On January 24, 2024, a notable surge of 26.12% in the stock price of UBTECH, the world's first publicly traded humanoid robot company, sent ripples through the market, culminating in a total market capitalization of 32.09 billion Hong Kong dollarsThis rally was significantly buoyed by strategic announcements including the QM25 fund's commitment to a 12-month lock-up on their UBTECH shares, aimed at stabilizing investor confidencePrior to this, on January 19, the company had revealed a plan to repurchase up to 200 million yuan worth of shares as part of a broader employee incentive strategy.

Encouraged by positive developments, UBTECH has been on an upward trajectory since mid-January, clawing its way back to a market valuation over 30 billion Hong Kong dollars.

Once hailed as a Chinese tech star, UBTECH's market equity reached an astonishing high of over 133 billion Hong Kong dollars at its zenithHowever, a series of market pressures had led to a massive loss in value, with its capitalization diminishing by over 100 billion Hong Kong dollars amid a turbulent investment landscape.

Tracing the significant fluctuations in UBTECH's valuation, from its soaring heights to the crushing lows and then a steady resurgence, one must wonder about the critical events that propelled this dramatic journey.

The founder of UBTECH, Zhou Jian, has often self-identified as more emotional than rationalThis trait has likely fueled his enduring persistence through the trials of entrepreneurship, ultimately giving rise to UBTECH, now recognized as a pioneering "unicorn."

After graduating from university, Zhou Jian started his career at a German companyUpon returning to China, he ventured into entrepreneurship by establishing a factory, which achieved revenues in the tens of millions as early as 2007, enabling him to comfortably purchase a home and a car.

The seeds for UBTECH were sown in 2009 during an international trade fair where Zhou first encountered a small humanoid robot, igniting a passion that would lead to the founding of his company in March 2012.

However, the initial days of the startup were fraught with challenges and heartache

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Zhou described these times as painful and anxiety-inducing, with a complete lack of security concerning the future of his endeavor.

In an industry where humanoid robotics was consider relatively obscure, venture capitalists were hesitant to pour funds into such a niche field, leaving Zhou in a precarious financial situation, often having to self-fund the company's operations.

In desperate straits, Zhou borrowed over 900,000 yuan from his father and even resorted to selling three of his propertiesAt the lowest point, he had just a few thousand yuan in his pocket, leaving him unable to even cover dental expenses for his mother.

To cut costs on rent, Zhou moved his office from near Hong Kong Polytechnic University to LonggangAlthough his parents suggested he seek traditional employment, he chose to continue his entrepreneurial journey.

A pivotal moment arrived in the summer of 2013 when Zhou presented UBTECH’s innovations at the China International High-Tech Achievements Fair, where he caught the attention of BYD's co-founder, Xia Zuquan.

Dressed casually in shorts, Zhou impressed with his presentation skills, ultimately clinching investment interest from Xia, who identified potential where others hesitated.

By 2014, during a critical financial juncture for UBTECH, Xia lent Zhou some funds, bolstered by contributions from Xia’s associates who were also keen to invest.

The real turning point came in 2015 when global tech giant Google began acquiring robot startups, igniting a frenzy of interest that swept across China, leading elite venture capitalists to seek out similar investments.

Despite his struggles with articulating a business model, Zhou’s profound understanding of humanoid robotics allowed him to resonate with investors, advocating for a co-existent future for humans and robots.

Through successive rounds of funding, UBTECH skyrocketed from a valuation of $100 million to $300 million and then to $1 billion, joining the elite club of unicorns within just five years.

On December 29, 2023, Zhou successfully led UBTECH to a remarkable entrance into the capital market via a listing on the Hong Kong Stock Exchange

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The achievements continued into 2024, with UBTECH named among the top 50 Chinese tech companies by Fortune.

Why does UBTECH attract so much attention? The potential of the humanoid robotics industry plays a significant role in elevating companies to the forefront of public interest.

Market forecasts suggest that by 2035, the humanoid robotics sector could expand to a staggering 154 billion USD, equivalent to 11.2 trillion yuan.

Zhou makes an even bolder prediction compared to industry mogul Elon Musk; he anticipates a global demand for humanoid robots ranging between 20 billion to 30 billion units, while Musk's estimate stands at 10 billion.

Nonetheless, even as a darling of this burgeoning trillion-dollar market, UBTECH grapples with a myriad of challenges. 

Historically, many high-profile companies have experienced downturnsAfter reaching dizzying heights, UBTECH saw its market capitalization plummet significantly.

Since late March 2024, UBTECH entered a phase of volatility and declineBy January 24, the stock price had fallen to 74.35 Hong Kong dollars, below the initial public offering price of 90 Hong Kong dollarsOverall, over 100 billion Hong Kong dollars of market value evaporated compared to its peak.

Factors contributing to the declining stock price largely relate to market apprehensionsOn December 30, 2024, UBTECH's stock plummeted by 31.6% amid concerns that the lock-up period for major shareholders had expired.

In addition, the secondary market is keenly observing when UBTECH might pivot towards profitability.

Data indicates that over a period of four and a half years, UBTECH has incurred a staggering net loss of over 4 billion yuan attributable to the parent company.

Breaking down the losses, from 2020 to 2023, the losses were recorded at 707 million yuan, 920 million yuan, 974.8 million yuan, and 1.234 billion yuan respectively, with an additional loss of 516.4 million yuan reported in the first half of 2024.

The most significant hurdle to mass production and commercial deployment of humanoid robots lies in the high cost

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This is primarily due to an immature supply chain and the need for custom-made components, which limits outputHowever, Zhou is optimistic that once commercial production hits a critical mass, costs will naturally decrease.

Another challenge hindering the commercial viability of humanoid robots is the limited data currently available, necessitating advancements in software algorithms to enhance their autonomous capabilities and broaden application scenariosToday's technology still requires improvements to increase the dexterity needed for complex tasks.

In an analyst report from August 2024, Jiayin International Securities noted that while humanoid robots now typically handle relatively standardized and simplistic test tasks, the industry is poised to branch into broader commercial services and domestic care as operational tasks and training data accumulate.

Competition in the humanoid robotics sector is visibly intensifying.

In China, beyond UBTECH, notable players like Xiaomi, Zhiyuan Robotics, and others have entered the humanoid robotics raceInternationally, UK-based Engineered Arts leads the pack, while Tesla and 1X Technologies from the US are also strong contendersFurthermore, tech titans like Amazon and Nvidia have also begun making their mark in the humanoid robotics landscape.

Against this backdrop, how can UBTECH navigate the competitive landscape?

UBTECH primarily focuses on three application scenarios: industrial manufacturing, commercial services, and home companionshipIts unique edge lies in being one of the few companies globally capable of mass-producing both low and high torque servosTheir self-developed humanoid robot, Walker, represents China’s first commercially available, life-sized bipedal humanoid robot.

Currently, UBTECH is vigorously advancing the application of humanoid robots within industrial contexts and is continuously expanding its network of partnerships

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