Even China's IPO gatekeepers succumb to AI fever

Meituan

11/08/2026 04:36

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.
By Robyn Mak
HONG KONG, Aug 11 (Reuters Breakingviews) - Once criticised for their heavy-handed meddling, China's stock market watchdogs now risk letting markets run amok. Robot maker Unitree's 688836.SS $900 million Shanghai offering is 8,000 times oversubscribed by retail investors. Such exuberance for a firm with a triple-digit valuation multiple was once unthinkable in the country's tightly managed onshore IPOs.
Unitree's meteoric rise as China's top humanoid robot maker, riding the AI boom and primed to take on Tesla TSLA.O and Boston Dynamics, has been carefully choreographed. It first gained global fame after its dancing and martial arts-performing machines featured in the 2025 Spring Festival gala, the country's biggest televised event akin to the Super Bowl in the United States. Founder Wang Xingxing's photo-op shaking hands with Chinese President Xi Jinping reinforced a narrative of state support. A shareholder roster akin to a who's who in China tech helps too: Tencent 0700.HK, Alibaba 9988.HK and Meituan 3690.HK are backers, with DeepSeek joining as part of the IPO's strategic placement.
Little wonder retail investors piled in. Almost 10 million placed bids, triggering a so-called clawback mechanism that expanded the retail tranche to just under a quarter of the total offering. The frenzied demand is even more striking given Unitree's valuation. The company expects to generate an adjusted first-half net profit of between 236 million yuan ($35 million) and 283 million yuan this year. At $9 billion, the firm will be valued on a whopping 118 times annualised earnings, per Breakingviews calculations.
That's a huge departure from past debuts, which informally capped valuations at 23 times earnings per share. True, dispensing with outdated and arbitrary ceilings is a positive step toward embracing market forces, even if regulators still choose who gets to list. And arguably, China's conservative IPO valuations are leaving a lot of money on the table: last month memory-chip giant CXMT 688825.SS priced its shares at just 4 times annualised first-half forecast earnings, only for its stock to pop 466% on debut.
But risks are building. Unitree acknowledges that so far there are limited commercial applications for its products; meanwhile, ballooning R&D expenses and competition prompted a 53% year-on-year plunge in first-quarter adjusted net profit. The offering also arrives amid growing global concerns of a tech bubble: South Korea's memory-chip giant SK Hynix 000660.KS, a favoured AI trade, has seen its shares tumble 50% from their July peak. If China's chosen android champion fails to find its footing, Beijing may face greater difficulty drumming up public enthusiasm for its next anointed innovator.
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CONTEXT NEWS
China's Unitree, formally known as Yushu Technology, said in a filing on August 10 that its $900 million Shanghai initial public offering was more than 8,000 times oversubscribed by retail investors.
Retail investors bid for over 53 million shares, compared to the 6.5 million shares allocated. The high demand resulted in the company allocating a total of 9.7 million shares to the deal's retail tranche, or about 24% of the total offering.
Unitree, which will be China's first onshore listed humanoid-robot maker, priced its IPO at 150.80 yuan per share, valuing the company at roughly 61 billion yuan ($9 billion). The company said in its updated prospectus that it expected first-half 2026 net profit to be between 236 million and 283 million yuan. 

(Editing by Hudson Lockett; Production by Ujjaini Dutta)
((For previous columns by the author, Reuters customers can click on MAK/  robyn.mak@thomsonreuters.com))