Summary of Key Points
YuShu Technology has not yet gone public, but its valuation has been speculated to be 61 billion yuan (with a static price-earnings ratio of 219 times). The high valuation is not just about the robots performing impressive acrobatics; it demonstrates the company's ability to mass-produce, deliver, and generate revenue. The company has achieved a compound annual growth rate of over 220% in revenue over three years, with more than 30,000 quadruped robots sold and 5,500 humanoid robots expected to be shipped by 2025 (generating revenue of 877 million yuan, exceeding that from quadruped robots). What's more significant is the strategic investment from both DeepSeek (a large-scale model company) and Tencent: DeepSeek seeks data from the physical world, while Tencent needs the hardware to implement these robots in real-world scenarios. Together, they form a complete AI ecosystem consisting of "brain, body, and application." However, the high valuation also carries risks. In the first quarter of 2026, non-recurring net profit decreased by 52%, indicating that if price cuts exceed cost reductions, both gross margins and the valuation could be under pressure.
Breakdown and Interpretation
1. What Justifies the 61 Billion Yuan Valuation?
The high valuation is not based on mere concepts but on the ability to generate revenue through mass production and delivery:
- Amazing Growth Rate: Revenue increased from 159 million yuan in 2023 to 1.699 billion yuan in 2025, a more than tenfold increase (compounded annual growth rate of 220%), with gross margins remaining at 60%.
- Actual Sales: Over 30,000 quadruped robots have been sold, and 5,500 humanoid robots are expected to be sold by 2025 (revenue of 877 million yuan). While many competitors are still showcasing prototypes at exhibitions, YuShu is already making real money from its robot sales.
- Valuation Growth with Substance: The valuation rose from 3.785 billion yuan to 61 billion yuan (a 16-fold increase) in less than two years, driven by the proof that robots are not just toys but commercially viable products.
In short, capital is investing in the certainty that robots can generate substantial profits on a large scale.
2. Giants Competing for Investment: Investing in the Ticket to AI's Physical World
DeepSeek and Tencent are investing in YuShu for different reasons:
- DeepSeek Needs Physical Data: Large-scale models rely on text data, but information about physical actions like grip strength, friction, and center of gravity is lacking. Investing in YuShu gives them access to this exclusive data, enhancing their models' practical capabilities.
- Tencent Needs Hardware: With its cloud services, WeChat ecosystem, and corporate clients, Tencent needs tangible tools that can integrate into factories and warehouses. YuShu's robots serve as a platform for implementing AI solutions, with Tencent's cloud providing backend support.
- The Perfect Combination: DeepSeek (the brain that understands instructions) + YuShu (the body that executes actions) + Tencent (the platforms to connect with customers and place orders) cover the entire AI value chain from idea to implementation to profit generation.
This partnership is like having a brain (DeepSeek) and customers (Tencent), but lacking the practical tools (YuShu); therefore, they need to acquire YuShu to complete the ecosystem.
3. The Real Barrier: Not Just Dancing Skills, but Stability in Operation
Previous humanoid robots were like concept cars that couldn't be used in real-world applications—expensive, prone to failure, and requiring constant maintenance by engineers. YuShu's strength lies in turning robots into practical tools:
- Cost Reduction through Self-Manufacturing: The company manufactures key components such as motors, joints, and controllers, reducing costs with scale. For example, the price of the G1 robot dropped from 99,000 yuan to 85,000 yuan, and the R1 model to 39,900 yuan. Although these may still be out of reach for ordinary consumers, they are affordable for research institutions and businesses.
- Stability Matters: Customers care about whether robots can work continuously for long periods and how much labor they can save. YuShu ensures that its first batch of robots is as reliable as the first one sold, making the investment worthwhile.
In short, a robot that can perform impressive acrobatics may be popular, but what customers really need is a reliable and efficient solution.
4. The Risks of High Valuation
A price-earnings ratio of 219 times implies that it would take 219 years to earn back the current valuation based on current profits, so the market is betting on future growth. However, risks are already emerging:
- Profit Growth Lagging Behind Revenue: Revenue increased by 68% in the first quarter of 2026, but non-recurring net profit decreased by 52% due to higher research and expansion costs.
- Pressure on Pricing: To become more widespread, robots need to be priced competitively. If price cuts exceed cost reductions, gross margins will decline, affecting the valuation.
- Key Indicators for Success: The real indicators of success are customer repurchase rates, the proportion of revenue from software services (not just hardware sales), and the actual labor savings provided by robots.
The ultimate goal of AI robots is not to perform like humans but to be practical tools that generate revenue for businesses. If YuShu cannot meet these criteria, the high valuation will likely fall.
Conclusion
YuShu's high valuation reflects the market's optimism about the commercialization of AI robots. However, whether it can hold up depends on its ability to transform robots from exhibition highlights into reliable solutions used in real-world applications. After all, capital is ultimately interested in generating actual cash flows.