Citigroup Maintains Buy on UBTECH: Dense New Product Launches and Rising Humanoid Robot Volumes Are Core Catalysts

Overview

This report is based on Citigroup's June 9 research on UBTECH, focusing on product launches, delivery guidance, model capabilities, and supply chain deployment in China's industrial AI infrastructure and robotics. Citigroup believes that UBTECH is about to release multiple new robot products, including bionic robots, the industrial humanoid robot Walker S3, the new commercial humanoid robot Walker C, and the wheeled Cruzr Y1, which will become important drivers of revenue growth.

Core views

Citigroup's core view is that UBTECH's humanoid robots will become the main growth engine in the next phase, with their revenue contribution expected to rise from about 39% in 2025E to about 69%/78% in 2026E/2027E; Thinker-WM's performance on the LIBERO benchmark is comparable to Nvidia GROOT and Physical Intelligence, demonstrating the company's model development capability; in the short term, the June 30 new product launch could become a stock price catalyst; in the medium term, delivery volume ramp-up and cost reductions will determine whether an earnings inflection point can emerge around 2027.

Analysis framework

The report uses company research notes, product generation comparisons, delivery and revenue guidance, model benchmark performance, supply chain and geopolitical risk analysis, and a P/S valuation framework to assess UBTECH's growth prospects and target price.

Methodology notes

• Valuation methodsP/S

  Price-to-sales valuation for loss-making robotics companies

  As UBTECH remains in a loss-making stage, Citigroup uses a 20x 2026E P/S valuation to derive the HK$190.00 target price, and provides valuation assumptions of 30x for stronger demand and 10x for weaker demand in the scenario chart.

• Product and technology comparisonGeneration hardware comparison

  Walker S3 vs. Walker S2

  The report compares differences between the two generations of humanoid robots in weight, BOM cost, and GPU computing power to assess the new product's cost efficiency and intelligence improvement.

• Operating guidanceDelivery and revenue guidance

  Robot deliveries, revenue growth, and path to breakeven

  The report evaluates the company's revenue growth and breakeven potential based on guidance of 10,000 robot deliveries in 2026, Rmb4.5bn in revenue, and an assumption of 30k-50k humanoid robot deliveries in 2027.

• Model capability assessmentLIBERO benchmark

  Assessment of robot world model and knowledge transfer capabilities

  The report cites LIBERO's evaluation of Thinker-WM and compares it with Nvidia GROOT and Physical Intelligence to illustrate UBTECH's competitiveness in robot model development.

Asset mapping & comparison

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

• UBTECH Robotics (09880.HK)

  Covered company; Citigroup maintains Buy rating

  Strengths

  New product pipeline covers industrial humanoids, commercial humanoids, wheeled robots, and bionic robots; Thinker-WM model capabilities have received benchmark recognition; management has provided 2026 revenue and delivery growth guidance.

  Weaknesses

  The company is still in a loss-making stage, and breakeven is more likely to be delayed until 2027; earnings improvement depends on delivery scale, BOM reduction, and expense control.

  Comparison

  Walker S3 is lighter than S2, has lower BOM, and stronger GPU computing power; Thinker-WM is compared with Nvidia GROOT and Physical Intelligence.

  Risks

  Revenue growth below expectations, humanoid robot development slower than expected, and high R&D expenses or insufficient economies of scale leading to weaker-than-expected profitability.

• MetaX (688802.SS)

  UBTECH joint venture partner; jointly developing edge GPUs for humanoid robots

  Strengths

  Domestic edge GPU deployment helps address potential geopolitical risks and supply chain constraints.

  Weaknesses

  The report does not disclose the joint venture project's mass-production timeline, cost structure, or commercialization revenue contribution.

  Comparison

  This deployment is intended to reduce potential reliance on overseas high-end GPU supply.

  Risks

  Chip performance, adaptation progress, mass-production yield, and geopolitical risks still need to be monitored.

• D-Robotics (unlisted)

  Related party supplying domestic chips for UBTECH's wheeled robots

  Strengths

  Domestic chips are used in wheeled robots, helping strengthen supply chain localization and controllability.

  Weaknesses

  The report does not provide its financial data, supply scale, or detailed technical metrics.

  Comparison

  Together with the humanoid robot GPU joint venture deployment, it forms UBTECH's domestic computing power substitution path.

  Risks

  There is uncertainty around chip performance, supply stability, and robot system integration outcomes.

Key data

• RatingBuyCitigroup maintains a Buy rating on UBTECH.
• Target priceHK$190.00Based on 20x 2026E P/S.
• Current priceHK$112.40Price disclosed in the table, corresponding to an implied upside of approximately 69.0%.
• Market capitalizationHK$56,582mMarket capitalization disclosed in the report table.
• 2026 revenue guidanceRmb4.5bnManagement said 2026 revenue could reach this level driven by new product launches.
• 2026 total robot delivery target10k unitsAbout 5k units from Walker S2, Walker S3, and wheeled robots, and another about 5k units from Walker C and bionic robots.
• 2027 breakeven-related delivery assumption30k-50k humanoid robotsThe report says breakeven is more likely to occur in 2027, depending on a ramp-up in humanoid robot deliveries.
• Walker S3 cost change20%-30% lower BOMCompared with Walker S2, Walker S3 is lighter and lower cost.
• Walker S3 weight change10kg lighterWeight reduction compared with Walker S2.
• Walker S3 computing configurationNvidia Jetson Thor GPU; 2070 FP4 TFLOPSCompared with Walker S2's Jetson AGX Orin 275 TOPS, the report says the intelligence level is improved by about 7.5 times.
• Bionic robot U1 pre-sale3,000 unitsOrders increased to 3,000 units on the eighth day after the pre-sale started.
• Bionic robot U1 degrees of freedom88 DoFMost degrees of freedom are concentrated in the face to provide emotional value.
• Forecast humanoid robot revenue contributionapproximately 69% in 2026E; approximately 78% in 2027EThe report says humanoid robots will rise from about 39% in 2025 to become the company's main growth driver.

Impact & implications

If the new products are launched on schedule and achieve deliveries, UBTECH's revenue mix could shift rapidly toward humanoid robots, while scale effects and lower BOM may help narrow losses. The domestic edge GPU joint venture project and the use of domestic chips in wheeled robots may reduce geopolitical and supply chain uncertainty, but also raise requirements for technology validation and mass-production execution. For the stock price, the June 30 product launch, 2026 delivery pace, and progress toward 2027 breakeven are the main variables to watch.

Risks

• Revenue growth weaker than expected, making it difficult to achieve the 2026 guidance of Rmb4.5bn or the 10,000-unit delivery target.
• Humanoid robot R&D and product iteration slower than expected, affecting the commercialization of new products such as Walker S3 and Walker C.
• High R&D costs or insufficient economies of scale, leading to weaker-than-expected improvement in profitability and cash flow.
• If the June 30 new product launch and pre-sale conversion fall short of market expectations, the short-term stock price catalyst may fail to materialize.
• Domestic edge GPU localization and supply chain substitution still face uncertainty in performance, mass production, adaptation, and geopolitics.

What to watch

• Whether the June 30 product launch will introduce new products such as bionic robots, Walker S3, Walker C, and Cruzr Y1 as scheduled.
• Whether total robot deliveries in 2026 will reach 10,000 units, and the delivery mix across product lines.
• Whether 2026 revenue will approach management's guidance of Rmb4.5bn.
• Whether Walker S3's BOM reduction, weight reduction, and Jetson Thor GPU configuration can translate into order growth and gross margin improvement.
• Thinker-WM's continued performance in robot manipulation and knowledge transfer tasks, and changes in its gap versus solutions such as Nvidia GROOT and Physical Intelligence.
• Whether humanoid robot deliveries can increase to 30k-50k units in 2027 and drive breakeven.
• Progress of the edge GPU joint venture with MetaX (688802.SS), and the application stability of D-Robotics domestic chips in wheeled robots.