Gasgoo Munich-The narrative of humanoid robots moving from the lab to mass production has fueled a rally in the robotics sector's valuation over the past six months. Harmonic reducers—the core "joints" of these machines—have stepped firmly into the spotlight.
On June 22, a key player in this field—Laifual Drive (03952.HK)—kicked off its Hong Kong IPO. The offering runs through June 25, with trading expected to begin on June 30.
Laifual Drive plans to sell 13.4419 million H-shares globally, priced between HK$77.00 and HK$85.50 apiece. At the top end, the company stands to raise roughly HK$1.149 billion.
With Leaderdrive already listed on the A-share market and Japan's Harmonic Drive Systems long dominating the high-end sector, Laifual Drive's debut signals a shift. The push for domestic substitution in harmonic reducers is moving past the technical breakthrough phase and entering a new stage of large-scale volume expansion.
Image Source: Laifual Drive
Laifual Drive's Fundamentals
Judging by market share alone, Laifual Drive's position can be summed up in one phrase: high volume, but not yet the most profitable.
Based on 2025 shipments, Laifual Drive holds a 21.4% share of China's robotic harmonic reducer market—ranking second only to Leaderdrive's 27.5%.
But look at revenue, and the picture gets more nuanced. Laifual Drive's share drops to just 12.9%, while Leaderdrive climbs as high as 27.6%.
The gap between shipment volume and revenue share reveals a clear reality: Laifual Drive is trading lower prices for higher volume—a classic "sacrificing margin for share" strategy.
The prospectus confirms this. Over the past three years, the average selling price of Laifual Drive's reducers has steadily declined, falling from roughly 795 RMB per unit in 2023 to about 571 RMB in 2025—a cumulative drop of nearly 30%.
The company openly admits this is a "strategic price adjustment to secure greater market share." In other words, as the industry takes off, Laifual Drive is choosing to grab share rather than protect profits—a deliberate strategic choice.
And clearly, the strategy is delivering results.
In 2025, revenue surged 142.2% year-on-year, leaping from 108 million RMB in 2024 to 261 million RMB. Over the same period, harmonic reducer sales doubled from 143,000 units to 292,000 units.
Even more telling is the qualitative shift in product mix. Revenue from joint modules and robotic arms skyrocketed from under 3 million RMB to over 68 million RMB, while automated workstations contributed another 24 million RMB in new business.
This means Laifual Drive's strategy—expanding from standalone reducer components to modules and workstations—is paying off.
Yet the cost of this price war is also visible on the income statement.
From 2023 to 2025, Laifual Drive recorded net losses of 169 million RMB, 169 million RMB, and 171 million RMB, respectively. At first glance, losses haven't narrowed. But a closer look shows an annual non-cash accounting item—changes in the carrying amount of redeemable liabilities—totaling about 145 million RMB each year. This will cease post-listing.
Stripping that out, Laifual Drive's adjusted net loss actually shrank from 23.74 million RMB in 2023 to 8.9 million RMB in 2025—bringing it within striking distance of break-even.
According to the prospectus, net proceeds from the IPO—around HK$1.1 billion—will see 55% funneled into expanding production facilities. That includes adding capacity for 800,000 harmonic reducers annually.
What does that number signify? Total industry shipments in 2025 were just 1.4 million units. Laifual Drive, on its own, is preparing to lift capacity to nearly half of that current total.
Image Source: Laifual Drive Prospectus
Offensive and Defensive Moves in a "Two-Strong Market"
Laifual Drive is grabbing market attention right now, and that's closely tied to its positioning in the humanoid robot supply chain.
The prospectus reveals a crucial detail: as of the end of 2025, only two domestic manufacturers had achieved mass delivery of harmonic reducers for humanoid robots. Laifual Drive is one of them.
Moreover, across the broader Chinese market, Laifual Drive's top-tier status is clear. Alongside Leaderdrive, it forms the first tier, together commanding nearly half the market share—a position unlikely to be shaken anytime soon.
This structure stems from the nature of the industry. Harmonic reducers rely heavily on material science, precision machining, and deep technical accumulation. For new players, the journey from zero to stable mass production takes at least three to five years of R&D and validation.
Put simply, there are no shortcuts here. Time itself is the deepest "moat."
But a "duopoly" doesn't mean gentle competition. On the contrary, Laifual Drive's price war is playing out as a direct confrontation with Leaderdrive.
It's worth noting that a single humanoid robot typically requires 14 to 20 harmonic reducers—far surpassing the 3 to 6 needed for traditional industrial robots. That multiplier effect points to near-exponential demand growth.
CIC forecasts that China's harmonic reducer shipments will jump from 1.4 million units in 2025 to 20.7 million in 2030, a CAGR of 72.4%. Demand from humanoid robots will surge from an 11% share to 82%, becoming the largest source of consumption. For Laifual Drive, that is undeniably a strong tailwind.
Then there is the structural opportunity of import substitution. For years, high-end harmonic reducers were dominated by firms like Japan's Harmonic Drive Systems, with the domestic localization rate sitting at just 10% in 2020. As Chinese robot makers push for supply chain autonomy, the drive for domestic substitution will remain the sector's dominant theme for the next three to five years.
Of course, Laifual Drive isn't entirely without worries.
The capacity digestion cycle is the first issue to watch. The planned addition of 800,000 units is several times Laifual Drive's current capacity. If demand for humanoid robots falls short of expectations, that massive capacity could turn into a financial burden.
The sustainability of the price war also warrants scrutiny. Average prices have dropped 30% in three years—can that trend stabilize? If the decline continues, profit margins will keep getting squeezed, even if shipments double.
And accounts receivable risk cannot be ignored. By the end of 2025, trade receivables hit 220 million RMB, up over 170% year-on-year—a pace nearly matching revenue growth. While ballooning receivables might be a temporary phase of rapid expansion, the risk of bad debts needs close monitoring.
In short, Laifual Drive's timing for entering the capital market is certainly not bad. But the real test begins after the listing.
