China's robots fail early market test

Wang Xingxing should have plenty to smile about. After all, Unitree, the humanoid robot maker he founded, is currently ​China's hottest company: its shares rocketed 460% on their Shanghai debut last week.

That catapulted the 36-year-old ‌into the ranks of Alibaba's Jack Ma and other tech billionaires.

So when pictures of Unitree's IPO ceremony featuring a dour-looking Wang went viral, the collective internet had to ask: why is Wang not smiling?

On first glance, China's humanoid robot industry is having ​its moment.

Whereas Elon Musk's Tesla has yet to sell a single droid, Unitree and rivals like ​Agibot are on track to commercially ship 100,000 units this year, according to government estimates. ⁠

That's largely thanks to the country's manufacturing and supply chain prowess, plus generous government support, that have set ​robots onto a similar trajectory as China's electric-vehicle sector.

Yet since Unitree's stock reached its apex on its spectacular debut, ​it has plummeted nearly 30%, erasing roughly $14 billion in market value.

Even so, at its current $36 billion market worth, the company still trades on an eye-watering 400-plus times its annualised forecast first-half earnings, keeping concerns there's a bubble afloat.

One source of unease is technology: China's ​robots still lack the intelligence, reliability or dexterity to complete simple human tasks.

This week's high-profile World Humanoid ​Robot Games held in Beijing, dubbed the Robot Olympics, revealed many shortcomings.

The Tiangon Ultra winning droid, for example, shattered Usain Bolt's ‌100-metre-sprint ⁠human record only to plough into a barrier because it lacked real-world braking abilities; some bots caught on fire while almost all had to be stretchered off, according, opens new tab to the AP.

That's hardly a sign of confidence that they can be deployed into real-world settings.

Unitree admits that so far there are limited commercial applications for its products. Wang himself ​has warned that a breakthrough may ​not come for a ⁠decade.

Until then, demand today is largely propped up by government purchases and subsidies, according to a Reuters analysis.

But already, price wars are intensifying: Unitree cited high research and ​development costs and rising competition for a 53% year-on-year plunge in first-quarter adjusted ​net profit.

Against ⁠this backdrop, despite his paper wealth, Wang has little to smile about.

-Reuters