In recent days, the China Securities Regulatory Commission has been working on special measures for "new economy enterprises" in key industries such as cloud computing, biotechnology, artificial intelligence, and high-end manufacturing. These efforts have introduced an expedited IPO process, sparking excitement in the market.
The New Third Board is one of the most prominent platforms for China's new economy, hosting numerous companies involved in cutting-edge fields like cloud computing, 3D printing, and robotics. The robotics sector on the New Third Board has especially caught attention, with nearly 2.3 billion yuan in financing plans announced this year. This has raised expectations that a "unicorn" might soon emerge from this segment.
Last year alone, nearly 2.3 billion yuan was raised through financing plans by robot companies on the New Third Board. According to data from Dongcai Choice, there are currently around 100 robotics firms listed on the board, covering areas such as service robots, industrial robots, and medical robots.
From 2017 to now, 32 of these companies have announced financing plans totaling almost 2.3 billion yuan. Among them, Zhi Zhi Smart (834869) stood out with a particularly high share price of 124.93 yuan per share. On October 10, 2017, the company announced it would issue up to 3.61 million shares at that price, aiming to raise no more than 450 million yuan.
Zhi Zhi Smart specializes in intelligent service robots, offering robotic customer service solutions to telecom operators, banks, e-commerce companies, and government agencies. Its clients include major telecom providers, financial institutions like China Construction Bank and Bank of Communications, and industry giants such as JD.com, Suning, and Wanda. The company serves over 10,000 customers and holds one of the largest knowledge bases in the field.
However, despite growing revenue, Zhi Zhi Smart has been unprofitable for over five years. In 2016, it reported revenue of 85.82 million yuan, a 90% increase from the previous year, but also recorded losses of over 73 million yuan, a 127.9% rise. While the first half of 2017 saw a narrowing loss, full-year results remain unclear.
On January 5, 2018, after several delays, Zhi Zhi Smart successfully raised 263 million yuan from its 450 million yuan fundraising plan. The main investor was Silicon Valley Paradise. As part of the deal, the company’s shareholders, including its controlling owner, promised to submit an IPO application by June 30, 2020. If not, Silicon Valley Paradise could demand the sale of over 51% of the company’s equity.
This means that if Zhi Zhi Smart fails to meet the deadline, its control could change hands. Just as the company was preparing to make big promises, news emerged that the China Securities Regulatory Commission was considering relaxing IPO rules for new economy enterprises.
Currently, six New Third Board robot companies have a market capitalization exceeding 1 billion yuan, while ten others exceed 5 billion. The highest valuation belongs to Zhi Zhi Smart, which reached about 2.5 billion yuan based on its last round of share issuance. Another top contender is Tianzhi Hang (834360), valued at 2.37 billion yuan.
Tianzhi Hang is a leading medical robotics firm and the first in China to commercialize medical robots. It launched an orthopedic robot in 2010 that received the first medical robot registration license in the country. However, the long development cycle and high capital requirements of medical robotics pose challenges. Experts note that it can take over a decade to move from technology to clinical application.
In August 2017, after years of losses, Tianzhi Hang had only 37 million yuan in its account. It then launched its first additional share issue at 13.28 yuan per share, raising around 400 million yuan. In December 2017, the Advanced Manufacturing Industry Investment Fund (Limited Partnership) subscribed almost entirely, backed by provincial guidance funds and the Ministry of Finance.
While the overall market value of New Third Board robot companies remains modest, many believe the sector still holds strong potential. Some private equity investors jokingly noted that startup valuations often grow faster than those of listed companies, suggesting that unlisted assets may yet see significant appreciation.
Whether there is a bubble or undervaluation, the future of these companies will likely be determined by their ability to deliver real value and innovation.
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