China's Unitree Robotics shares surge over 60% in less than two weeks despite industry risks warning

SINGAPORE: Shares of Chinese robot-maker Unitree Robotics have surged more than 60 per cent in less than two weeks amid growing optimism over humanoid robots, even as the company cautioned investors about risks facing the nascent industry.

The Shanghai-listed stock rose 7.7 per cent on Monday (Oct 26), before edging down about 1 per cent in Tuesday morning trading, paring some of its recent gains.

Unitree shares closed at 672 yuan on Monday, up from 405.10 yuan on Oct 15.

Monday's gains came after US investment bank JPMorgan upgraded Unitree to "overweight" from "underweight", a two-step increase that means it now views the firm as likely to outperform expectations, according to financial news site Investing.

JPMorgan also more than tripled its price target for Unitree to 995 yuan from 300 yuan.

JPMorgan's upgrade came after Unitree Robotics founder Wang Xingxing suggested last week that a major breakthrough in physical AI could come as soon as next year, compared with earlier estimates of up to a decade, according to financial news site Investing.com.

UNITREE WARNS OF INDUSTRY RISKS

China has made humanoid robotics a strategic priority as it seeks to become a global leader in the industry.

Chinese firms have drawn global attention with robots capable of running, dancing and performing martial arts, while seeking to expand their use in factories, warehouses and homes.

Morgan Stanley has estimated that China’s humanoid robot market will reach US$2 billion this year and grow to US$15 billion by 2030.

Despite the growing enthusiasm, Unitree has urged investors to exercise caution over the commercial prospects of humanoid robots.

On Oct 21, the company issued a stock exchange disclosure after its stock rose by more than 30 per cent over three trading sessions.

"The humanoid robot industry is still in the early stages of commercialisation, and there are uncertainties regarding technological maturity, the cultivation of downstream market demand, and the supporting capabilities of the industrial chain," it noted.

Unitree urged investors to be mindful of the risks and make rational investment decisions.

The company went public in Shanghai in August, with its shares opening at 629 per cent above its IPO price. Despite the recent rally, the stock remains well below its debut price.

At the time of the listing, Wang said the industry was approaching a "ChatGPT moment" in embodied intelligence. 

He added that the industry was nearing a breakthrough where robots could operate in unfamiliar environments and complete most tasks using simple voice or text instructions.