Since its debut on the stock market, UBTech has captured the imagination of investors as the first publicly traded humanoid robotics firm in the worldIts appearances during prestigious events like the Spring Festival Gala have only added to its allureThe company received serious backing from notable investors including Tencent, iFlytek, and Haier, with its Series C funding round in 2018 raising a staggering $820 million, setting a record for single-round financing in the AI sectorIn addition, it attracted investments from several state-owned enterprises prior to its public offering.
In China's robotics landscape, UBTech has undoubtedly emerged as a prominent player, akin to a rising star in an otherwise competitive field.
However, the winds changed dramatically as 2024 drew to a close
Following a series of announcements and significant sell-offs by investors, UBTech's stock closed at HK$54.95 per share, marking a 12.01% decline, with intraday lows reaching HK$54.60, the lowest in nearly a year.
The evolving market conditions and uncertainties present considerable challenges for this leader in humanoid robotics.
The aftermath of the stock lock-up saw its price nearly halved.
As UBTech marked the one-year anniversary of its listing, it faced a pivotal moment in its journey.
On December 29, 2023, UBTech went public, with an initial share price set at HK$90. Early on, its stock skyrocketed to as much as HK$328, pushing its market capitalization beyond HK$140 billion.
However, that era of glory is long gone
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As 2025 began, UBTech's situation turned dire.
On December 29, 2024, it was announced that the Chairman of the Board, CEO Zhou Jian, along with other key stakeholders, nullified their previous agreement to act in concertThe agreement between Shenzhen Smart Decision Investment and Zhou Jian was also revoked.
With this termination, Zhou Jian, along with the previous concert parties, now holds less than 30% of voting rights, no longer being UBTech's controlling shareholderThis left the company without a clear major shareholder or actual controller.
Moreover, the end of the agreement potentially opens the door for significant share divestments, especially among shareholders such as Zhao Guoqiun and Xia Zuoquan
By December 29, other stakeholders had also had their shares unblocked, with a staggering 10,660,130 shares available for trading, accounting for 24.7% of the total issued sharesCalculated at the unblocking day's stock price, this represented a market value of approximately HK$9.733 billion.
The announcement indicated that a lock-up period had ended, which raised apprehensions about shareholder divestmentsThe day after the announcement, December 30, UBTech stock opened with a more than 20% dropBy midday, the drop widened, hitting a record low of HK$61.50 per share, with the stock closing the day at HK$62.45, leading to a total market cap of HK$27 billion.
In response to the turmoil caused by the announcement, UBTech quickly issued a lock-up statement, with Zhou Jian committing voluntarily not to reduce his ownership of 70.40 million H shares within the next 12 months.
Despite his commitment, Zhou Jian's pledge failed to reverse the continuing spiral of UBTech's plummeting stock prices
The impact of the unblocking lingered for several days; by December 31, the stock still recorded a 12% declineIt wasn't until January 5, 2025, when UBTech communicated that CTO and Executive Director Xiong Youjun, along with Executive Director Wang Lin, and personal shareholder Zhao Guoqiun would also commit to not selling any shares for 12 months, that the company’s stock finally displayed a recovery trend.
It was indeed true that several shareholders executed large-scale sell-offs following the uncoupling of the agreement.
The day after the end of the agreement, Minyin Capital announced a divestment, stating that its fully owned subsidiary, YBX, sold 1.7482 million UBTech shares on the open market for approximately HK$138 million, with an average selling price of HK$78.88 per share
Consequently, Minyin Capital ceased holding any UBTech shares, and its divestment had a pronounced impact on UBTech’s market performance.
Indeed, the impact was significantFrom December 27 to January 3, a short span of just four trading days saw the stock price plummet from HK$91.30 per share to HK$46.30, nearing a halving.
Compounding the issue, Tencent followed suit on January 3, selling 9.2895 million shares at an average price of HK$59.3395 for a total cashing-out of HK$551 millionJust a few days later, on January 7, Tencent further reduced its stake by 975.31 shares, averaging at HK$49.5522 per share, reaping another HK$483 million, decreasing its shareholding from 8.05% to a mere 2.08%.
In addition to institutional sell-offs, individual shareholders such as Xia Zuo and Wang Lin also gradually divested their stakes
These moves by shareholders have exerted considerable pressure on UBTech’s stock, challenging investor confidence in the company’s prospects.
After several rounds of financing, UBTech reached a staggering valuation of roughly HK$32 billionYet, post-January 3 market crash, the lowest stock price fell to HK$44.70, pushing the company's market cap down to just HK$19.31 billionAs of the time of writing, UBTech's shares stand at HK$46.95, representing a total market cap of HK$20.265 billion.
The commercialization conundrum lurks as a major hurdle.
One of the most significant challenges facing UBTech is the commercial viability of humanoid robots.
In recent years, the humanoid robotics sector has become a focal point within the tech industry, with notable enterprises like Tesla, Xiaomi, and XPeng diving into robotic development
Simultaneously, emerging start-ups such as Figure AI, Galaxy General, and YuTree Tech have attracted significant attention in primary markets.
According to the report unveiled during the inaugural China Humanoid Robot Industry Conference, the humanoid robot market in China is forecasted to reach 2.76 billion yuan (roughly $432 million) by 2024 and is expected to balloon to 75 billion yuan (about $11.7 billion) by 2029, potentially capturing around 32.7% of the global market.
Despite the fervor, the road to commercialization for humanoid robots faces numerous obstacles.
From a technological standpoint, the general use AI model for humanoid robots remains underdeveloped, with current smart levels and generalization capacities falling short of expectations, limiting their applications in complex and ever-changing scenarios
Additionally, many key component technologies still face significant challenges and bottlenecks.
However, the most pressing issue is the prohibitively high R&D and production costs of humanoid robots, which makes scaling production dauntingThis results in product prices that far exceed what average consumers can afford, thereby limiting the actual market demandCurrently, the primary applications for humanoid robots are still largely relegated to industrial production, scientific research, and niche high-end services, with little traction in the consumer market.
Among UBTech’s notable developments is the Walker robot, a large, humanoid service robot they have developed in-houseAccording to their IPO prospectus, UBTech achieved limited sales, with just one Walker-2 sold in FY2021, and by FY2023, only ten humanoid robots had been sold over two and a half years.
As time has progressed, UBTech has diversified its operations, now encompassing various sectors such as education, logistics, consumer robotics, and tailored industry solutions
Among these, their educational and consumer-level robots remain primary revenue sources, with customized industry solutions following and logistics robots ranking third.
Data indicates that from 2020 through mid-2024, UBTech's revenue was 740 million yuan, 817 million yuan, 1.008 billion yuan, 1.056 billion yuan, and 487 million yuan, respectivelyDuring this period, their net profit stood at -707 million yuan, -920 million yuan, -975 million yuan, -1.234 billion yuan, and -516 million yuan.
Consistent negative net profits have made it increasingly challenging for UBTech to cover its lossesAside from exorbitant R&D expenses, both management and sales costs have risen sharply over the years, with management expenses recorded at 400 million yuan and 215 million yuan for 2023 and the first half of 2024, and sales expenses at 506 million yuan and 234 million yuan in the same periods.
Additionally, post-IPO, UBTech's operational cash flow has shown dire results
Throughout 2023 and the first half of 2024, the net operational cash flow remained negativeAlthough prior to going public, they raised over 6 billion yuan, the company's monetary assets declined to 770 million yuan by mid-2024, and interest-bearing debt climbed to 1.69 billion yuan, with a debt-to-asset ratio of 59.96%. In light of these unfavorable cash flow and debt circumstances, the market's scrutiny on UBTech's commercial development is more pronounced than ever.
Notably, UBTech has been proactive in sending out positive signals this yearRecently, they announced their humanoid robot Walker S has already garnered over 500 pre-orders and anticipate orders between 1,000 to 2,000 units by 2025. On January 5, it was reported that UBTech was the first to embark on humanoid robot training at renowned automotive plants, collaborating with notable car manufacturers like Dongfeng Liuzhou, Geely, FAW-Volkswagen Qingdao, Audi FAW, BYD, BAIC New Energy, and logistics giants such as SF Express.
On the global frontier, Tesla’s Optimus humanoid robot has reportedly begun small-scale production, primarily targeted for use within Tesla’s factories