The first harmonic reducer company to list in Hong Kong has handed the market a clean test of what an IPO is actually worth in this sector. Four months after its June debut, Laifual Harmonic is trading 64.1 per cent below its offer price.
The company priced at HKD 85.50 and had to use Hong Kong’s specialist technology route after two failed attempts on Shanghai’s STAR Market. The retail tranche was oversubscribed thousands of times. Ten cornerstones including Oaktree Capital and Harvest International put in HKD 431 million between them. By 20 October the shares had fallen to HKD 30.72, leaving those cornerstones with a paper loss of about HKD 276 million, or HKD 36 of value for every HKD 100 committed.
The volume went up and the price went down
The prospectus contains the whole argument. Unit sales of harmonic reducers rose from 115,300 to 291,500 in two years. Average selling price fell from RMB 802 to RMB 573 over the same period, a decline of almost 29 per cent. That is what market share purchased on price looks like in a component business.
It did not produce profit. The company lost roughly RMB 170 million in each of 2023, 2024 and 2025. Gross margin recovered to 27.3 per cent in the first half of 2026 and still has not cleared 30 per cent, which leaves it visibly behind the incumbents it displaced.
This is the paradox sitting inside China’s robot supply chain. The orders are real. The harmonic reducer is genuinely the joint heart of a humanoid, and domestic suppliers have broken a monopoly that Japanese vendors held for decades. But downstream assemblers are compressing hardware cost on every new model, and upstream suppliers are answering with price cuts to hold the socket. Shipments compound. Margin evaporates.
The lock-up is the next test
Hong Kong cornerstones usually carry a six-month lock-up, so this tranche becomes sellable around the end of the year. Trading in the stock is already thin. Whether the secondary market can absorb that supply is now a bigger question for the share price than any order book.
Laifual is not an isolated case. Several Chinese robot companies listed in Hong Kong in 2026 and several broke issue price quickly. The pattern is consistent enough to read as a repricing rather than bad luck. Primary market investors were underwriting a category. Secondary market investors are underwriting a P&L, and they are refusing to pay for the distance between the two.
Domestic substitution is a real industrial achievement. It is not, by itself, a business model, and an IPO is a starting gun rather than a finish line.
Editor’s note: This is an adapted translation of the original OFweek report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://robot.ofweek.com/2026-11/ART-8321201-12003-30710487.html.