Robotic dreams get too expensive for investors

After a boom that lifted humanoid robot stocks to lofty heights, a recent selloff shows investors are reassessing growth expectations and the path to profitability

By Lee Shih Ta

The rise of large AI models has made humanoid robots a major draw for investors searching for the next big thing. As AI gets better at understanding instructions and planning tasks, the prospect of robot armies entering factories and homes has attracted substantial investor interest. Advances in walking, handling objects and performing have also made investors more willing to pay a premium for revenue that has yet to materialize.

China’s embodied AI sector recorded 172 investment and financing transactions totaling about 109.2 billion yuan ($16.4 billion) in the first half of this year, according to iiMedia Research. The state-run Securities Daily reported in October that more than a dozen companies across the robotics supply chain have listed in Hong Kong since 2025, with more than 30 others in the pipeline. From startup funding to public listings, robotics became a sector investors were rushing to enter.

But post-IPO share prices show just how quickly sentiment can change. Unitree Robotics (688836.SH) went public in August at 150.8 yuan per share and opened its first trading day at 1,100 yuan, 629% above its offering price. The stock then declined to a low of about 404 yuan in mid-October, more than 60% below its first-day high. By Nov. 6, it had rebounded to 656.62 yuan, still about 335% above its IPO price. Within just a few months, investors have assigned vastly different values to the same business. Expectations for humanoid robots remain high, but there is little agreement on what they are worth.

The excitement has extended well beyond humanoid robots. Makers of robotic arms, as well as warehouse and hotel delivery equipment have moved into embodied AI, raising expectations beyond their existing businesses. Before new products and applications have generated much – if any – revenue, the possibility of reaching larger markets has already begun to show up in share prices.

Collaborative robot supplier Dobot (2432.HK) is one example. The company unveiled its Atom humanoid robot in March last year, while its shares were added to Northbound Stock Connect, making them available to Mainland China-based buyers. That helped send its shares to HK$83.80, about 4.5 times their HK$18.80 IPO price. But by Nov. 6 this year, the stock closed at HK$16.70, down 80.1% from that peak and below the IPO price.

Warehouse robot supplier Geekplus (2590.HK) also introduced a wheeled humanoid robot and an embodied AI framework this year. Yet its shares fell from a January high of HK$33.50 to just HK$6.40 on Nov. 6, a decline of 80.9% and 61.9% below their HK$16.80 offering price. The two stocks weakened at different times, showing that the correction has been underway for some time.

IPO investors have not necessarily escaped losses either. Hotel service robot supplier Yunji (2670.HK) attracted about 260,000 applicants when it offered shares last October, with retail subscriptions exceeding 5,600 times the shares available. A year later, its stock was trading at just HK$2.68, about 72% below its split-adjusted offering price of HK$9.56.

These companies operate different businesses, and their shares are also affected by earnings, shareholder transactions and liquidity. But as investors reassess the prospects for new businesses, a more pressing question is whether existing revenue and earnings can justify the previous high prices.

Revenue rises as valuations cool

Some companies are still making strong operational progress. Geekplus’ revenue rose 25.3% to 1.28 billion yuan in the first half of this year, while new orders increased 35.5%. An unfavorable swing in foreign exchange rates and spending on embodied AI-related R&D widened its loss for the period to 177 million yuan. Its adjusted loss, however, narrowed 32.1% to about 60.61 million yuan. But the rising revenue and orders have not stopped the stock’s decline, showing that operating performance and market pricing can move in different directions.

Dobot illustrates the cost of expansion. Its first-half revenue rose 106.6% to 316 million yuan, while its loss widened from 40.87 million yuan to about 108 million yuan. R&D spending increased about 148% to 102 million yuan, with selling expenses and foreign exchange losses also rising. Those investments will help the company pursue future markets, even though they increase spending now on uncertain returns that remain in the future. Beyond revenue growth, investors must consider how much more funding a company needs before it can generate consistent profits.

An increase in tradable shares can also test investors. Dobot fell more than 15% in early trading when its one-year IPO lockup expired last December. As early shareholders gain opportunities to exit and more peers go public, investors have more choices, making it harder for companies to sustain high share prices on the robotics theme alone.

Similar pressure is emerging in markets for shares of non-public companies. The Securities Times reported on Oct. 29 that existing shares in some embodied AI companies were being offered at 65% to 80% of their valuations in the previous funding round. Asking prices do not establish completed transactions, and early shareholders may still profit from discounted sales. But they at least show that some holders are willing to accept less in exchange for an earlier exit.

Institutional expectations are also shifting. Daiwa lowered its global humanoid robot shipment forecasts on Oct. 30, with its latest estimates calling for 54,000 units this year and 112,000 next year, while it remained positive on Ubtech (9880.HK). That shows institutions still see opportunities in selected companies, but are applying clearer expectations for shipment schedules, delivery capabilities and valuation differences.

For companies that have yet to go public, falling peer valuations also make pricing for new IPOs more difficult. Microintelligence announced a postponement of its IPO shortly before its planned October listing, citing factors including market conditions. The underwriting agreement for its international offering was not signed. One postponement does not establish that the window for robotic IPOs has closed. But companies seeking to maintain their rich valuations will need to show evidence of strong operations and growth potential.

Whether that growth arrives on schedule still depends on technological progress. Unitree founder Wang Xingxing acknowledged on Nov. 4 that robots can achieve high success rates after training at fixed workstations, but their efficiency still needs improvement. In precision tasks, “the last few millimeters remain unresolved,” he said, predicting further breakthroughs over the next one to three years.

Companies need time to solve those problems, while continuing to pay for R&D, manufacturing and sales. The humanoid robot boom led the market to price in years of future growth upfront. Investors are now recalculating the cost of waiting. The industry continues to attract capital for its prospects. But how much of their valuations individual companies can retain will increasingly depend on their ability to turn spending into steady revenue and profits.

Lee Shih Ta is an editor at Bamboo Works.

You can contact him at shihtalee@thebambooworks.com

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