Unitree Robotics went public through the traditional route, with a current float of just 30.09 million shares against a total share count of 404 million. This scarcity has created the perfect conditions for speculative trading. Priced at 150.80 yuan per share, the diluted price-to-earnings ratio stood at 219.23 times at listing; after the initial frenzy subsided and the price corrected, the P/E ratio still hovers above 400 times, indicating a severe valuation bubble.
The central authorities are calling for the development of high technology and breakthroughs in core technologies, but this does not justify concept-driven speculation or the artificial creation of valuation bubbles. Only when stock supply and demand are balanced can prices reflect true value and the market achieve stable, long-term growth. Since Unitree Robotics has attracted such strong demand, the company could have offered a portion of its existing shares to new investors during the IPO, or issued 100 million new shares to the public. The current approach effectively creates a pent-up overhang of selling pressure.
This "issue 1, hold 9" system, a 1:9 issuance structure, is no longer suited to today's market environment. In the 1990s, major shareholders and company founders were reluctant to part with their equity or share the fruits of growth with new investors, leading to this design. But times have changed, and the pricing logic across primary and secondary markets has shifted. This outdated structure only fuels new stock speculation. Moreover, the large accumulation of locked-up shares becomes "passively overvalued" due to artificially high IPO prices, intensifying the urge to sell once the lock-up period expires. Combined with excessively large stakes held by original shareholders, the result is a highly concentrated ownership structure that severely imbalances the interests of secondary market investors against those of locked-up shareholders.
During Xiao Gang's tenure as chairman of the China Securities Regulatory Commission, a model was designed and implemented requiring original major shareholders to sell part of their holdings at the time of IPO. The rationale then was to expand supply and curb speculation, but the measure was exploited by traders and subsequently discontinued. From the perspective of balancing stock supply, appropriately diversifying ownership, and curbing speculation, reintroducing a system for selling existing shares during IPOs should be put on the agenda.
Diversified shareholding is the fundamental form a listed company should take. If ownership remains highly concentrated after listing, with family control and insider dominance persisting, governance cannot be balanced, and the interests of minority shareholders will never be adequately protected. A listed company is called a "public company" because its essence lies in shareholder equality. When equity is overly concentrated in the hands of a few major shareholders, true equality at the share level is impossible. Consequently, in decision-making, operations, profit distribution, interest negotiation, supervision, and information disclosure, genuine marketization and rule-of-law principles cannot be achieved. This in turn distorts pricing in both primary and secondary markets, allowing various forms of improper arbitrage to become chronic problems.
This is the root cause of China's stock market lingering at low levels for extended periods, experiencing violent swings at the slightest disturbance, and lacking patient capital. My earlier criticism of Yi Huiman's large-scale, low-quality listings, which severely damaged the market ecology and deviated from the central authorities' policies and major decisions on capital market development, was fundamentally aimed at maintaining a balance of interests across all market participants. Overpriced IPO valuations, speculation in new listings, and the imbalance between floating and locked-up shares are the underlying contradictions of our stock market, and they must be resolved. Slowing the pace of issuance can only reduce the flow of new problems, but it does not address the fermentation of existing issues.
Therefore, I once again solemnly call for reforming the IPO system and properly fastening the first button of China's stock market system. It is time to abandon the old game of "small new stock floats, high prices, and fat profits for original shareholders."
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