Chinese robots are on a roll. Morgan Stanley shares its favorite plays

Morgan Stanley Highlights Top Chinese Robotics Stocks With Strong Growth Potential for Investors

Imagine a factory where robots work side by side with humans, making things faster and safer. That’s what’s happening in China right now, and it’s changing the game for investors everywhere.

Why Robots in China Matter for Investors

China isn’t just using more robots—they’re making them, too. This means China could become a global leader in robotics. For investors, that could mean new opportunities in technology, manufacturing, and even in companies you might not have heard of yet.

Bullish Case: Why This Is Good News

  • Record Growth: In 2024, China set a new record by installing 295,000 industrial robots, according to the International Federation of Robotics.
  • Homegrown Power: For the first time, Chinese robot makers sold more robots in China than foreign brands did.
  • Big Market Potential: Experts think Chinese factories could see 10% growth in robot use every year until 2028.
  • Tech Leap: New artificial intelligence is helping robots do more jobs, like working with people or helping in stores.
  • Top Picks: Analysts like companies such as Inovance, which makes automation products, and Geekplus, which builds warehouse robots.
  • Global Reach: Geekplus gets over 70% of its sales from outside China and works with big names like Walmart and Adidas.
  • Strong Growth Forecast: The warehouse robot industry could grow by more than 30% a year through 2029, according to Statista.

Bearish Case: Risks and Challenges

  • Market Uncertainty: Even though robots are booming, there’s still a chance things might not go as planned. Not every new robot company will be a winner.
  • Trade Tensions: About 25% of Geekplus’ sales come from the U.S., where tariffs could make business harder. However, Geekplus has some flexibility—they charge less than rivals and could move assembly to Japan if needed.
  • Economic Slowdowns: If China’s economy slows down, companies like Inovance could see fewer sales for their automation systems.
  • Smaller Markets: Some areas, like warehouse robots, might not grow as fast as the bigger industrial sectors.
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What the Pros Are Saying

Investment banks like Morgan Stanley and HSBC are paying close attention. HSBC thinks Inovance could grow its profits by 22% a year through 2027, especially if the factory automation market bounces back after a slow period. Daiwa Capital Markets expects Geekplus to become profitable this year and sees plenty of room for growth, even if tariffs or competition become tougher.

Investor Takeaway

  • Watch Chinese Robotics Stocks: Companies like Inovance and Geekplus could be interesting picks if you want to invest in robotics and automation.
  • Think Global: Many Chinese robot makers sell worldwide, so their success isn’t just tied to China’s economy.
  • Stay Balanced: Even though growth looks strong, remember that risks like trade wars and market slowdowns are real.
  • Look for Leaders: Focus on companies that have strong customers and can handle challenges like tariffs or rising costs.
  • Keep Learning: The robot industry changes fast—keep an eye on news and trends to spot new opportunities or red flags.

For the full original report, see CNBC

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