The cobots cometh

Jamie Zhang

Chinese collaborative robot manufacturer Shenzhen Yuejiang Technology, also known as Dobot, has applied to list in Hong Kong.

Collaborative robots or cobots are designed to work safely alongside factory workers to boost productivity, achieve higher efficiency and cut costs. They are typically designed for specific applications, which can lead to higher research and development costs.

Dobot's revenue in 2023 was 287 million yuan (HK$315.38 million) and its gross profit was 125 million yuan.

Since its establishment in 2015, Dobot has completed nine rounds of financing and following its most recent D+ series in 2022, it had a valuation of 3.53 billion yuan.

However, the robot manufacturer's net loss rose 97 percent to 103.28 million yuan in 2023 from 52.48 million yuan the previous year.

Its R&D expenses in 2023, meanwhile, were 70.53 million yuan.

Dobot's sales and distribution costs have increased due to low customer concentration and these expenses in 2023 amounted to 127 million yuan, nearly half of its annual revenue.

As the largest exporter of cobots in China, Dobot has 27 models with payloads ranging from 0.25kg to 20kg, among which 22 are six-axis and five are four-axis models, representing the most extensive product portfolio in the global cobot industry, according to CIC.

Its four-axis and six-axis cobots are used across automotive, electronics, food packaging and medical industries and its customers include Foxconn, BYD (1211), Toyota, Sony and Samsung.

The six-axis cobots have six movable joint axes which can perform various tasks within a 360-degree range. Their motion range is almost the same as a human arm and are ideal for production lines.

Dobot's six-axis cobots are its primary source of revenue with sales of six-axis machines rising from 394 in 2021 to 2,374 in 2023.

But while sales have risen, prices have declined, with the average price of a six-axis cobot falling from 65,900 yuan in 2021 to 56,600 yuan in 2023. As a result, Dobot's gross profit margin has also declined from 50.5 percent in 2021 to 43.5 percent in 2023.

Stiff competition among cobot rivals have led to lower prices with no player enjoying a monopoly in the market.

Dobot is the world's number two cobot manufacturer and number one in China, with a global market share of 13 percent, according to Zhuoshi Consulting.

Its revenue has risen from 2021 to 2023 was 176 million yuan in 2021 to 243 million yuan in 2022 and 287 million yuan last year.

But it has lost nearly 200 million yuan over the past three years and its cash and cash equivalents were only 111 million yuan as of end-2023.

Dobot warns it may continue to incur net losses in the short term as it is expanding its business and operations in the rapidly growing cobot market and continuously investing in research and development.

The collaborative robot manufacturer therefore may not be able to achieve or maintain profitability in the short term.

Dobot will use the proceeds from the IPO for product development, boosting its manufacturing capabilities, expanding overseas sales channels and for operating capital. Guotai Junan International Securities and Agricultural Bank of China International are joint sponsors of the listing.