On September 24, YUNJI (HKEX: 02670) briefly fell more than 15% during intraday trading, hitting a low of HK$6.88 (post-share subdivision), marking yet another record low since its listing. By market close that day, YUNJI closed at HK$7.19 (post-share subdivision), down 11.23%, with a total market capitalization of only approximately HK$5 billion. Compared to its historical high of HK$358.4 (pre-share subdivision) set on May 8 this year, the company's stock price has shrunk by 80%; compared to its IPO price of HK$95.6 (pre-share subdivision), the decline has also reached 25%. This robotics company, which carried the halo of being the "first robot service intelligent agent stock" and saw its Hong Kong public offering oversubscribed 5,657 times at listing, went from being highly sought after to hitting rock bottom in less than a year.
Less Than a Year After Listing, Stock Price Falls from the Clouds
YUNJI listed on the Hong Kong Stock Exchange on October 16, 2025, as an 18C specialist technology company, with an IPO price of HK$95.6, offering 6.9 million H shares globally and raising approximately HK$593 million net. On its first day of trading, the stock opened at HK$142.8, 49.4% above the IPO price, and closed the day at HK$120.5, up 26%. The stock then climbed steadily, reaching a historical high of HK$358.40 on May 8, 2026, corresponding to a total market capitalization of approximately HK$23.9 billion. At that time, market enthusiasm for the embodied AI concept reached its peak, and YUNJI, with its deployment data for hotel-scenario robots and its "World Value Model" technology narrative, commanded a valuation premium far exceeding the industry average.
The turning point came after the interim results were released on August 20. The stock started at around HK$143 that day and declined continuously thereafter. On September 7, YUNJI was officially included in the Stock Connect program, but just two days later it broke below its IPO price, falling nearly 17% to HK$86.40 during intraday trading on September 9. The stock then accelerated its decline, dropping another 16.49% in a single day on September 23 to HK$8.10, and the intraday low of HK$6.88 on September 24 represented a 28% drop from the IPO price.
Revenue Grew 71.6% but Adjusted Losses Widened 246.7%
On the surface, YUNJI's operating performance in the first half was not poor. In the first half of 2026, the company achieved revenue of RMB 188 million, up 71.6% year-on-year; gross profit was RMB 65.8 million, up 47.7% year-on-year. The company attributed this to growth in robot and functional kit sales, development of its AI digitalization system business, and overseas market expansion. But what truly deserves attention is the profit side. In the first half, the loss attributable to equity shareholders of the company was RMB 111 million. Although this narrowed by 22.2% compared to the same period last year, the adjusted net loss reached RMB 108.8 million, widening by 246.7% year-on-year. The huge divergence between these two sets of figures stems from the differing impacts of non-recurring items such as listing expenses, share-based payment expenses, and changes in the book value of redemption liabilities. The sharp expansion of adjusted losses points to a more fundamental problem: in the process of scaling up, the company's various expenses are growing far faster than gross profit. In the first half, R&D investment reached RMB 71.1 million, up 141% year-on-year; selling and marketing expenses reached RMB 48 million, up 21.4% year-on-year. At the same time, the company extended credit periods for certain customers, leading to an increase in impairment losses recognized on trade receivables. The combination of these three expenses completely swallowed the profit improvement space brought by gross profit growth.
The decline in gross margin reveals hidden concerns about profit quality from another dimension. In the first half, the overall gross margin fell from 40.7% in the same period last year to 35.0%, a decrease of 5.7 percentage points. The company explained this as a "strategic adjustment of product mix" — launching a product portfolio targeting hotel scenarios with relatively lower average selling prices and profit margins. This strategy did indeed drive a 93.8% high growth in robot and functional kit revenue in the short term, but the gross margin of hardware sales is naturally lower than that of software subscriptions, meaning the company's revenue structure is shifting from "high-margin software-dominated" to "low-margin hardware-dominated." Specific data from the first half confirms this trend: robot and functional kit revenue was RMB 157.2 million, up 93.8% year-on-year; while AI digitalization system revenue, which represents software service capabilities, was only RMB 30.8 million, up 8.3% year-on-year. The growth rate of the software business lags far behind hardware sales, and this structural change's erosion of the company's long-term profitability cannot be ignored.
Ecosystem Partner Revenue Surges 33-Fold but Business Model Sustainability Remains Questionable
Within YUNJI's revenue structure, one variable deserving special attention is the explosive growth of ecosystem partner revenue. In the first half, ecosystem partner fulfillment revenue jumped to RMB 90.496 million, up 3,302.1% year-on-year, accounting for 48.1% of the group's total revenue. The company explained this as partner-exclusive upper cabin development based on the open capabilities of the UP standardized mobile chassis, significantly lowering the development threshold for cross-scenario products. This growth rate is numerically striking, but its quality needs to be viewed prudently. Nearly 50% of revenue coming from ecosystem partner fulfillment revenue means YUNJI's business model is shifting from "selling robots and services directly to end customers" to "delivering indirectly through partners." This model's pricing power and control are naturally weaker than the direct sales model — ecosystem partner revenue is essentially closer to hardware distribution than software subscription. This may be another structural reason why the company's overall gross margin fell from 40.7% to 35.0%.
At the same time, revenue growth from traditional hotel scenarios has slowed markedly. In the first half, hotel scenario revenue was approximately RMB 83 million, up only about 4% year-on-year, and its share of the company's total revenue dropped from an absolutely dominant position in the same period last year to less than half. Although commercial buildings, technology, and factory scenarios showed impressive growth — factory scenario revenue grew 3,302% year-on-year to RMB 90 million — their base is extremely low, and the deployment costs and operational complexity of these non-standard scenarios are far higher than standardized hotel scenarios. Whether they can replicate the scaled profitability of hotel scenarios has yet to be fully validated.
Early Shareholder Selling and Liquidity Pressure Cannot Be Ignored
Signals at the equity level also warrant caution. According to Hong Kong Stock Exchange disclosure of interests data, on August 26, 2026, shareholder Ying Fuchen reduced 1.2363 million shares, bringing his shareholding to zero; Hefei Industrial Investment Holding Co., Ltd. reduced 5.9172 million shares on the same day; Anhui Artificial Intelligence Industry Investment Development Co., Ltd. also reduced 5.9172 million shares; and Beijing Yunji Angel Management Partnership and Tianjin Yunji Angel No. 1 Partnership each reduced 1.2363 million shares. Multiple early shareholders chose to exit after the lock-up expired, reflecting industrial capital's cautious attitude toward the company's current valuation.
The inclusion in Stock Connect on September 7 was initially seen as positive news, but inflows from Stock Connect funds failed to offset selling pressure. The nearly 17% intraday drop on the day it broke below its IPO price on September 9 already showed that southbound capital holds significantly different views on YUNJI's pricing compared to international placement investors during the IPO period. Combined with the company's current market capitalization of only HK$5.6 billion and average daily turnover of less than HK$10 billion, liquidity fragility may further amplify stock price volatility going forward.
From the 5,657-fold oversubscription at listing to a stock price decline of more than 90% in less than a year, YUNJI's capital market trajectory reflects the complete cycle of the Hong Kong stock market's attitude toward the embodied AI sector, from frenzy to rationality. The company's 71.6% revenue growth in the first half and the increase in HDOS paying customers from 237 to 3,173 demonstrate that its commercialization capabilities are still advancing. But when adjusted losses are expanding at a rate of 246.7%, gross margin continues to decline, and software business growth lags far behind hardware sales, the market's patience with the "embodied AI story" is rapidly wearing thin. Before the conversion efficiency of R&D investment is validated and software subscription revenue becomes the main growth engine, YUNJI needs more solid profitability improvement data to rebuild investor trust.
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