Unitree Robotics - A (688836.SS): Physical-AI S curve likely pulled forward, Astra/LLM catalyst and extended regulatory scarcity premium drive double upgrade to OW

J.P. Morgan double-upgrades Unitree Robotics (688836.SS) to Overweight from Underweight with a new Dec-27 price target of Rmb995 (prior Rmb300), implying c.20% upside versus the Rmb845 open-day closing price. Feedback from the 2026 World Physical AI Conference in Hangzhou led us to reassess the cautious view we took away from our CIIF tour: founder and CEO Wang Xingxing pulled forward his physical-AI breakthrough outlook from "up to 10 years" to "2-3 years" or even "1-2 years," underpinned by rapid advances in frontier large-model planning AI such as Astra and other LLMs, which are shifting the industry bottleneck from the "brain" to last-mile real-world interaction and making the installed base and platform positioning more valuable. A slower pace of primary and IPO activity should extend the scarcity premium for already-listed leaders like Unitree. We pull forward our sales forecasts, with 2028/30 sales now implying c.20%/c.10% global market share;