Unitree Robotics’ first-day trading session in Shanghai delivered a blockbuster debut, with shares jumping more than sevenfold and the company’s valuation exceeding $50 billion. The surge underscored investor appetite for China’s robotics sector, though it also triggered a broad pullback among listed peers as valuations came under scrutiny.
China’s major robotics stocks retreated on Wednesday, reflecting a divergence between Unitree’s blockbuster debut and the sector’s uneven fundamentals. UBTECH Robotics fell 10.4% to close at HKD 84.95, while Nanjing ESTUN Auto declined 9.99% to CNY 36.04. The Global X China Robotics & AI ETF, a bellwether for the segment, dropped 4.9%.
Five of the six largest listed Chinese robotics companies remain unprofitable, despite revenue growth ranging from 17% to 58% in the last 12 months. Shenzhen Inovance Technology was the sole exception, posting a 17.1% revenue increase and a 14.4% return on equity, supported by a conservative 8.5% debt-to-equity ratio. Its shares, valued at CNY 59.91, carry a forward price-to-earnings ratio of 28.8x and offer a 25.4% fair-value upside, according to available data.
Horizon Robotics, trading at HKD 4.76, reported 57.7% year-over-year revenue growth but posted a negative 85.3% return on equity. SenseTime, listed at HKD 1.44, posted 32.9% revenue growth but remained unprofitable with a -7.0% ROE. SIASUN Robot, at CNY 15.51, saw negligible revenue growth and a -10.4% ROE, while UBTECH’s high valuation metrics included a trailing P/E of -58.3x and a 16.2% debt-to-equity ratio.
The market reaction followed Unitree’s debut, which catapulted the company into the spotlight amid broader questions about sustainability in China’s robotics sector. Analysts noted that while revenue growth remains robust, profitability remains elusive for most players, raising concerns over stretched valuations despite Unitree’s strong debut.
