[Beijing = E-Daily Lee Myeongcheol Correspondent] Following the initial public offering (IPO) of Unitree, a leading Chinese humanoid robot company, local robotics firms have been lining up to file for IPOs. However, news of subsequent companies going public has been scarce. This appears to be because IPO reviews have become more stringent than before, while the clear break-even point for robotics companies remains unclear.

On the 15th, the Chinese economic media outlet DiCaijing reported, citing multiple investment banking (IB) sources, that “amid current strict IPO quality control measures, the quality of companies planning humanoid robot IPOs is drawing attention.”

Recently, there have been reports within China’s financial investment industry that listing reviews for humanoid robot companies are being tightened.

The Wall Street Journal (WSJ) recently reported that the China Securities Regulatory Commission (CSRC) held informal meetings with some investment banks and institutional investors, recommending that high standards be applied to humanoid robot companies seeking to go public. These high standards include sound financial health, promising revenue prospects, and valuable technological innovations.

An executive at an investment bank in Hebei Province explained to Di Yi Cai Jing, “Rather than the standards having been tightened, the tone has been consistent all along; amid stricter IPO quality control, there is now a greater focus on the quality of companies planning humanoid robot IPOs.”

Although Chinese financial authorities have not directly tightened the IPO review criteria for robotics companies, it appears they have informally instructed regulators to scrutinize companies’ operational conditions more closely.

Some view Unitree’s listing as the reason behind the stricter IPO criteria for robotics companies. On the 19th of last month, Unitree listed on the STAR Market (a market dedicated to technology stocks) of the Shanghai Stock Exchange; on its first day of trading, its stock price surged by approximately 460% compared to the offering price, pushing its market capitalization to 341.8 billion yuan. However, as of today—just over a month later—its market capitalization has plummeted by 43% to 192.9 billion yuan. While some have even raised concerns about a “robot bubble,” this development has prompted calls to closely scrutinize the fundamental health of robotics companies.

According to China’s financial investment industry, companies such as Leju Robotics, Yuxianchu Tech (Deep Robotics), and Weizhang Keji (Dubot) are preparing for listings on the mainland stock market. However, Leju Robotics and Yuxianchu Tech have made no progress since the IPO inquiry stage in May, while Weizhang Keji passed the review committee on July 22 but has not yet submitted its IPO documents.

Ultimately, the weakness of these companies lies in their financial performance. In the case of Leju Robotics, net losses over the past three years have widened from approximately 41.12 million yuan (about 8.3 billion won) to 69.78 million yuan (about 14.1 billion won). Dubot has also yet to turn a profit, with last year’s net loss reaching 83.54 million yuan (about 16.9 billion won).

Yunxianchu Tech reported that while it barely turned a net profit (28.68 million yuan) last year, its gross profit margin has been declining somewhat this year. This deterioration in the profit-and-loss structure is due to heavy investment in research and development (R&D) before the business has fully gained traction.

Investment bank officials explained, “As IPO applications from unprofitable robotics companies increase, the number of substandard cases may also rise simultaneously, and this is precisely when quality control must be strictly strengthened,” adding, “It is inappropriate to go public in the capital market when the business model is not yet mature and the profit outlook remains unclear.”

The Hong Kong stock market is viewed as another gateway for unprofitable robotics companies. According to local media, 51 robotics companies have applied for or plan to apply for an IPO in Hong Kong within this year. Companies such as Ziyuan (AjiBot), a general-purpose humanoid robot manufacturer, and Inhetongyong (GalBot) are preparing to raise funds through IPOs.

The reason early-stage companies are flocking to the Hong Kong stock market is the 18C regulation, which allows special-purpose companies to pursue a listing even without prior revenue.

However, the possibility cannot be ruled out that Chinese authorities will take specific measures to prevent a situation where companies with widening losses go public on a large scale, leading to financial instability. Di Yicheng analyzed, “The tightening of IPO reviews is not aimed solely at humanoid robot companies but also relates to all unprofitable companies,” adding, “The authorities are attempting to manage quality at the IPO application stage.”