Chinese robots are on a roll. Morgan Stanley shares its favorite plays
China is not only installing more robots, but building more of them. That thesis is driving Morgan Stanley’s view that China will keep growing as a global robotics leader, giving two Chinese companies an edge, investment analysts said in a Sept. 30 report shared with media in the last week. The analysis came on the heels of the International Federation of Robotics’ annual report released in late September that showed that in 2024, China not only installed a record high 295,000 industrial robots, but domestic suppliers outsold foreign ones for the first time. “As robotics in China is opening up new markets, there is no indication that robot demand in China will decrease,” the report said. “There is still a lot of potential in Chinese manufacturing for 10% growth on average each year until 2028.” Global robot installations are forecast to grow by 6% this year to 575,000 units, and climb to more than 700,000 by 2025. With the latest advances in generative artificial intelligence, robots could soon be used more widely in new scenarios such as working together with humans or in service roles, the Morgan Stanley analysts said. “We prefer Inovance and Geekplus ,” they said. While Shenzhen-listed Inovance is a widely followed supplier of industrial automation products, Geekplus has largely flown under the radar and only listed in Hong Kong this summer. Geekplus sells automated robot systems primarily for moving products around warehouses. More than 70% of the company’s revenue came from outside mainland China in 2024 , while Geekplus claims its customers include more than 65 Forbes Global 500 companies . Analysts at Daiwa Capital Markets revealed those clients include Unilever, Walmart and Adidas, according to an Oct. 3 report that initiated coverage of Geekplus with a buy rating. The four companies did not immediately respond to a request for comment. The Daiwa analysts expect Geekplus to reach profitability this year, and benefit from industry growth of more than 30% a year through 2029. The Chinese company is also “well-prepared for U.S. tariffs,” the report said. It noted that even though about a quarter of Geekplus’ revenue comes from the U.S., the company charges 30% less than competitors, which gives it room to raise prices, while it could shift assembly to Japan. Morgan Stanley’s favorability on Geekplus is based on a comparison to the humanoid and autonomous driving sectors, with a caveat that execution uncertainty remains in addition to a smaller potential warehouse market. But the analysts expect Geekplus could benefit from the opportunity to gain market share faster than the overall industry’s growth. As for Inovance, the Morgan Stanley analysts said that if the economy grows faster than expected, that would boost demand for automation products. The analysts are particularly watching for whether Inovance’s EV control systems will see better-than-expected sales this year, supporting the stock. HSBC analysts in mid-September upgraded Inovance to buy from hold “given its market leadership in factory automation.” “We expect China’s industrial automation market to resume growth in 2026-27, after two years of downturn,” HSBC said. As a result, they expect Inovance can grow its earnings by 22% a year through 2027. —CNBC’s Michael Bloom contributed to this report.
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