UBTECH Robotics (9880.HK)_ Rerating Just Halfway Through at the Early Stage of Humanoid Robot Era; Raise TP to HK$142

Summary of UBTECH Robotics (9880.HK) Conference Call Company Overview - Company: UBTECH Robotics - Ticker: 9880.HK - Market Cap: US$5.7 billion (HK$44.2 billion) [6][9] Industry Context - Industry: Humanoid Robotics - Key Competitors: Dobot (2432.HK), Figure AI - Market Dynamics: The humanoid robot sector is in its early stages, with significant growth potential anticipated. Core Insights 1. Technology Edge: The launch of the Tiangong Robot is expected to alleviate market concerns regarding UBTECH's technological capabilities, as both Tiangong and UBTECH share R&D resources and investor support from Beijing Yizhuang Investment [1][2] 2. Financial Projections: - 2024/25E net loss estimates reduced by 6%/3% due to better-than-expected performance in the consumer robot segment compared to humanoid robots [1] - Target price raised to HK$142, reflecting a >100$39.5 billion [1][3][12] 4. Sales Forecast: Humanoid robots are projected to contribute 21% and 37% of total revenue in 2025 and 2026, respectively, up from 1% in 2024 [24] Financial Performance - Earnings Summary: - 2022: Net Profit -975 million RMB - 2023: Net Profit -1,234 million RMB - 2024E: Net Profit -948 million RMB - 2025E: Net Profit -786 million RMB - 2026E: Net Profit -330 million RMB [5][10] - Revenue Growth: Expected revenue growth from 1,492 million RMB in 2024E to 2,411 million RMB in 2025E, with a gross profit margin improvement [10] Risks and Challenges 1. Market Risks: Potential for weaker-than-expected revenue growth and slower humanoid robot development [26] 2. Profitability Concerns: Higher R&D costs and challenges in achieving economies of scale could impact profitability [26] 3. Competition: Concerns regarding competition from Tesla's Optimus, although it is believed that Tesla's focus on NEV will limit its market impact [4] Additional Insights - Investment Strategy: Rated as Buy/High Risk, with expectations of significant growth in humanoid robots driving future performance [24] - Lock-up Agreements: Additional 12-month lock-up agreements for executives may reduce selling pressure on the stock [24] Conclusion UBTECH Robotics is positioned in a rapidly evolving industry with significant growth potential, particularly in humanoid robotics. Despite current losses and operational challenges, the company's strategic initiatives and market positioning suggest a promising outlook for investors.