Unitree Technology's Q3 revenue up but profit down, robot supply chain performance diverges

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On the evening of October 28, Unitree Robotics (688836.SH) released its first quarterly report after going public: in the third quarter it achieved operating revenue of 665 million yuan, up 69.93% year on year; net profit attributable to shareholders was 113 million yuan, down 17.37% year on year. Net profit attributable to shareholders in the second quarter was 224 million yuan; on that basis, the third quarter fell about 49.7% quarter on quarter.

According to disclosures by Sanhua Intelligent Controls (002050.SZ) and Tuopu Group (601689.SH), their third-quarter net profit attributable to shareholders also fell 9.64% and 4.78% year on year, respectively. Looking only at these three companies, it is easy to jump to the conclusion that "the robotics industry is not profitable."

But once the reports of companies across multiple links such as reducers and motion control are added in, the conclusion has to change: some have profits nearly doubling, some have almost zero growth, and some have higher revenue without higher profit. In this industrial chain, the third-quarter income statements of companies selling complete machines, assemblies, parts, and electronic controls are of differing quality.

The ledger of complete-machine makers

Unitree Robotics is the group with the sharpest contrast in this report card: for the first three quarters as a whole, the company achieved operating revenue of 1.817 billion yuan, up 55.71% year on year; net profit attributable to shareholders was 387 million yuan, up 270.54% year on year.

But in the third quarter the company had higher revenue without higher profit: single-quarter operating revenue was 665 million yuan, up 69.93% year on year; net profit was 113 million yuan, nearly half less than the 224 million yuan in the second quarter.

Broken down, profits were pressed down by three hands at the same time.

The first hand is gross margin. Unitree Robotics' third-quarter sales gross margin was 50.58%, down 8.36 percentage points from the same period last year and down about 4 percentage points from the second quarter; the first-three-quarter gross margin was 54.02%, compared with 59.83% in the same period last year. The product mix extended from quadruped to humanoid and from complete machines to components.

The second hand is R&D. Third-quarter R&D investment was 127 million yuan, up 249.58% year on year, raising its share of operating revenue to 19.10%, an increase of 9.28 percentage points from the same period last year; first-three-quarter R&D investment was 263 million yuan, up 191.48% year on year. The company said in its quarterly report that the funds were mainly directed to model R&D and computing power related to embodied large models, as well as expansion of the R&D team.

The third hand is selling. First-three-quarter selling expenses were 230 million yuan, compared with only 76 million yuan in the same period last year. The company explained in its listing documents that in the first half it carried out brand promotion through platforms such as the CCTV Spring Festival Gala, and together with an increase in sales personnel, this drove a marked rise in selling expenses.

Jiemian News also noted that Unitree Robotics' first-three-quarter net profit attributable to shareholders was 387 million yuan, up 270.54% year on year. The headline growth rate looks impressive, but it is mainly due to a low base effect: in the same period last year, a large one-time share-based payment was recognized, corresponding to administrative expenses of 381 million yuan, while in the first three quarters of this year administrative expenses fell back to 74 million yuan. Net profit excluding non-recurring gains and losses, which reflects the profitability of the main business, was 349 million yuan, down 18.78% year on year.

Cash flow also changed markedly. Unitree Robotics' net cash flow from operating activities in the first three quarters was 194 million yuan, down 54.69% year on year. The company explained this as increases in purchases of goods, payments to employees, and spending on sales and R&D.

The divide between assemblies and parts

The two links adjacent to Unitree present a different picture in their reports.

Sanhua Intelligent Controls achieved first-three-quarter operating revenue of 25.274 billion yuan, up 5.18% year on year; net profit attributable to shareholders was 3.067 billion yuan, down 5.40% year on year. In the third quarter alone, it achieved operating revenue of 8.374 billion yuan, up 7.82% year on year, and net profit attributable to shareholders of 1.023 billion yuan, down 9.64% year on year.

Tuopu Group's first-three-quarter operating revenue was 22.615 billion yuan, up 8.06% year on year; net profit attributable to shareholders was 1.662 billion yuan, down 15.48% year on year. In the third quarter it achieved operating revenue of 8.416 billion yuan, up 5.28% year on year, and net profit attributable to shareholders of 640 million yuan, down 4.78% year on year, but up 35.85% from the second quarter.

The profit declines at these two assembly companies have very little to do with their robotics businesses. According to a person close to Sanhua Intelligent Controls who spoke to Jiemian News, when the company's robotics business can achieve mass supply will still be "subject to customer demand."

At Tuopu Group, actuators and dexterous-hand motors have entered small-batch delivery, but their share of revenue is also very low. Tuopu's announcement mentioned that the first phase of construction of its robotics components industrial base is basically complete; in the first half, the company's three emerging thermal management businesses—liquid-cooled servers, energy storage, and robotics—had combined orders of 1.75 billion yuan.

Moving further down to the parts and electronic controls links, the divergence is even more obvious.

Leisai Intelligent (002979.SZ), whose main business includes core robot components such as joint modules, had first-three-quarter operating revenue of 1.909 billion yuan, up 46.77% year on year; net profit attributable to shareholders was 299 million yuan, up 86.80% year on year. The company's products are mainly used in semiconductors, optical communications equipment, and other fields.

Shuanghuan Driveline (002472.SZ), whose main business includes reducers for industrial and humanoid robots, had first-three-quarter operating revenue of 7.118 billion yuan, up 10.08% year on year; net profit attributable to shareholders was 920 million yuan, up 2.40% year on year. As a leader in RV reducers and gears, its foundation is still automobiles and industrial automation.

Zhongda Leader (002896.SZ), whose main business includes industrial robots, had first-three-quarter operating revenue of 932 million yuan, up 21.88% year on year; net profit attributable to shareholders was 51.9077 million yuan, down 9.27% year on year.

Putting the financial reports of the seven companies together, the divergence across the track is immediately clear: assembly manufacturers (Sanhua Intelligent Controls, Tuopu Group) rely on their mature core businesses to fund their new robotics ventures, component companies (Leadshine Technology and others) are still waiting for large-scale orders to materialize, and complete-machine manufacturers (Unitree Technology) continue to increase R&D investment in embodied intelligence models.

Cash flow data also confirms this divergence: Sanhua Intelligent Controls' operating cash flow in the first three quarters was 3.749 billion yuan, up 22.58% year on year; Tuopu Group's operating cash flow in the first half of the year was 2.596 billion yuan. By contrast, Unitree Technology's operating cash flow fell 54.69% year on year, and the first-half operating cash flows of Leadshine Technology and Leaderdrive (688017.SH) were both negative. Only companies with a stable base in their established core businesses have a better chance of winning over the long investment cycle of the robotics track.

Senior artificial intelligence expert Guo Tao told Jiemian News that humanoid complete-machine companies such as Unitree Technology display typical characteristics of the growth stage: high elasticity on the revenue side, with profit suppressed by proactive investment, forming a sharp divergence from component targets such as Sanhua Intelligent Controls and Tuopu Group. At the industry level, humanoid complete machines are still in the early stage of commercialization validation, and companies are prioritizing the contest for scenario pilots, customer benchmarks, and data accumulation; profit is not the primary goal at this stage. Upstream component manufacturers, relying on batch supply, have stronger profit stability, while complete-machine manufacturers generally show the characteristic of rising revenue without rising profit. This performance structure also shows that the track is still in a period of technology and commercialization investment, short-term profit fluctuations will continue, and the market's pricing focus remains on long-term delivery potential.

Because most companies' robotics business profit bases are currently small and disturbed by R&D and share-based payments, the valuation basis for robotics companies is constantly changing.

Based on Unitree Technology's closing price of 695.90 yuan per share on October 28 and a total market value of 281.5 billion yuan, and simply annualizing Unitree Technology's first-three-quarter revenue of 1.817 billion yuan, the corresponding price-to-sales ratio is about 116 times.

Jiemian News notes that there are also voices from multiple parties arguing that the valuation of humanoid complete-machine companies relies more on long-term volume-price models rather than current-period profit indicators. When will the market's valuation logic for robotics companies switch from "long-term scenario pricing" back to a PE framework centered on profit and cash flow? Is this switching point more likely to occur before industry-wide large-scale shipments or after them?

In response, Guo Tao told Jiemian News that the current use of long-term volume-price models to price the humanoid robot sector essentially reflects that the industry has not yet formed a stable and replicable profit closed loop. The core observation indicators for a valuation switch are concentrated in several directions: the proportion of stable batch repeat orders, stabilization and recovery of per-unit hardware gross margin, continuous cash flow generated by software subscriptions and operations and maintenance services, and unit fixed manufacturing costs diluted below the break-even line as shipments increase.

"In terms of industry rhythm, this switching point is more likely to fall after large-scale shipments," Guo Tao analyzed to Jiemian News. "Before large-scale shipments, orders are mainly pilots and small-batch validation; customers' willingness to pay and scenario versatility have not been fully tested, and volume-price assumptions are easily revised repeatedly. Only when large-scale implementation verifies that per-unit cost, failure rate, and operating efficiency meet customers' economic return standards, and operating cash flow remains positive and predictable on a sustained basis, will the market gradually abandon long-term scenario pricing and shift to a PE valuation framework anchored on profit and cash flow."

(Source: Jiemian News) Middle of the article: embedded advertisement