Initiate at Underperform with RMB350 PO; Scaling the body, building the brain

We initiate coverage of Unitree with an Underperform rating and a PO of RMB350. We expect global humanoid robot (HR) unit sales to reach 1.2mn in 2030, driven by rising end-demand amid population aging and labor shortages, technological improvements in AI and motion control, and declining BOM costs, though near-term adoption is constrained by uncertain commercial payback, insufficient robustness in contact-rich interactions, and underdeveloped embodied AI models. Unitree is the global leader in quadruped robots with a 32% market share in 2024, sold more than 33k quadruped units during 2023-25, and leverages its core-component, motion-control, and scalable-manufacturing capabilities to expand into HR, collaborating with NVIDIA to expedite embodied AI. We estimate a 57% total revenue CAGR over 2025-28, with HR shipments rising from c.5k units in 2025 to 52.7k in 2028 and humanoid/quadruped ASPs declining at 17%/6% CAGRs. Our PO is based on DCF (12.0% WACC, 8% FCF perpetual growth);