BREAKINGVIEWS-China’s robot champion has everything to lose

By Robyn Mak

HONG KONG, March 26 (Reuters Breakingviews) - China's early lead in the global robotics race looks less formidable up close. National champion Unitree sold 5,500 humanoid machines last year, while Tesla TSLA.O sold none. That puts the 10-year-old company, which is on track for a rare mainland initial public offering, well ahead of far larger rivals including Elon Musk's electric-vehicle giant. Yet breakneck technological advances threaten its first-mover advantage.

The manufacturer formally known as Yushu Technology, last week, cleared a notable milestone: its application to go public on Shanghai's tech-focused Star Board was accepted, paving the way to raise $610 million in what would be this year's largest debut to date. For the past few years, regulators have reduced the number of onshore listings to a trickle in a bid to shore up flagging markets; companies – mostly in tech, healthcare and chemicals – raised roughly $18 billion last year, just a quarter of the 2021 total, per data from Dealogic.

Unitree looks like the ideal IPO candidate for Beijing. The company, which specialises in quadruped and increasingly humanoid robots, is already a household name; its dancing and martial arts-performing robots have featured in the Spring Festival gala, the country's biggest televised event akin to the Super Bowl in the United States. Critically, Unitree is a trailblazer in the so-called embodied intelligence industry, where artificial intelligence meets the real world. It's an area that President Xi Jinping wants China to dominate in order to turbocharge the $20 trillion economy's manufacturing prowess. Full government support has buoyed the sector's prospects: Chinese humanoid robot sales are forecast to top 23 million units by 2040, up from 28,000 this year, analysts at Morgan Stanley estimated in January.

China's robot specialists, though, have their work cut out to reach those lofty projections. True, Unitree looks impressive: its prospectus reveals revenue in 2025 more than quadrupled to 1.7 billion yuan ($246 million) while net profit more than doubled. And thanks to vertical integration and ruthless cost discipline, the company boasted a gross profit margin of 60%, besting Apple's AAPL.O 47% for the last fiscal year.

Yet Unitree admits it's still early days. One big challenge is manufacturing multi-finger dexterous hands so that a robot can manipulate and interact with objects designed for humans; moreover, robot-makers lack the AI models that would enable intelligent decision-making and adaptability to non-standardised scenarios. Unitree says applications of its humanoid machines remain largely limited to research and testing.

The risk is that deep-pocketed challengers, including Tesla and Hyundai's Boston Dynamics, will make breakthroughs in the "brains" and applications of robots while closing the manufacturing gap with Chinese rivals which are already disadvantaged due to Washington's restrictions on high-end AI chips. Unitree will have to work hard to protect its lead.

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CONTEXT NEWS

Yushu Technology, also known as Unitree Robotics, on March 20 filed for an IPO on the Shanghai Star Market, indicating that its application has been accepted by the exchange. The company is seeking to raise 4.2 billion yuan ($610 million), according to its draft prospectus.

The company, which makes both quadruped and humanoid robots, reported revenue of 1.7 billion yuan in 2025, up 335%. Net profit more than doubled to 287.6 million yuan.

Unitree says it ranked number one globally in humanoid robot shipments last year, selling 5,500 units.