China robot maker Unitree’s shares slump 45% after fivefold IPO surge, sparking bubble fears in sector

Unitree, a leading Chinese humanoid robot manufacturer, saw its shares plummet by 45% following a massive fivefold jump on its Shanghai debut. This sharp decline has sparked concerns over potential market bubbles, losses for retail investors, and flaws in China's IPO system. The company's valuation surged to US$66 billion at one point before dropping by US$30 billion.

The rapid rise and fall in Unitree's stock value have raised questions about whether the enthusiasm for AI and robotics has outpaced the underlying fundamentals. Analysts suggest that China's listing mechanism might be distorting prices, and there are fears of a market frenzy that could harm strategic industries. Unitree's initial public offering (IPO) was expected to set the tone for other Chinese tech companies eyeing IPO opportunities.

However, the rapid growth of the sector, driven by the country's "self-sufficiency" drive, has led to a frenzy among investors. The company's first-half profit showed signs of a decline, with adjusted net profit falling 53% to 40 million yuan (US$5.95 million) in the first three months of 2026. Unitree's debut performance was not driven by a strong business case but by investors looking to capitalize on the perceived state support and government backing for the listing.

The IPO saw shares of Unitree soar by 460% on the first day, compared to an average first-day gain of 226% for newly listed stocks in China over the past three years. The fast-tracked listing on Shanghai's tech-focused Star Market also signaled government approval, as the board is reserved for hard-tech innovators in strategic industries.

Despite this, only 21 companies went public in Shanghai during the first seven months of 2026, compared to 104 in Hong Kong. The IPOs of companies like Unitree and DRAM memory chipmaker CXMT were chased by investors due to a lack of promising options in China's stock market. However, regulators' tight scrutiny means only a limited number of companies are allowed to go public, limiting bankers' ability to respond to the high demand.