China scrutinises humanoid robot IPOs as valuations soar, commercial demand questioned: Report

New Delhi [India], September 21 (ANI): Chinese regulators are slowing a rush of humanoid robot companies seeking public listings amid scrutiny over soaring valuations and whether revenues linked to state-backed projects reflect genuine commercial demand, Reuters reported, citing people familiar with the matter.
The slowdown was largely triggered by volatility in shares of Unitree Robotics, a maker of humanoid and quadruped robots, according to the report. Also, the stock surged more than fivefold on its Shanghai debut a month ago but has since fallen 55 per cent from its peak.
“Regulators have used informal “window guidance” to hold back some humanoid-robot listings,” Reuters reported, citing people familiar with the matter. 
At least six Chinese humanoid robotics companies, including Deep Robotics, X Square Robot and AGIBOT, are preparing to launch initial public offerings as per Reuters.
According to the report, humanoid robot IPOs have effectively been put on hold for now, although regulators have not imposed a formal ban. Further, the increased scrutiny reflects Beijing’s attempt to temper investor enthusiasm around one of China’s hottest investment themes while continuing to support humanoid robotics as a “national priority.”

As per the Reuters, the regulators are particularly focusing on ‌whether revenue generated ⁠by the robotics companies through local-government-backed projects can be sustained, according to one person close to humanoid-robot investors.
The report further stated, “robot data-collection centres, where robots are trained, and joint ventures, in which local governments could provide 80% to 90% of initial investment, had generated significant revenue for some companies.”
Such projects can provide orders that support private-market valuations and help companies meet listing thresholds, but regulators are questioning whether they represent demand from independent customers, it said adding “ some robot companies could fall 60% to 70% if revenue associated with data-collection centres were stripped away.”
Reuters reported, citing The Information, China Securities Regulatory Commission (CSRC) recently informally advised some investment banks and investment firms that it was tightening the approval threshold for humanoid robot IPOs.
Leo Wang, a venture capitalist at Qianchuang Capital, described the surge in robotics investment as “campaign-style innovation,” referring to a rush of companies and capital into sectors favoured by government policy.
As per Wang, the “hype around embodied AI had exceeded that seen during China’s internet and new-energy investment waves, with industrial-robot makers pivoting towards humanoids and startups commanding rapidly rising valuations,” Reuters added. (ANI)