Summary of the Core Content
This report directly exposes the truth behind the bubble in the embodied intelligence/robotics industry, which has been booming for two to three years: The founders of leading companies have publicly revealed the industry's common practice of inflating revenues through related-party transactions. Coupled with the sharp drop in stock prices of two prominent robotics companies, Meikamand and Yushu Technology, after their listings, regulatory authorities have tightened the review process for robotics IPOs. As a result, the industry has completely moved away from the reckless phase where a “hard-tech label” was enough to secure funding and a listing. It has officially entered a new era where real customer payments and tangible business data are the key criteria for success.
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Detailed Analysis of the Content
1. Social media complaints reveal the absurdity of the industry's fraud
The public criticism from Meikamand's founder, Shao Tianlan, is not just personal grudges but a revelation of long-hidden industry practices:
Many embodied intelligence companies are not generating revenue from selling products but through fraudulent schemes such as “self-service accounting.” They simply register a shell company called a “data collection center,” collude with investors and local governments, and use related suppliers to create fictitious sales, inflating revenues by tens of millions or even hundreds of millions.
The problem is that this fraud creates a self-escalating cycle: If you generate 100 million in fake revenue this year, investors will expect a 50% increase next year, forcing you to create another 150 million in fake revenue. You have to pay value-added tax and give kickbacks to the related parties involved in the fraud, resulting in substantial losses for each additional yuan of fake revenue generated. Many companies in the AI sector, including the “Four Little Dragons,” fell into this trap, wasting investors' money. Now, the robotics industry is repeating the same mistakes. Shao Tianlan also questioned the claim that local governments supported the listing of Galaxy General, implying that most robotics companies use government endorsement as a guise to deceive investors and do not actually focus on developing real products.
2. The stark contrast between Meikamand's listing performance and market reaction
Meikamand’s listing exemplifies the contrast between “hype” and “real financials":
It is far from the “toy company” that only demonstrates humanoid robots at exhibitions. The company sells “eyes and brains” for industrial robots—3D cameras and vision software that enable robots to identify and accurately grasp parts on production lines. Its revenue growth has been nearly 50% in the past three years, with a gross margin of 64%, higher than many software companies. Half of its revenue comes from overseas customers, and the gross margin for overseas business is nearly 80%. A high percentage of repeat business indicates that satisfied customers are willing to place additional orders.
However, the stock price dropped by 20% shortly after the listing. This is because investors were blindly hyped by the concept of being the “first stock in the embodied intelligence sector,” leading to an oversubscription of 3,800 times. Upon closer examination of the financial reports, it was revealed that the company had accumulated losses of 1 billion yuan over three years, with negative operating cash flows and only just over 300 million yuan in cash on hand. The company’s success relied on mature 3D cameras that have been sold for years, while the much-anticipated flexible hands and multi-modal models for humanoid robots have not yet generated any revenue. Once the hype faded, the market priced the stock based on actual profitability.
3. Sudden tightening of IPO reviews
The regulatory authorities are not trying to kill the robotics industry but to prevent fraudsters from entering the stock market. While the Science and Technology Innovation Board previously favored robotics and embodied intelligence as key sectors, many entrepreneurs mistakenly believed they had a guaranteed path to a listing. Now, the new regulations require proof that revenues come from real third-party customers, not related-party transactions, and that losses are being reduced. Companies with genuine technological breakthroughs are the focus. For example, Yushu Technology, a leading company that can sell robots in bulk and even make a profit, saw its stock price drop from over 1,100 yuan to just over 500 yuan shortly after listing due to market reality checks. If companies that rely on fraud to generate revenue were allowed to list, retail investors would bear the consequences, leading to a chaotic market.
The new strict reviews aim to keep fraudsters out of the stock market and ensure that the public does not support industries with inflated values.
4. The diminishing effectiveness of “local government support for listings”
In the past, almost all robotics startups included statements like “We are a key supported company for listing by the local government” in their promotional materials, implying a guaranteed IPO. However, local government support comes in four different forms:
- General incentives such as rent discounts, talent subsidies, and free computing resources.
- Practical support by providing testing venues in parks, factories, and industrial parks.
- Financial support in the form of investment from local industrial funds, such as Beijing’s 10-billion-yuan robotics fund, which has invested in companies like Galaxy General and Yushu Technology.
- Guidance in the IPO process and assistance with regulatory procedures.
These supports are valuable, but they do not guarantee sales or customer purchases.
The myth that local government endorsement guarantees a listing no longer holds weight; investors now focus on whether the products can be sold and whether the company can generate real profits.
5. A complete reversal in the robotics industry’s logic
The rules of the game have changed: Entrepreneurs can no longer rely on empty promises. Investors now demand detailed financial explanations:
- Are the customers truly independent or just shell companies used for fraudulent transactions?
- Can the company’s gross margin cover production and research costs, or does it rely on subsidies?
- Will existing customers continue to buy products, or will they use them as exhibits and stop purchasing?
- Can the company’s spending pace be sustained, or will it deplete its cash reserves quickly?
“Patient capital” is not about unlimited funding; it requires genuine technological innovation and profitable products. Those who rely on fraud or hype will soon be eliminated from the industry.