Zotye Auto attempts to redirect the capital market's focus towards itself by employing a strategy of 'risk disclosure intertwined with positive signals'.

On September 9, following two consecutive days of share price limit-ups and a cumulative deviation in share price increase exceeding 20%, Zotye Auto issued a notice on abnormal stock trading fluctuations, using cautious language.

Concurrently, this once-dormant automaker also announced that its new compact electric vehicle, the international version of Wink Y01, had entered batch trial production and was on the verge of entering SOP mass production.

On one hand, the listed company officially cautions about risks such as 'financial pressure and uncertainties in overseas markets.' On the other hand, it actively shares news about new car launches, overseas partnerships, and the resumption of production within the year.

It's evident to discerning observers that Zotye Auto aims to redirect the capital market's attention towards itself through a combination of 'risk disclosure and positive signals'.

However, beyond the facade of continuous share price limit-ups, it becomes apparent that this 'resurrected' automaker is actually confronting a dire survival situation, characterized by illusory accounting profits, a stagnant vehicle business, a vague overseas market strategy, and the looming threat of regulatory investigations.

The 'Illusion' of Accounting Profits Cannot Sustain the Core Auto Business

Amidst the ongoing price wars in the domestic auto market and profit pressures faced by most automakers, the most striking statement in Zotye's 2026 semi-annual report is that 'the net profit attributable to shareholders for the first half of the year was 80.3893 million yuan, marking a year-on-year increase of 154.36% and a turnaround from losses to profits.'

At first glance, this 'profit report' could easily be misconstrued as a signal of 'overcoming adversity.' However, a closer look at the subsequent data reveals the 'illusion' behind these profits.

The company's net profit after deducting non-recurring gains and losses for the same period was -152 million yuan, with the loss widening by 40.31% year-on-year.

In essence, Zotye's profits in the first half of the year did not stem from auto manufacturing.

Zotye itself also explicitly acknowledges in its financial report that the 230 million yuan in non-recurring gains primarily originated from two sources: firstly, 200 million yuan in compensation from canceling several inefficient, non-operational subsidiaries and production sites; and secondly, approximately 30 million yuan in non-operating income from cumulative litigation settlements. By disposing of idle assets and settling historical debts, the company achieved one-time accounting gains.

In other words, this did not provide any sustainable profitability for the core auto manufacturing business.

More alarmingly, the company's total revenue for the first half of the year was merely 190 million yuan, a year-on-year decline of 32.08%, with over 85% of income derived from auto parts and door industry businesses, while the vehicle manufacturing segment contributed virtually no scalable sales revenue.

This implies that Zotye's so-called 'turnaround from losses to profits' was essentially an accounting embellishment achieved through asset sales and debt clean-up, unrelated to the restoration of vehicle production capacity or growth in new car sales.

Presenting such a financial report as an 'auto company profit turnaround' is, in itself, a misdirection to capital market investors.

The most significant positive signal Zotye has released externally this time is that the new A0-class model, the international version of Wink Y01, has entered batch trial production and is about to enter SOP mass production, with the target market focused on overseas markets.

According to officially released parameters, this model is built on the S pure electric compact car platform, with dimensions falling between the BYD Seagull and Dolphin, featuring a minimalist tech design and developed for the global consumer market. Coupled with previously disclosed KD cooperation agreements in Indonesia and India, it's easy for outsiders to associate this with 'Zotye about to restart its vehicle business through overseas markets.'

However, in the auto industry, 'batch trial production' does not equate to mass production and delivery. For a new model to transition from trial production to stable mass production, it must overcome numerous hurdles such as reliability verification, supply chain coordination, production line ramp-up, regulatory certifications, and channel establishment. A failure in any link could indefinitely delay the mass production plan.

Zotye itself also explicitly cautions in the abnormal fluctuation notice that regulatory certifications, channel construction, and market demand in the target markets are uncertain, and subsequent mass production and market launch require continuous capital investment, with the availability of funds being uncertain.

Therefore, after undergoing bankruptcy reorganization and experiencing long-term production halts, Zotye has long lost a stable vehicle manufacturing system. Currently, the company still faces clear financial pressure, unable to even self-sustain its core operations, making it incredibly difficult to support a new model from trial production to large-scale overseas delivery.

More critically, the so-called KD cooperation in India and Indonesia currently remains at the stage of 'reaching consensus and signing framework agreements,' with no public implementation timeline or clear order volume.

In today's fiercely competitive global new energy vehicle market, where Chinese mainstream automakers already dominate, launching a new model without domestic market verification and with almost zero brand recognition to carve out a niche in emerging overseas markets is inherently a low-probability event. Zotye pinning all its hopes on overseas models yet to generate sales is essentially using a distant expectation to support its current share price narrative.

Zotye Has Long Lost the Foundation to Compete Again

Many may interpret Zotye's current resumption attempt as a 'comeback of a veteran automaker from the brink.' However, as we all know, today's Chinese auto market is no longer the incremental market of a decade ago, where reverse engineering and low-price volume sales could secure a foothold. Instead, it's a mature red ocean characterized by technological competition, overcapacity, and strong "winner-takes-all" effects.

In today's A0-class new energy market, models like the BYD Seagull and Wuling Hongguang MINIEV firmly dominate the basic market, while autonomous brands like Geely, Chery, and Changan continue to increase their presence, and new energy brands' compact models are also penetrating downward. In this segment, product strength, cost control, supply chain efficiency, channel coverage, and brand reputation are all indispensable.

Zotye not only lacks experience in mass vehicle production for years but also carries the negative brand image from its early days of 'copycat Porsche designs.' Its domestic sales channels have largely collapsed, and user reputation is almost exhausted. Without a foothold in the domestic market, directly jumping to make breakthroughs in unfamiliar overseas markets is inherently an avoidance of the core issues.

More fatal than market competition are Zotye's own governance and regulatory risks. In July this year, the company was placed under investigation by the China Securities Regulatory Commission for suspected illegal information disclosure. As of now, the investigation results have not been released, and this looming threat could bring new uncertainties to the company at any time.

Prior to this, the company has also experienced internal turmoil such as management infighting and unsuccessful attempts by directors to remove the chairman, with its corporate governance structure remaining unstable. Coupled with historical debt issues, consistently high asset-liability ratios, and extremely weak net asset scale, this automaker's risk resistance capability has already fallen to the industry's lowest level.

Over the past few years, Zotye has repeatedly released signals of resuming production, from 'model design freeze' to 'supplier designation completion,' and then to 'batch trial production initiation.' Each step could stimulate the capital market's sensitive nerves, but it has never truly launched a mass-produced model for the market with stable delivery.

It's clear that this time's Wink Y01 will again be a case of 'much ado about nothing' in terms of expectations.

For an automaker that has experienced a life-and-death crisis, the outside world has not been without giving it opportunities to rise again. However, the auto industry has never been a game that can be turned around through capital narratives alone. What Zotye should do most urgently now is not to use vague expectations of 'overseas mass production' to drive up its share price but to face the realities of core business losses, financial tightness, and fierce market competition.

From batch trial production to truly achieving stable vehicle sales, the time and window for this once-lagging automaker have long since vanished. So, in 2026, if it continues to rely on stories like 'dressing up financial reports with non-recurring gains and stimulating share prices with resumption expectations' to deceive the public, then after this round of capital market enthusiasm fades, what awaits Zotye will only be another failure of its 'resumption narrative.'

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