China is tightening IPO scrutiny for humanoid robot companies, Reuters reported, citing multiple people familiar with the matter. Regulators have used informal "window guidance" to slow the listing process for some companies and raise the review threshold.
Accounts differ on how far the move has gone. One person said the relevant IPOs are effectively on hold at the moment. Another said there is no formal ban and described it instead as tighter oversight aimed at the sector. The China Securities Regulatory Commission did not respond to a request for comment.
Revenue from data-collection centers is under the microscope
Regulators are focusing on the quality of revenue reported by robot companies. Some firms have secured large orders through local government-backed data-collection centers and joint-venture projects. In some of those projects, local governments were said to have covered 80% to 90% of the initial investment.
Regulators are asking whether that revenue comes from real demand by independent customers or whether it depends mainly on continued support from local projects.
One person close to robot investors estimated that if revenue linked to data-collection centers were stripped out, valuations for some robot companies could drop by 60% to 70%.
Review standards now center on factory adoption and repeatable revenue
Reuters said regulators are now placing more weight on whether robots have actually made their way into factories, whether companies have ongoing orders, and whether their revenue can be generated repeatedly.
Earlier warning signs had already emerged in the sector
The report said warning signs had already appeared. Unitree shares surged more than fivefold at one point on their first trading day, then fell 55% from their peak.
Earlier this month, Mech-Mind CEO Shao Tianlan publicly questioned whether some embodied AI companies were creating unsustainable revenue through data-collection centers and related-party transactions, and named Galaxy General. Galaxy General later denied the allegation.