Leader's harmonic drive: Humanoid robot demand is warming, but valuation has already priced in a bull case

Overview

This report is based on an investor call with Goldman Sachs and LeaderDrive company secretary held on July 3, 2026, discussing China humanoid robot demand, harmonic drive supply, capacity expansion, price trends, overseas customer progress, and valuation sensitivity. Goldman Sachs maintains a Neutral rating on LeaderDrive, recognizing the company’s leading position in the domestic harmonic drive market and its long-term application opportunity, but emphasizing that the current stock price already strongly reflects long-term bullish expectations.

Core views

Key views include: first, warehousing, logistics, sorting, supermarket packaging, and shelf-stocking vertical scenarios are likely to be commercialized first, pushing China humanoid robot shipments above 50,000 units in 2026; second, if EV-subsidy-like policy support is introduced in 2026, industry shipments in 2027 could approach 200,000 units; third, LeaderDrive’s domestic share in humanoid robot harmonic drives has risen to 80%-90%, current capacity is fully loaded and pricing is relatively stable; fourth, the company is expanding capacity quickly, but current 2026E/2027E P/E multiples of 411x/276x indicate the market has already priced in a relatively bullish long-term outlook.

Analysis framework

The report applies a combination of company call minutes, industry shipment scenarios, capacity ramp paths, ASP assumptions, profitability, and discounted valuation analysis, with a focus on testing sensitivity of equity value to 2030-related humanoid robot product shipments and unit prices.

Methodology notes

• Valuation methods2030E P/E Discounted Valuation

  The target price is based on a 2030E P/E of 45x and discounted back to 2027E using an 11.5% cost of equity.

  Goldman Sachs’ 12-month target price of Rmb138.0 is based on key assumptions including 25% net margin for humanoid-related business, 2030E exit P/E of 45x, and an 11.5% cost of equity.

• Scenario analysisShipment and ASP Sensitivity Analysis

  Implied equity value is calculated with 2030E shipments of 2 million to 10 million units and ASP of Rmb700 to Rmb2,500.

  Sensitivity results show an implied upside/downside range versus the current stock price of -67% to 147%, suggesting the current market may already be pricing a bull case.

• Factor frameworkGS Factor Profile

  Compares the stock’s attributes relative to the market and sector peers across growth, financial returns, valuation multiples, and composite percentiles.

  The report states that Goldman Sachs’ factor framework uses sales, EBITDA, and EPS growth, as well as ROE, ROCE, CROCI, and P/E, P/B, EV/EBITDA to form standardized percentiles.

Asset mapping & comparison

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

• Leader Harmonious Drive Systems Co. (688017.SS)

  Research target; China’s leading harmonic drive player benefiting from humanoid and industrial robot demand.

  Strengths

  High domestic share in Chinese humanoid robot harmonic drives, fully loaded capacity, and greater reliance on high-quality suppliers as customers move from R&D into early commercialization; progress has been made with small-volume shipments or testing with international industrial robot brands.

  Weaknesses

  Valuation is very high, with long-term growth expectations already heavily embedded in the stock price; capacity expansion is still affected by high-end equipment lead times, manufacturing experience, and demand rhythm.

  Comparison

  The company says its quality is close to global peers but with more competitive pricing, and it has made progress in cooperation with international robot brands such as Yaskawa, ABB, and Fanuc.

  Risks

  Slower-than-expected humanoid robot mass production, delayed execution of large overseas anchor orders, weaker-than-expected domestic industrial/collaborative robot demand, and intensified competition at home and abroad.

• SKF (SKFb.ST)

  Planned to set up a joint venture with LeaderDrive in China, with SKF holding 60% and LeaderDrive holding 40%.

  Strengths

  Can provide crossed roller bearings, cam followers, deep-groove ball bearings, and leverage a global sales network to serve customers in China and overseas.

  Weaknesses

  The JV is expected to begin operations by end-2026, and short-term contribution to revenue and order pace still need to be verified.

  Comparison

  The partnership helps LeaderDrive strengthen international supply chain and manufacturing capability in high-precision drivetrain components for humanoid robots.

  Risks

  There are uncertainties around JV execution, customer onboarding, product reliability, and the speed of cost reduction.

Key data

• 12-month target priceRmb138.00Goldman Sachs target price; current price Rmb488.00; implied downside 71.7%.
• Current stock performance+154% YTDThe report states the stock is up 154% year-to-date, with a 12-month absolute gain of 306.3%.
• 2026E/2027E valuation411x / 276x P/ECorresponds to Goldman Sachs' projected 2026E/2027E valuation multiples.
• China humanoid robots 2026E shipmentsAbove 50k units; Goldman Sachs base case 51k unitsManagement said commercialized vertical applications could push shipments above 50,000 units.
• China humanoid robots 2027E shipment scenarios76k / 148k / 220kGoldman Sachs base case, bull case, and blue-sky case; the company said shipments could approach 200k if policy stimulus is implemented.
• Domestic humanoid robot harmonic drive share80%-90%Estimated by management, up from about 70% in 2025.
• 2026 year-end capacity targetAnnualized 1.44mn unitsMonthly capacity target is 120k units; 2025 year-end was 600k-700k units.
• Long-term capacity visionAnnualized 10mn unitsThe actual ramp depends on demand growth, domestic substitution of high-end equipment, and manufacturing process improvements.
• 2026E revenue/EPSRmb896.4mn / Rmb1.14Goldman Sachs forecasts revenue growth of 57.1% YoY and EPS growth of 68.0% YoY.
• 2027E revenue/EPSRmb1,196.5mn / Rmb1.67Goldman Sachs forecasts revenue growth of 33.5% YoY and EPS growth of 46.4% YoY.

Impact & implications

The implication for the industrial chain is that early commercialization of humanoid robots may first occur in low-precision but high-repetition vertical scenarios, and core component suppliers such as harmonic drive providers could become a short-term constraint. For the stock, the fundamentals benefit from high share, full utilization, stable pricing, and expansion, but current valuation is highly sensitive to longer-term shipments and ASP. If policy, orders, or overseas customer progress fall short of expectations, the stock could experience a significant correction.

Risks

• Upside risk: Humanoid robots move to mass production and technical progress faster than expected.
• Upside risk: The company enters key robot customers more quickly, especially overseas brands.
• Downside risk: Domestic industrial and collaborative robot demand is weaker than expected.
• Downside risk: Competitive pressure intensifies from domestic and foreign brands.
• Downside risk: Current valuation already reflects relatively bullish long-term shipment and ASP assumptions; if order execution or policy stimulus does not materialize, the stock may face pressure.

What to watch

• Whether China introduces humanoid robot industrial policy in 2026 similar to EV subsidies.
• Whether harmonic drive monthly capacity reaches 120k units (annualized 1.44 million units) by the end of 2026.
• Whether domestic humanoid robot commercialization scenarios expand beyond vertical applications such as warehousing, logistics, and supermarkets.
• Whether U.S. customers move from forecasted interest to clear large-scale orders.
• Operational progress, product supply, and overseas customer expansion of the SKF joint venture after end-2026.
• Whether ASP remains stable under near-term tight supply, or resumes downward pressure under longer-term competitive strategies.