumping by as much as 3.4 percent at one point. The market resumed trading after the two-day break for the Mid-Autumn Festival.

Editor: Martin Kadiev