The robotics technology firm Benmo Dynamics has passed the listing hearing for its Hong Kong IPO application. The company, which previously submitted its application confidentially, has now made its prospectus public at this stage.
Meeting the Minimum Threshold for a Hong Kong Listing?
Public information shows the company is a robotics technology firm with direct-drive technology at its core. It primarily sells robot power modules in China, with robot sales as a secondary activity. Revenue is generated from sales of these power modules and robots. Its business model focuses on developing and commercializing advanced robot power modules and robots for consumer, industrial/commercial, and embodied AI application scenarios.
It should be noted that this Hong Kong listing application is being made under Chapter 18C of the Listing Rules. In 2023, the Hong Kong Stock Exchange introduced this chapter, tailored for specialized technology companies. It allows companies that do not meet the basic conditions under Chapter 8 to list in Hong Kong, focusing on strategic emerging industries and hard tech.
Chapter 18C distinguishes between "Commercial Companies" and "Pre-Commercial Companies." A "Commercial Company" is defined as a specialized tech company with audited revenue of no less than HK$250 million in its most recent financial year, while a "Pre-Commercial Company" has revenue below that threshold.
From 2023 to 2025, Benmo Dynamics' revenue was RMB 17.538 million, RMB 79.802 million, and RMB 282 million, respectively. The company's revenue saw explosive growth of 253% in the year preceding the IPO, just meeting the HK$250 million revenue threshold under Chapter 18C.
Valuation Boost from Lenovo and Other Investors? Valuation Soars Over 300% in Under a Year
The company's valuation increased significantly following three funding rounds in 2025. In March 2025, the post-money valuation was RMB 770 million. By May, it had risen to RMB 840 million, and further to RMB 1.2 billion by September. Following the completion of the Series C round in December 2025, the post-money valuation reached RMB 3.185 billion, representing an increase of over 300% since March 2025.
It is important to note that investors in Benmo Dynamics' Series C round included Huatai Digital Intelligence Fund, Rockets Capital, Beijing Cheng Kun, Brizan Ventures VII LP, and Lenovo Capital and Incubator Group, among others. The listed company Broad Ocean Motor appears to have participated as a limited partner. On December 2nd, Broad Ocean Motor announced it had signed a partnership agreement to invest RMB 30 million in a fund, aiming to deepen industrial synergy and explore investments in emerging industries.
Amid this sharp valuation increase, the company reported paper losses. For the reported periods, Benmo Dynamics' net losses were RMB 75.585 million, RMB 93.735 million, and RMB 881 million, respectively. Adjusted net losses were RMB 61.223 million, RMB 61.594 million, and RMB 43.247 million. Changes in the carrying value of redemption liabilities were RMB 12.311 million, RMB 16.791 million, and RMB 770 million, respectively. Why did the carrying value of redemption liabilities change?
According to International Accounting Standard 32 (IAS 32), if investment terms grant investors redemption rights, the investment is classified as a financial liability, not equity, on the issuer's financial statements. Industry insiders explain that if the company's valuation rises, the fair value of the redemption liability also rises, leading to a recognized fair value loss. This is a non-cash, non-operating "paper loss," meaning a higher valuation results in a larger reported loss.
In fact, following the Series C valuation boost, the company's valuation is close to but does not meet the listing standard. Using the central parity rate of 1 HKD = 0.91 CNY as of June 30, 2025, the post-money valuation is approximately HK$3.5 billion.
Under Chapter 18C rules, a Commercial Company must have a market capitalization of at least HK$4 billion at listing, while a Pre-Commercial Company must have a market cap of at least HK$8 billion. Industry sources clarify that the 18C threshold refers to post-offering market cap (issue price multiplied by total shares post-offering), not pre-financing valuation. Although the post-Series C valuation was around HK$3.46 billion, the company could potentially meet the listing standard through a new H-share issuance. By diluting shares and maintaining the issue price through institutional orders during bookbuilding, the "lower limit multiplied by total post-offering shares" could cross the HK$4 billion line.
As the company is still loss-making, a price-to-sales (P/S) ratio is used for valuation. If the future market cap at issuance exceeds HK$4 billion, the corresponding P/S ratio would need to be around 13 times. This raises the question: Is the current valuation reasonable, or is it inflated?
Unfavorable Industry Position? Can High Growth Continue in a Low-Penetration Market?
According to the prospectus, Benmo Dynamics' revenue comes from sales of robot power modules and robots. Its core business model involves developing and commercializing advanced robot power modules and robots for consumer, industrial/commercial, and embodied AI applications.
It should be noted that Hong Kong-listed robot manufacturers like UBTECH Robotics and Dobot currently trade at forward P/S ratios of around 18 to 20 times. However, Benmo Dynamics' robot business is minimal, with revenue under RMB 10 million in 2025, accounting for less than 3% of total revenue. Therefore, it cannot command the valuation premium associated with full robot manufacturers.
Benmo Dynamics' current core business is primarily direct-drive robot power modules, which generated revenue of RMB 248 million in 2025, accounting for 88% of total revenue.
In selecting comparable companies, Benmo Dynamics' CEO Zhang Di has stated that major clients for its direct-drive motor products include Ecovacs and Dreame. Another company, Jinli Transmission, which is also seeking a listing, serves downstream clients like Ecovacs, Roborock, and Dreame but uses a traditional "motor + reducer" solution. It selects Zhaowei Machinery & Electronics as a comparable company. Currently, Hong Kong-listed Zhaowei trades at a P/S ratio of less than 7 times, while Jinli Transmission's P/S ratio is under 3 times.
According to Frost & Sullivan data, based on 2025 revenue, Benmo Dynamics ranked eighth in China's consumer robot power module industry with a 2.4% market share, and first in the Chinese consumer robot direct-drive power module sub-segment (which constitutes 3.9% of the broader market) with a 61.1% share. In China's wheeled/footed robot industry, it ranked fourth with a 4.7% share, and second in the Chinese two-wheeled/footed robot segment with an 18.6% share.
However, the company's current market segment may not be particularly attractive.
On one hand, the core market has low penetration. The market is split by technology into direct-drive and traditional reducer solutions. Direct-drive excels in precision, quiet operation, maintenance-free use, and force control compliance but lags in torque density and low-end cost. It is inherently suitable for light-load, human-proximate, noise-sensitive scenarios (like floor cleaners, collaborative arms, medical robots). Heavy-load, high-impact scenarios (like major axes of industrial robotic arms, humanoid leg/knee/ankle joints) remain the domain of reducers, with RV/harmonic drives being irreplaceable in the short term. In 2025, the global robot power module market reached RMB 110 billion, with traditional modules at RMB 107.9 billion and direct-drive modules at RMB 2 billion. This shows the direct-drive market is significantly smaller, with a penetration rate below 5%.
On the other hand, the company's competitive position within the broader industry may not be strong.
The main players in the Chinese robot power module market are traditional power module companies. Based on 2025 revenue, the top five players accounted for about 45% of the total market share, while the top ten accounted for 58.9%. The remainder of the market remains highly fragmented. In China's consumer robot power module market, Benmo Dynamics ranked eighth by revenue in 2025 with a 2.4% share. The top ten players together held about 47.1% of the market. This indicates a high concentration among the top players, while Benmo's market share is relatively low.
Furthermore, the company's reliance on a single major customer could potentially warrant a valuation discount. Data shows that from 2023 to 2025, revenue from the top five customers accounted for 67.0%, 83.4%, and 85.7% of total revenue, respectively. Revenue from the single largest customer accounted for 22.3%, 62.1%, and 42.8%, respectively, indicating significant dependence on a single client.
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