UBTECH Robotics submits application to Hong Kong Stock Exchange, the first humanoid robot stock is here!

On January 31, according to the Hong Kong Stock Exchange, Shenzhen UBTECH Robotics Co., Ltd. (hereinafter referred to as "UBTECH") submitted an application for listing on the main board of the Hong Kong Stock Exchange, aiming to become the "first humanoid robot " with Guotai Junan International as the exclusive sponsor.

According to the prospectus, UBTECH Robotics was founded in 2012 and is a pilot and leading company in China's artificial intelligence (AI)-enabled robots. It is committed to the innovation of humanoid robots and the research and development (R&D), design, intelligent production, commercialization, sales and marketing of intelligent service robot solutions.

I still remember the first humanoid robot Alpha launched by UBTECH. In the 2016 CCTV Spring Festival Gala, the grand scene of more than 500 Alpha robots dancing together is still unforgettable. Since then, UBTECH's programming educational robot Jimu Robot, humanoid robot Walker, and quadruped robot "Pioneer" have appeared on the Spring Festival Gala one after another. It can be said that it is a star company that promotes the Chinese people's understanding of robots.

Humanoid robots are a special existence in the robotics industry. They are iteratively evolving in the direction of anthropomorphism, including humanoid appearance, perception, decision-making, behavior, and interaction capabilities, etc. Their ultimate goal is naturally to completely replace all kinds of human work and liberate humans from tedious work. Therefore, they are highly anticipated.

However, humanoid robots are a highly integrated field that requires high technology. The hardware must have a flexible body, and the software must have a very intelligent control system. These two aspects have created a high entry threshold for humanoid robots.

The prospectus shows that in order to achieve these human-like functions, UBTECH has deployed core technologies including high-performance servo drives, mechanical transmission, motion planning and control, computer vision and perception, intelligent voice interaction, SLAM and navigation, human-computer interaction and hand-eye coordination, and also launched the robot operating system application framework ROSA.

On this basis, UBTECH launched a series of products including commercial service robots and personal/household service robots, and provided industry solutions such as artificial intelligence education, smart logistics, smart health care, smart epidemic prevention, commercial services, and smart inspections. With intelligent robots as the carrier and artificial intelligence technology as the core, UBTECH has created an intelligent service ecosystem of "hardware + software + service + content".

In 2022, driven by industry giants such as Tesla, humanoid robots have been popular both inside and outside the industry. UBTECH's Walker X, currently the only humanoid robot that can be mass-produced and delivered in the world, has been successfully exported to Saudi Arabia's NEOM New Future City, becoming the first generation of humanoid robot "new citizens". This is also an AI application under Saudi Arabia's "Vision 2030".

Data shows that as of the third quarter of last year, UBTECH has served more than 50 countries and regions around the world, has nearly 1,000 corporate customers, has sold a total of 500,000 robots, and owns more than 1,500 robot and artificial intelligence-related patents, of which more than 300 are overseas patents.

According to the data disclosed in the prospectus, UBTECH has not yet achieved profitability and its losses are showing a trend of expanding.

In 2020, 2021 and the first three quarters of 2022, UBTECH achieved operating income of approximately RMB 740 million, RMB 817 million and RMB 529 million, respectively, and net profit of approximately RMB -707 million, RMB -918 million and RMB -778 million, respectively.

In the first three quarters of 2021, UBTECH suffered a net loss of 607 million yuan, while in the first three quarters of 2022, the loss reached 778 million yuan. It is obvious that the loss is increasing, and it can also be seen from the annual net profit that the loss is on the rise.

The main reason for the widening losses is that intelligent robots are still in the early stages and require huge R&D investment. The prospectus shows that from 2020 to the third quarter of 2022, UBTECH's R&D expenditure was 429 million yuan, 517 million yuan, and 325 million yuan, accounting for 57.9%, 63.3%, and 61.4% of the total revenue in the corresponding periods, respectively. It is understood that more than half of UBTECH's employees are currently R&D personnel.

Some industry insiders said that intelligent robot technology spans multiple fields, and the technical research and development is difficult and requires high R&D investment. In order to ensure continued core competitiveness, companies usually need to continuously invest in R&D funds, and net profit losses are also the norm in the current market.

Looking at the current humanoid robot industry, profitability is still a chasm that is difficult to cross. Whether it is Japan's Asimo or Boston Dynamics' Atlas, they all face problems with application scenarios, technology and costs, and are still a certain distance away from commercialization. Therefore, the situation of humanoid robots in the capital market is somewhat ambiguous. On the one hand, people are looking forward to its future prospects, but on the other hand, it is difficult to grasp the time for commercial application.

In fact, this is not the first time that UBTECH has applied for listing. According to statistics, from July 2019 to November 2020, CICC submitted progress reports on UBTECH's listing guidance to the Shenzhen Securities Regulatory Bureau six times, but finally terminated its guidance work for UBTECH; in April 2021, UBTECH again submitted a guidance filing to the Shenzhen Securities Regulatory Bureau to restart its A-share IPO, but no good news came in the end. UBTECH's IPO road can be described as bumpy. I don't know what the result of this listing will be. I believe that after two years of accumulation, the confidence will be much greater. I look forward to the day when humanoid robots come into our lives.