China Next Winners: What if harmonic reducers matter less than expected? We prefer Shuanghuan

This report is part of a series on China Next Winners in which we identify the next generation of industries and corporate winners in China. In this report, we challenge the notion that harmonic reducers are indispensable to humanoid robots, and prefer Shuanghuan because of its comprehensive expertise and product portfolio in gears and reducers (Exhibit 15). We believe harmonic reducers are important, but not indispensable. The game is changing as robotic intelligence increasingly compensates for mechanical precision: growing evidence suggests that many daily tasks may not require ultra-high mechanical precision, as vision-based closed-loop control can continuously correct robotic arm positioning errors in real time. This helps explain why low-cost robotic arms built around planetary reducers are increasingly capable of performing practical tasks, such as X Square sorting parcels with high speed and accuracy, while robotic "brain" leaders like Physical Intelligence and Google are also