Chinese robot concept stocks are capturing market attention as investors seek new catalysts following the rally sparked by DeepSeek's AI advances earlier this year. The Solactive China Humanoid Robotics Index has surged approximately 75% over the past year, quadrupling the gains of the CSI 300 Index.
A conference held in Shanghai over the weekend, featuring impressive robot demonstrations and the launch of a humanoid robot priced under $6,000, has become the latest catalyst igniting market sentiment. Supply agreements with industry giants like Tesla (TSLA.US) and BYD continue to drive up shares of their smaller suppliers. A flood of companies entering this high-growth sector has also sparked a capital market boom, including IPO activities.
"It's hard to say which robot companies will be winners. They come and go quickly. However, I think we're still in the early stages of the industry cycle, and we can still participate in this first wave," said David Choa, Head of Greater China Equities at BNP Paribas Asset Management Asia Limited.
According to a Morgan Stanley report from May, the global humanoid robot market is projected to exceed $5 trillion by 2050. In China, the industry is currently at the forefront of development thanks to strong government support. Similar to the DeepSeek boom, part of China's advantage stems from product price competitiveness.
"Given the low prices, the development of China's robot ecosystem will accelerate faster and have greater impact. Of course, when the market becomes large enough, competition will intensify. And we're still in the early stages," said Sun Wei, analyst at Counterpoint Research.
After a brief lull, China's robotics sector is heating up again. The Solactive index rose 3.5% in July, marking its best month since February. Capital market enthusiasm is climbing as investors eagerly await the Shanghai listing of Alibaba-backed Unitree Robotics, known for producing humanoid robots priced below $6,000. Meanwhile, component manufacturers Lens Technology and Zhejiang Sanhua Intelligent Controls saw their stock prices rise following secondary listings in Hong Kong.
Among specific stocks, Chinese humanoid robot manufacturer UBTECH ROBOTICS (09880) has gained over 60% on the Hong Kong stock exchange this year. Swancor Advanced Materials Co.'s A-share price has soared more than 10-fold in the past three weeks after its subsidiary AgiBot secured a majority stake.
Edison Lee, analyst at Jefferies Hong Kong Limited, warns of bubble risks in humanoid robot stocks given technical limitations, high costs, and limited application scenarios. He recommends buying into related supply chain stocks.
"Component companies will benefit first, followed by consolidation among terminal developers. The best component suppliers will also survive, and they will then collaborate with the surviving robot companies," he said in an interview.
As is common with emerging tech companies, profitability remains elusive. UBTECH ROBOTICS is currently still operating at a loss. BNP Paribas Asset Management analyst Choa agrees that component manufacturers will be winners as they can supply to numerous different clients. In the long term, he believes the broader robotics industry will benefit as cheaper end products drive increased robot adoption.
"The cost of humanoid robots is still prohibitively high. But costs will certainly come down, and then various application scenarios will start to emerge," he said.