The humanoid robotics sector has been gaining significant traction, prompting numerous industrial robotics firms to venture into this space and pursue initial public offerings to access capital markets. ROKAE ROBOTICS (ASX: 03752), which recently listed on the Hong Kong Stock Exchange, is one such company.
Founded in 2014, ROKAE ROBOTICS is a leading Chinese industrial and collaborative robotics company, ranking sixth nationally. In recent years, the company has expanded into embodied artificial intelligence, launching humanoid robotic arms and other robot products. By 2025, it held the third position in China's embodied AI robotic arm market.
On July 9th, ROKAE ROBOTICS debuted on the Hong Kong exchange. Its share price experienced volatility, initially rising before falling back, then surging again near the close, ending the day with a market capitalisation of HKD 11.5 billion. The question now is whether the company can leverage this capital market success to build a compelling narrative around its embodied AI ambitions.
Founder Departures and Persistent Losses
Before the humanoid robot boom, domestic robotics companies primarily focused on the more established industrial robotics field, a path ROKAE ROBOTICS initially followed. The company was founded in December 2014 by three university graduates with shared interests: Tuo Hua, Cao Hua, and Han Fengtao, who each held an equal stake.
The company developed its first product-level robot control system in 2016 and subsequently launched various industrial robots. It introduced a lightweight robot platform in 2018 and its first collaborative robot in 2019. These robotic arm-style products remain the core revenue drivers today.
However, the founding team underwent changes as the company grew. Co-founder Cao Hua, who served as CTO, departed in March 2021 to start a new venture in intelligent inspection equipment. In December 2024, amidst IPO preparations, another co-founder, Han Fengtao, also left to co-found an embodied AI and humanoid robot company, which reportedly raised significant funding and achieved a high valuation.
Under the leadership of the remaining founder, Tuo Hua, the company's revenue has grown rapidly. According to its prospectus, revenue increased from RMB 267 million in 2023 to RMB 522 million in 2025.
In 2025, industrial robots contributed 43.1% of total revenue, collaborative robots 26.5%, embodied AI robots 9.0%, and robot solutions 19.2%. By revenue, the company ranks sixth in both China's industrial and collaborative robot markets.
Despite revenue growth, ROKAE ROBOTICS has yet to achieve profitability. Its gross margin improved from 11.4% in 2023 to 21.9% in 2025, aligning with industry averages. However, high sales, R&D, and financing costs led to net losses of RMB 157 million, RMB 192 million, and RMB 179 million from 2023 to 2025, accumulating to a total loss of RMB 529 million over three years. With this track record of losses, can the company's embodied AI focus justify its market valuation?
The Challenge of Its Embodied AI Narrative
The mature and competitive markets for industrial and collaborative robots do not offer a high-growth story. The market enthusiasm for ROKAE ROBOTICS' IPO is largely tied to the hot narrative of embodied AI.
The company's embodied AI product line includes humanoid robotic arms, composite robots, wheeled dual-arm robots, and humanoid robots. Revenue from this segment began in 2021.
In 2023 and 2024, the main product was a composite robot, with sales of 10 and 34 units, respectively. In 2025, the focus shifted to humanoid robotic arms, with sales jumping to 1,190 units, generating RMB 47 million in revenue.
A critical issue is the segment's low gross margin. While the gross margin for embodied AI products was 30.6% in 2024, it plummeted to just 10.7% in 2025 due to the shift towards lower-margin robotic arms. This margin is significantly below the average for machinery manufacturing listed companies and is comparable to basic processing businesses, raising questions about the technological premium of its products.
Currently, ROKAE ROBOTICS' humanoid robotic arms are primarily sold to other humanoid robot companies. It had secured orders for over 10,000 units prior to its IPO filing, with nearly half of China's top ten embodied AI companies reportedly using or testing its arms. This positioning makes the company resemble a component supplier rather than a full-system robotics firm.
Furthermore, robotic arm technology faces lower barriers to entry and intense competition. In 2025, ROKAE ROBOTICS ranked third in China's robotic arm market with a 6.3% share, trailing behind the top two players who held significantly larger shares.
Regarding complete humanoid robots, the company has developed products like the Helios series and the Human.X series. The Helios model is reportedly in mass production and sales, with some IPO proceeds earmarked for its optimization. Details on the Human.X series are scarce in the prospectus, with no mention of mass production plans.
In summary, ROKAE ROBOTICS' current competitive edge in embodied AI stems from its robotic arm expertise, inherited from its industrial robot background. It has not yet established a strong position in complete robot platforms or the crucial "robot brain" AI software, which is becoming the new investment focus in the field. Post-IPO, it remains to be seen whether the company can leverage its capital to accelerate development in these areas and transform from a component supplier into a genuine embodied AI robotics company.
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