Automation everywhere: from hotels using service robots to cities piloting robotaxis, automation is fully mainstream. Heavy industry is even further ahead: autonomous electric mining trucks (XCMG) and nearly fully automated aerospace forging lines (GATD) highlight how far China’s industrial automation has matured.
AI Reshaping Workforces: AI-enabled productivity is beginning to drive restructuring. Kingdee is cutting headcount by 17% while upgrading to higher-cost AI talent. Ubtech’s humanoid robots are already replacing ~2 workers per unit at major manufacturers, with deployments accelerating.
Companies Near Profit Inflections: years of capex are paying off: Fourth Paradigm, MGI Tech, and Kingdee are approaching breakeven, setting the stage for margin expansion as investment intensity normalizes.
Key company insights:
Aerospace & Industrial Automation
• GATD now the largest Chinese supplier of ring forgings for global aero-engines (GE and all major OEMs).
• GE gas turbine demand booming — backlog to 2032.
• Highly automated operations at 25% of U.S. cost.
• New Slovakia plant to mitigate U.S.–China trade friction.
AI-Driven Content Production
• Meitu scaling AI tools across image, video, and design; early stage but deepening ties with Alibaba.
Humanoids & Industrial Robotics
• Ubtech’s Walker S/S2 humanoids deployed at BYD, Foxconn, Zeekr and others.
• One “silicon worker” replaces two humans; 1,000 units today, targeting 10,000 by 2027 as prices fall toward $30k.
Digital Content Protection & Monetization
• Vobile scaling fingerprinting & watermarking tech for YouTube, Warner Bros, and major China platforms.
• Unique rev-share model: typically $55 per $100 of ad revenue; 30% kept as service fee.
• Strong H1: +23% sales, +119% net profit, 99% retention; fastest growth from AI-driven content.
Next-Gen Life Sciences
• MGI Tech (China’s Illumina) gaining global share ex-US with competitive tech and lower cost.
• Near breakeven after three years of heavy capex and talent investment.
Enterprise Software & AI Agents
• Kingdee sees 2025 as the start of an “industrial AI revolution.”
• “Kosmic” AI agents already lifting manufacturing margins by identifying slow-moving inventory with 30+ optimization levers.
• Subscriptions +22% (90% gross margin); profitability expected this year.
• Restructuring: 17% layoffs over two years, offset by senior AI hires.
Bottom line: China’s consumption recovery remains gradual — but AI deployment across industrials, content, and enterprise software is accelerating at remarkable speed, reshaping cost structures, workflows, and competitiveness.
