China is slowing down IPOs for humanoid robot firms due to valuation and revenue concerns, while still supporting the robotics sector.
Chinese authorities are tightening regulations on the initial public offerings (IPOs) of humanoid robot manufacturers, driven by worries over inflated company valuations and the quality of their revenue streams. Sources speaking to Reuters indicate that informal guidelines, known as "window guidance," are being used to postpone certain IPOs in the sector.
While no formal ban exists, insiders report that IPOs for these companies are effectively stalled, marking a temporary slowdown in the industry. The China Securities Regulatory Commission has not commented on the situation.
Reports suggest that the regulatory scrutiny was influenced by the stock market volatility surrounding Unitree Robotics, which launched on the STAR Market of the Shanghai Stock Exchange on August 19. The company priced its shares at 150.8 yuan, achieving a market valuation of approximately 61 billion yuan ($9 billion) and raising 6.1 billion yuan ($905 million). Demand from retail investors was overwhelming, exceeding the offering by over 8,000 times.
On its debut, Unitree's shares surged to 845 yuan, a staggering 460% increase from the IPO price, before falling 55% from their peak by September 21. Other companies in the humanoid robotics space, such as Deep Robotics, X Square Robot, and AgiBot, are also preparing for IPOs.
Regulatory Focus on Revenue Sources
Regulators are particularly examining the revenue generated from projects backed by local governments. Reports indicate that some robotics companies benefit significantly from state funding, with government entities covering up to 90% of initial project costs. This raises questions about the sustainability of their revenue, as these projects often provide orders that help meet IPO requirements.
An industry insider warned that excluding revenues from such government-supported initiatives could lead to a 60-70% drop in valuations for some manufacturers. Shao Tianlan, head of Mech-Mind Robotics, has previously expressed concerns that some companies are inflating their earnings through questionable revenue sources.
Continued Support for Robotics Sector
Despite the slowdown in IPO activity, Beijing remains committed to advancing the humanoid robotics sector, viewing embodied AI as a strategic priority. Market analysts note a shift in investor interest from flashy robotic capabilities to tangible implementations and commercial viability.
On August 24, China’s Ministry of Industry and Information Technology released a draft for national standards governing humanoid robots, aiming to develop over 100 key standards by 2028. These standards will cover various aspects including technology, applications, and safety, with participation expected from more than 200 companies.
Overall, Chinese firms continue to raise substantial capital, with mainland companies securing $148.9 billion through stock and convertible securities offerings since the start of 2026, a 59% increase from the previous year, with the tech sector contributing 41% of that total. Furthermore, Morgan Stanley has recently increased its projection for humanoid robot shipments from China in 2026 from 28,000 to 50,000 units.
