Key takeaway

We believe the company's core new materials business remained stable, with revenue up 2.42% YoY in 1H26 and the GPM of its core business remaining steady, providing a solid foundation for investment in new businesses. Current profit pressure is mainly due to consumer-grade embodied AI robots remaining in the R&D and commercialization preparation stage, while spending on R&D, channel development, and supply chain development is growing rapidly. The company has launched two products, Q1 and T1, and is advancing pre-orders and mass production planning. RMB210mn in advance payments for goods provides an initial indication of market demand. Going forward, close attention should be paid to the progress of mass-production deliveries, the pace of revenue recognition, and product gross margin.

Event

Swancor released its 1H26 earnings results. In 1H26, the company recorded operating revenue of RMB803mn, up 2.42% YoY; net profit attributable to the parent company was RMB-167mn, down 656.97% YoY.

1) Revenue: 2Q revenue was RMB385mn, down 7.2% YoY and 7.9% QoQ;

2) Gross profit: Gross profit in 2Q was RMB62mn, up 12.7% YoY and 18.6% QoQ; GPM was 16.2%, up 2.9 pcts YoY and 3.6 pcts QoQ;

3) Net profit: 2Q net profit attributable to the parent company was RMB-125mn, down 1,807.1% YoY and 205.5% QoQ;

4) Expenses: Selling expense, administrative expense, R&D expense, and financing expense were RMB17mn, RMB34mn, RMB134mn, and RMB-2mn in 2Q, respectively. The corresponding expense ratios were 4.3%, 8.9%, 34.9%, and -0.5%, respectively. The combined expense ratio was 47.6%, up 27.1 pcts QoQ;

Quick Take

The company swung from net profit attributable to the parent company to a net loss, mainly due to upfront investment in the robotics business

Total period expenses amounted to RMB269mn in 1H26, up RMB192mn YoY; gross profit was only RMB115mn over the same period, and the increase in expenses largely explains the swing from profit to loss. Within R&D expense, investment in consumer-grade embodied AI robots amounted to RMB164mn, accounting for 90.9% of total R&D expense and 20.4% of operating revenue. R&D expense reached RMB134mn in 2Q26, up 193.1% QoQ. The quarterly period expense ratio rose to 47.6%, while net loss attributable to the parent company widened to RMB125mn.

Entered the consumer robotics business following the change of control and obtained licenses for certain AgiBot technologies

From September to November 2025, AgiBot and its parties acting in concert acquired control of the listed company through negotiated share transfers and a partial tender offer. Together, they hold a 63.6% stake in Swancor. AgiBot became the controlling shareholder, and Deng Taihua chairman of the board and CEO of AgiBot, become the actual controller. Following the change in control, the company established an independent R&D team for consumer-grade embodied intelligent robots. In December 2025, Swancor signed an agreement with its related party, AgiBot, to acquire the right to use the “ARM embedded software and communications middleware software code” for RMB26mn.

The company differentiates its robotic products by targeting personal and household use cases, with commercialization entering the implementation stage

The company’s PrimeBOT focuses on personal and household scenarios, with an emphasis on learning, companionship, personal growth, and lifestyle services; AgiBot primarily serves industrial and commercial scenarios. The company has launched two consumer-grade embodied AI robots: PrimeBOT Q1 and T1. Q1 is a compact humanoid robot with full-body force control. It stands approximately 88 cm tall and weighs around 15 kg. It can be folded to fit into a standard backpack, highlighting its portability. Its main applications include embodied AI development, high-tech collectible toys, and home companionship. T1 is a transformable robot that stands approximately 100 cm tall and weighs approximately 16 kg. It can autonomously switch between wheeled-legged humanoid and quadrupedal forms, offering intelligent following and creative filming capabilities. Pre-orders for both products began on August 23, with the first batch of shipments expected to commence in September. In terms of channels, as of the end of 1H, the company had established offline experience stores in Shanghai, Shenzhen, Guangzhou, Hangzhou, Wuhan, Xi'an, Xiamen, and other cities; its online presence covered channels including its official WeChat mini program, Tmall, Douyin, Bilibili, and Xiaohongshu. In terms of market demand, the company disclosed advance payments of RMB210mn for its robotics business; contract liabilities at the end of the period stood at RMB188mn, a significant increase from RMB4mn at the beginning of the period.

Mass production and supply chain frameworks are taking shape, and the materials business is beginning to generate synergies

In terms of the supply chain, the company has partnered with Lens Robotics, a subsidiary of Lens, on the initial planning of a robot production line with capacity in the tens of thousands of units. It is also working with WoLong on a core component production line, covering complete robot assembly, production line construction, mass-production process optimization, and key components. In 1H26, the company completed the development and commenced mass production of two types of robotic shoe components and torso cushioning layers. It also advanced the development of lightweight carbon fiber shells, mainly to meet robots' needs for weight reduction, shock absorption, and impact resistance.

Investment recommendation

The company’s core new materials business operates steadily, providing a solid foundation for investment in new businesses; it has launched two consumer-grade embodied AI robots, the Qiyuan Q1 and T1, and received RMB210mn in advance payments from customers, with mass production deliveries and revenue recognition expected to become key areas to watch; however, the robotics business remains at the stages of R&D, use -case validation, and mass production ramp-up, while heavy investment in R&D, distribution channels, and the supply chain will continue to weigh on near-term profitability. We forecast the company's net profit attributable to the parent company at RMB57mn, RMB-99mn, and RMB455mn for 2026–2028, respectively, implying 2026E/2027E/2028E PEs of 1,032.65x/N/A/128.85x. We initiate coverage on the company with a “Buy” rating.

Sensitivity analysis: Under the pessimistic scenario, the company's revenue grows more slowly, while raw material costs and R&D expenses increase. Operating revenue is projected at RMB2.43bn/RMB2.83bn/RMB6.05bn in 2026/2027/2028, respectively. We forecast the company’s net profit attributable to the parent company at RMB31mn, RMB-140mn, and RMB360mn for 2026-2028, respectively, implying P/E of 1,870.23x, N/A, and 161.96x.

Risks:

1) The consumer-grade embodied AI robot market remains at an early stage. If product stability, user interaction, or pricing falls short of consumer expectations, preorder conversion, repeat purchases, and channel expansion may underperform expectations, prolonging the business model va lidation cycle.

2) The company's robotics business remains in the R&D and mass production ramp-up. If technology iteration, component yield rates, supply chain coordination, finished product delivery, or after-sales service system development falls short of expectations, costs may increase.

3) Investment in R&D, channels, and personnel remains high. If revenue growth lags expense growth, losses may widen and cash flow may come under pressure.

4) The new materials business may face risks from raw material price fluctuations, changes in downstream demand, intensifying industry competition, and delays in passing through price changes.