Orbbec motors into rapidly cooling robotics IPO market

Stumbling sentiment towards robotics may force the company to discount its planned Hong Kong share sale to attract investors

Key Takeaways:

• Orbbec has filed for a Hong Kong IPO, reporting its profit fell by more than 30% in the first half of this year
• The company said revenue for its sensors that enable robots to “see” surged by 50% during the six-month period

By Cheng Shui Tong

After going on steady upward roll for much of the last two years, robotics stocks have recently shifted into reverse, throwing a wrench into grandiose plans of the latest companies still coming to market.

One of those latecomers is Orbbec Inc. (688322.SH), whose sensors let robots “see” their surroundings, and which submitted its application for a Hong Kong IPO to the stock exchange late last month. The company boasts a relatively unique place in the robot universe and stands out as a leader in its niche. Still, its poor timing means it may need to significantly lower its own sights to attract investors.

Orbbec’s two main revenue sources are sensors, as well as system-level devices and solutions used for functions like 3D scanning and payment terminals. The company has established itself as the leader for sensors, ranking first last year with 29% of the global robotics 3D visual perception market, according to third-party market data in its prospectus. It also ranked first globally in consumer-grade 3D scanners and biometrics recognition payment terminals, the document showed.

High-growth sector

Orbbec looks attractive for its position in a sensor market with big growth potential. The global robotics 3D visual perception market was worth about 600 million yuan ($89.5 million) last year, and is expected to grow at a blistering pace of 84.4% annually to reach 11.7 billion yuan by 2030, according to market research in the prospectus.

While its prospects look good, we should note the company’s latest revenue growth has slowed sharply, and its profits have also been volatile. Its revenue rose 56.8% to 564 million yuan in 2024, and climbed another 66.7% to 941 million yuan last year. But things slowed sharply this year, as it managed just 0.5% revenue growth in the first half to 438 million yuan. The slowdown owed to a big drop in its system-level devices and solutions, which was mostly offset by continued strong gains for its sensor business.

On its bottom line, Orbbec swung to a profit of 128 million yuan last year, after recording losses of 276 million yuan and 62.91 million yuan in 2023 and 2024, respectively. But its profit fell by 31.7% year-on-year to 41.64 million yuan in the first half of 2026, showing it’s still not operating firmly in the black.

Big R&D spending

The volatile bottom line owes to stiff competition in the robotics field, which means companies must spend heavily on R&D to maintain an edge over their rivals. Orbbec’s R&D spending totaled 301 million yuan in 2023, before falling to 204 million yuan and 203 million yuan in 2024 and 2025, respectively, enabling its drive into the black last year.

But now those costs are rising again, with R&D spending up 22.2% in the first half of this year to 111 million yuan. That increase, coupled with rising raw material costs, were important factors behind its profit decline in the first half of this year.

Orbbec’s two major revenue sources, sensors and system-level devices and solutions, are showing distinctively different trends in terms of gross margins lately. That metric for its sensors has climbed steadily from 38.7% in 2023 to 55.5% in the first half of 2026. But the opposite is true for system-level devices and solutions, whose gross margin dropped from 46.8% to 41.3% over that time, leading the company to lean more heavily on its sensor business.

Revenue from the sensor business grew by 50% year-over-year to 207 million yuan in the first half of 2026, lifting its contribution to 47.3% of the total from 31.7% the previous year. By comparison, revenue from system-level devices and solutions fell by 30% to 203 million yuan in the latest six-month period, dropping its contribution to 46.3% of total revenue from 66.5% a year earlier. The growing importance of sensors has also lifted the company’s overall gross margin to 46.3% in the first half of this year from 40.3% a year earlier.

As its revenue mix shifts, Orbbec also faces a risk from its relatively small customer base. Sales to its top five customers rose steadily from 37.6% of its total in 2023 to 63.9% last year, though the figure retreated to 46.6% in the first half of 2026. Sales to its single largest customer reached 30% in 2025, before pulling back to 27.3% in the first half of this year.

Rocky road for robotic stocks

Robotics stocks became a hot category on the Hong Kong Stock Exchange after they began listing there over the last two to three years. Companies such as Ubtech (9880.HK), Geekplus (2590.HK) and Dobot (2432.HK) were once popular among short-term traders, who pocketed quick profits as the stocks posted strong gains on the sector’s popularity. But that sentiment has cooled notably lately, with many companies now down by 60% to 70% from their peaks.

Many companies to list recently have received icy receptions. One exception was industry leader Unitree (688836.SH) whose shares rose more than sevenfold in the days after their Shanghai IPO in August. But the stock has plummeted by more than 50% from its high since then, reflecting cooling sentiment and a bursting of the speculative bubble.

Hong Kong-listed robotics stocks have delivered similarly uneven performances this year. Excelland (3231.HK) and Rokae (3752.HK) have both performed well since their debuts, while Mech-Mind (9615.HK) has traded below its listing price. Ldrobot (1236.HK) more than doubled on its debut, only to subsequently fall below its IPO price.

Orbbec is distinguished from many of these due to its focus on vision products, rather than complete robots. Its products enjoy broader applications, and the listed company with the most comparable business is Mech-Mind. Orbbec operates on a relatively larger scale and has already achieved profitability, whereas Mech-Mind remains money-losing though its gross margin is higher at more than 60%.

Mech-Mind currently trades at a price-to-sales (P/S) ratio of about 22 times, while the ratio for Orbbec’s Shanghai-listed shares is quite a bit higher at 37 times. A dual-listed company’s Hong Kong shares typically trade at a 30% to 40% discount compared with its domestic stock in Shanghai or Shenzhen, meaning Orbbec may need to seek a P/S ratio of 22 to 26 times for its Hong Kong shares. A pricing at that level could help to attract investors, drawn by its industry-leading position and profitability.

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