Luoshi Robotics has recently updated its prospectus in preparation for listing on the Hong Kong Stock Exchange. This company, founded exactly ten years ago, specializes in industrial robots, collaborative robots, and humanoid robots, serving various sectors including industry, commerce, and healthcare.
According to the prospectus, the company’s revenue is projected to increase from 267 million yuan in 2023 to 522 million yuan in 2025, nearly doubling in two years. Gross profit is also expected to rise from 30.57 million yuan to 114 million yuan, with the gross profit margin improving from 11.4% to 21.9%, remaining stable at this level in 2024 and 2025. Furthermore, losses have narrowed, decreasing from 192 million yuan to 179 million yuan, while the adjusted net loss fell from 101 million yuan to 41.67 million yuan.
While the revenue growth and gross margin improvement look promising, a key question arises: what does this scale represent in the industrial robotics industry? For instance, Estun reported revenues exceeding 4 billion yuan in the first three quarters of 2025, and Siasun also surpassed 3 billion yuan. With Luoshi’s expected revenue of 500 million yuan, it remains a relatively small player in this competitive landscape.
Another concern is the company’s cash reserves. By the end of 2025, Luoshi is projected to have only 14.8 million yuan in cash and cash equivalents. For a company with annual revenues of 500 million yuan, this low cash balance suggests that any financial turbulence could severely impact its cash flow. The prospectus notes that Luoshi is still operating at a loss, and ongoing investments in research and development, as well as market expansion, will require substantial cash outflow. Although the prospectus does not disclose specific R&D spending, industry averages indicate that industrial robot companies typically allocate 10%-15% of their revenue to R&D. Based on this ratio, Luoshi would need to invest tens of millions annually in R&D, placing additional pressure on its cash flow.
On a positive note, Luoshi boasts an impressive list of shareholders. The National Manufacturing Transformation and Upgrade Fund owns 9.67%, Southern Hope holds 6.96%, Xianghe Fund has 5.88%, and Meihua Venture Capital owns 4.94%, along with investments from Shenzhen Capital Group. These institutions are betting on Luoshi’s technological advancements and the industry’s potential, despite its current losses.
Luoshi focuses on industrial and collaborative robots, sectors where domestic alternatives are still gaining traction. The industrial robot market has long been dominated by four major players: Fanuc, ABB, Yaskawa, and KUKA. Domestic manufacturers are capturing market share through competitive pricing and customized services. The collaborative robot segment is experiencing faster growth, expanding its applications from industrial production lines to commercial and healthcare settings. Luoshi’s flexible collaborative robot products are considered differentiated within this niche. However, the competition is intense, with established companies like Estun, Siasun, and Effort ramping up production capacities, alongside startups like Yuejiang and Jieka entering the market. While Luoshi has strengths in technology and product definition, its smaller scale and tight cash flow raise concerns about its ability to reach profitability.
The improvement in gross profit margin from 11.4% to 21.9% is significant, indicating that Luoshi’s products are starting to command a premium and are no longer merely competing on price. However, a 21.9% gross profit margin is still below the industry standard, as Estun has consistently maintained margins above 30%. Luoshi has further progress to make to enhance its profitability.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/luo-stone-robotics-seeks-hong-kong-ipo-with-doubling-revenue-and-narrowing-losses-can-it-succeed/
