UBTECH Robotics Strikes Deal to Control Manufacturer Fenglong Electric in Supply Chain Push
UBTECH Robotics has agreed to acquire a controlling stake in Shenzhen-listed Zhejiang Fenglong Electric for a total consideration of RMB 1.665 billion (US$229 million). The strategic move underscores the humanoid robot maker’s aggressive push to vertically integrate its supply chain and bolster massive manufacturing capabilities just one month after raising fresh capital.
Under the agreement signed on December 24, UBTECH aims to secure a 43% aggregate stake in Fenglong Electric through a combination of negotiated share transfers and a partial tender offer. The transaction sets the purchase price at RMB 17.72 per share, representing a discount of approximately 10% to Fenglong’s pre-suspension price. Upon completion, UBTECH founder and CEO Zhou Jian will become the actual controller of the target company.
The acquisition had an immediate impact on market sentiment. Shares of Fenglong Electric surged by the daily 10% limit to close at RMB 21.65 when trading resumed on December 25, valuing the company at approximately RMB 4.7 billion. UBTECH, which is listed in Hong Kong with a market capitalization of HK$55.1 billion, suspended trading on the same day due to the holiday schedule in Hong Kong.
This deal follows UBTECH's completion of a massive HK$3.1 billion share placement in November 2025, where the company signaled that 75% of proceeds would be prioritized for acquisitions and investments in upstream and downstream partners. By taking control of Fenglong, a company established in precision manufacturing, UBTECH intends to accelerate the commercialization of its intelligent robots by leveraging the target’s mature supply chain and industrial production capacity.
Transaction Structure and Funding
The acquisition is structured in two stages. First, UBTECH will purchase 65.53 million shares, or 29.99% of Fenglong Electric, from Chengfeng Investment—an entity related to Fenglong’s current controller Dong Jiangang—for RMB 1.161 billion (US$160 million). Following this transfer, UBTECH or its designated entity will launch a partial tender offer to acquire an additional 28.45 million shares, representing 13.01% of the total share capital, at the same price of RMB 17.72 per share.
UBTECH confirmed that the acquisition will be funded through internal resources, including proceeds from its recent general mandate placement. Since its listing in December 2023, UBTECH has conducted six share placements, raising over HK$7 billion in total. The company’s liquidity improved significantly in late 2025, providing the "ammunition" required for this controlling stake acquisition despite the company's own history of net losses.
Industrial Expansion and Manufacturing Synergy
The acquisition aligns with UBTECH’s strategic pivot toward industrial applications in 2025. The company recently launched the Walker S2 industrial humanoid robot and has secured orders exceeding RMB 1.4 billion (US$192 million) this year. With current monthly capacity for the Walker S2 topping 300 units and annual delivery expected to exceed 500 units, UBTECH has projected its capacity for industrial humanoid robots will reach 10,000 units by 2026.
Fenglong Electric’s capabilities are viewed as complementary to this rapid scaling. Fenglong specializes in critical components for garden machinery, such as ignition systems and flywheels, as well as precision aluminum die-casting for the automotive and semiconductor sectors. UBTECH stated that the collaboration aims to merge its R&D and design strengths in humanoid robots with Fenglong’s component manufacturing and supply chain management, creating a solid foundation for industrial convergence.
Financial Performance Context
The deal brings together a high-growth tech firm and a traditional manufacturer with diverging financial profiles. UBTECH, often cited as the "first humanoid robot stock" in Hong Kong, has focused on revenue growth over immediate profitability. In the first half of 2025, UBTECH reported revenue of RMB 618 million (US$85 million), a 27.5% increase from RMB 557 million in the prior-year period.
In contrast, Fenglong Electric has shown profitability amidst a recovery in its sector. For the first three quarters of 2025, Fenglong reported revenue of RMB 373 million (US$51 million) and a net profit of RMB 22 million (US$3 million), representing a surge of over 1,700% compared to the previous period.
Sector-Wide Consolidation
UBTECH’s move is part of a broader trend of capital acceleration within the "embodied AI" and robotics sector in 2025. Several leading Chinese robotics firms have recently sought greater access to capital markets or manufacturing shells.
In December 2025, Hangzhou-based Deep Robotics initiated IPO counseling with CITIC Securities. Similarly, Unitree Robotics completed its listing counseling in November. Other players have opted for acquisitions to secure public listing status or industrial bases. In September, Agibot acquired control of Shanghai-listed Sunvic Chemical , a move that saw the target company's stock price skyrocket. Additionally, Sevnce Robotics recently acquired a controlling interest in Senton Energy.
Future Operational Plans
Despite the change in control, UBTECH has signaled stability for Fenglong’s existing operations. According to the announcement, Fenglong Electric will continue its principal business activities, and there are no immediate plans to alter its core operations or management structure significantly in the next 12 months. Furthermore, UBTECH explicitly stated it has no plans to execute a major asset restructuring or a backdoor listing through Fenglong Electric within the next 36 months, aiming instead to optimize resource allocation and enhance the listed company's sustainability.