Huayan Robotics: Leader in Collaborative Robots with Significant Potential in Humanoid Robot Components

Overview

Deutsche Bank initiates coverage on Huayan Robotics with a Buy rating and target price of HK$28.2. The report highlights Huayan Robotics' leading position as the fifth largest global collaborative robot manufacturer and the most profitable robotics company listed in Hong Kong, driven by its advanced component technologies. The report also notes the underappreciated potential of its humanoid robot component business, projecting revenue growth from RMB4 million in 2025 to RMB400 million in 2028, accounting for 28% of group revenue.

Core views

Huayan Robotics' core competitive advantage lies in its advanced component technologies: frameless torque motors achieve 18.7 Nm/kg torque density, 20% higher than international peers; servo drive control frequency reaches 2kHz, significantly exceeding the industry average of 200-500Hz; collaborative robots cover the widest load range (3-60kg) among China's and the world's top five manufacturers. In the collaborative robot market, Huayan Robotics holds 3.5% global market share and 5.1% in China in 2024. It is the most profitable robotics manufacturer listed in Hong Kong, with an adjusted net profit margin of 6.6% in 2025, outperforming peers like Dobot (-10%) and UBTECH (-35%). The humanoid robot component business represents a key growth driver. Channel checks confirm Huayan supplies components to leading domestic humanoid robot manufacturers including EngineAl, AGiBOT, and Galbot. The business is projected to grow from RMB4 million (4% of group) in 2025 to RMB400 million (28% of group) by 2028. Financial forecasts anticipate 55% revenue CAGR from 2025-28E, reaching nearly RMB1.5 billion by 2028; adjusted net profit margin is expected to improve from 6.6% in 2025 to nearly 10% by 2028. Growth will be driven by 40% CAGR in collaborative robots and 89% CAGR in core motion components.

Analysis framework

The report uses a sum-of-the-parts valuation approach, valuing the high-growth humanoid robot component business separately from the more mature collaborative robot segment. The collaborative robot business is valued at 12x 2026 P/S, a discount to Dobot's 15x, reflecting Dobot's humanoid robot manufacturing capabilities (which Huayan lacks) though Huayan is already profitable while Dobot is not. The humanoid robot component valuation assumes Huayan captures 10% share in frameless torque motors and 2.5% in rotary actuators within a projected global market of 1 million humanoid robots by 2030. A DCF model is provided as reference, using a three-stage approach with 12.6% WACC and 3.5% terminal growth rate, consistent with assumptions for Asian automation companies. The report also provides detailed comparisons of Huayan's technical specifications and financial performance against peers, confirming its advantages in precision, load capacity, and profitability.

Methodology notes

• Valuation MethodologySOTP Valuation

  Sum-of-the-parts Valuation

  Separately valuing the high-growth humanoid robot component business and the more mature collaborative robot business with different valuation multiples to better reflect the value of each segment

• Valuation MethodologyDCF

  Discounted Cash Flow Valuation

  Used as reference valuation method with a three-stage model to capture long-term growth opportunities, particularly suitable for evaluating emerging businesses like humanoid robot components

• Company Fundamentals & Financial FrameworkROIC–WACC spread

  Return on Invested Capital vs. Cost of Capital Analysis

  Using 12.6% WACC as discount rate to assess value creation capability, consistent with automation industry assumptions

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Huayan Robotics (1021.HK)

  Direct beneficiary of growing demand for collaborative and humanoid robot components

  Strengths

  Technologically advanced components, strongest profitability among Hong Kong-listed robotics manufacturers, first-mover advantage in humanoid components

  Weaknesses

  Relatively smaller scale vs. global giants, humanoid robot market still in early stages

  Comparison

  Profitable unlike Dobot, with technical specifications leading peers in multiple aspects

  Risks

  Intensifying competition in collaborative robots, slow development of humanoid robot market, macroeconomic headwinds affecting automation demand

Key data

• 2025 RevenueRMB387 millionCollaborative robots 74%, core motion components 26%
• 2025 Adjusted Net ProfitRMB26 millionAdjusted net profit margin 6.6%
• 2025-28E Revenue CAGR55%Projected 2028 revenue near RMB1.5 billion
• Humanoid Component Revenue GrowthRMB4 million in 2025→RMB400 million in 2028Increasing from 4% to 28% of group revenue
• Frameless Torque Motor Torque Density18.7 Nm/kg20% higher than international peers
• Servo Drive Control Frequency2kHzSignificantly exceeds industry average of 200-500Hz

Impact & implications

The report positions Huayan Robotics as uniquely placed in the fast-growing collaborative and humanoid robot markets through its technologically advanced components. Its advantages in precision, load capacity and response speed create significant competitive barriers in industrial automation and emerging humanoid applications. With the global collaborative robot market expanding at 37% CAGR and the humanoid robot market emerging, Huayan stands to benefit from both growth trends.

Risks

• Intensifying competition in collaborative robots leading to price pressure
• Slow development of humanoid robot market
• Macroeconomic headwinds weakening automation demand
• Technology development lag risks
• Intellectual property protection risks
• Customer retention risks
• Supply chain risks

What to watch

• H1 2026 results announcement in August
• Potential inclusion in Stock Connect in early September
• Progress in humanoid robot market development
• Expansion into new end markets like medical equipment