In the final week of June, Direct Drive Tech cleared its listing hearing with the Hong Kong Stock Exchange.
For its IPO, Direct Drive Tech is seeking a Main Board listing in Hong Kong, with CITIC Securities as its sole sponsor. According to the prospectus, it plans to issue up to about 122 million H shares.
Unlike robotics companies that make complete robots, Direct Drive Tech focuses on robotic joints, specifically robotic direct drive power modules. These are integrated motion units that can produce torque directly without an external reducer. According to Frost & Sullivan, Direct Drive Tech is the world’s first and only company to ship more than five million such modules for consumer robots. In 2025, it ranked first in China’s consumer robot direct drive power module segment, with a 61.1% share.
Across China’s broader consumer robot power module market, however, Direct Drive Tech ranked only eighth, with a 2.4% share. The reason is simple: direct drive modules accounted for just 3.9% of that market. According to the prospectus, the unnamed market leader is a micromotor company founded in Dongguan in 2000. It held a 12.9% share, more than five times Direct Drive Tech’s share, and is not listed.
Direct Drive Tech’s revenue grew from RMB 17.54 million (USD 2.6 million) in 2023 to RMB 79.8 million (USD 11.7 million) in 2024, then to RMB 282 million (USD 41.5 million) in 2025. That implies a two-year compound annual growth rate of 300.8%. Revenue increased about 16-fold over the period, driven by direct drive modules for consumer robots, whose revenue grew from RMB 3.2 million (USD 470,463.7) in 2023 to RMB 63.99 million (USD 9.4 million) in 2024, then to RMB 248 million (USD 36.5 million) in 2025.
The company’s rise coincided with a procurement wave among consumer robot makers. According to the prospectus, Direct Drive Tech sold its products to four of the world’s ten largest consumer robot manufacturers. Key categories such as household robotic vacuum cleaners and robotic lawn mowers began adopting direct drive technology at scale, placing Direct Drive Tech in the middle of that shift.
On the income statement, its adjusted net loss margin, measured on a non-IFRS basis, narrowed from 349.1% in 2023 to 15.4% in 2025. Its reported net losses over the past three years were RMB 75.585 million (USD 11.1 million), RMB 93.735 million (USD 13.8 million), and RMB 881 million (USD 129.5 million), respectively. The 2025 figure reflected a valuation adjustment tied to redemption rights.
Direct Drive Tech also had negative operating cash flow for three consecutive years. From 2023 to 2025, its net cash outflows from operating activities were RMB 52.96 million (USD 7.8 million), RMB 66.687 million (USD 9.8 million), and RMB 69.563 million (USD 10.2 million), respectively. At the end of 2025, it had RMB 354 million (USD 52 million) in cash and cash equivalents, supported by its Series C financing in December 2025 and bank borrowings. Net cash inflow from financing activities was RMB 424 million (USD 62.3 million).
Why revenue is rising while profit remains negative
In Direct Drive Tech’s 2025 revenue mix, power modules accounted for 97.4%, or RMB 274 million (USD 40.3 million). Complete robots accounted for only 2.6%, or RMB 7.307 million (USD 1.1 million). Put another way, Direct Drive Tech is a supplier of modules and components. Its complete robots function more as a showcase for technical validation than as a core business.
The gross margin of its module business was only 21.5% in 2025. That was an improvement from 13.5% in 2023, but the absolute level remained thin. By product, direct drive power modules, its largest category, had a gross margin of only 20%. Embodied joint modules had a gross margin of 35.6%. Complete robots, despite their small revenue contribution, had the highest gross margin at 64.3%.
The unit economics are more revealing. In 2025, Direct Drive Tech sold 8.5 million direct drive power modules, but the average selling price of its consumer direct drive modules was only RMB 29 (USD 4.3) per unit. From 2023 to 2025, the figures were RMB 28, (USD 4.1) RMB 30, (USD 4.4) and RMB 29, respectively. This is essentially a components business that sells unit by unit and competes on scale and cost. It is not a high-premium software or systems business.
The prospectus also shows pressure on module pricing in recent years. Direct Drive Tech has tried to offset that pressure through scale, expanding output from 200,000 units in 2023 to 8.5 million units in 2025, while also strengthening its bargaining power with suppliers.
The approach has advantages. Technical barriers can support customer stickiness, especially when modules are designed into a robot maker’s product roadmap. The risk is that if growth slows or scale effects weaken, a 21.5% gross margin leaves limited room for error.
Direct Drive Tech also faces two concentration risks. The first is customer concentration: in 2025, its top five customers contributed 85.7% of revenue, while the largest single customer accounted for 42.8%. The second is geographic concentration: in 2025, 99.4% of revenue came from mainland China, with overseas revenue almost negligible. On the supply side, its five largest suppliers accounted for 40.1% of procurement. Its core raw materials are enameled copper wire, magnets, and iron cores, all materials exposed to commodity price swings.
From April 2020 to December 2025, Direct Drive Tech completed 12 funding rounds, raising about RMB 648 million (USD 95.3 million) in total.
The cap table shows where the largest paper gains may sit. XbotPark, which invested in the 2020 seed round, had an adjusted cost per share of only RMB 0.05 (USD 0.007). By the Series C round in December 2025, the cost per share had risen to RMB 9.97 (USD 1.5). In five years, the entry cost increased by about 200 times, underscoring how heavily the IPO economics favor the earliest investors.
The shareholder register includes three Lenovo-linked funds: Lenovo Capital and Incubator Group, Legend Star, and Legend Capital. The Series C round brought in Rockets Capital, which is affiliated with Xpeng, with Xpeng as its largest limited partner holding about 60.73%; a SenseTime subsidiary; and Nanjing Chuangyi, which is affiliated with Horizon Robotics and invested in the Series A round. Beijing state-owned investors, including Shunxi Fund, the Advanced Manufacturing Fund, and Beijing State-owned Capital Operation and Management, together hold about 21%, making them the second largest shareholder group after the founder.
Under Chapter 18C requirements, a commercialized company must reach a valuation of HKD 4 billion (USD 510 million) and annual revenue of at least HKD 250 million (USD 31.9 million). Direct Drive Tech has cleared both thresholds. Based on its 2025 revenue of RMB 282 million, the valuation implied by its Series C round corresponds to a price-to-sales ratio of about 12 times.
Among several listed robotics companies in Hong Kong, Dobot trades at a price-to-sales ratio of about 17–19 times, while UBTech Robotics trades above 30 times. Estun Automation trades at about four to five times. But these companies make complete robots. Direct Drive Tech is an upstream supplier of power modules and components, which makes it theoretically harder for it to command the valuation premium enjoyed by complete robot makers.
Direct Drive Tech’s founder, chairman, and CEO, Zhang Di, is only 31. He received a bachelor’s degree in mechanical engineering from Beijing Institute of Technology in 2016, then studied robotic systems and control engineering at the Hong Kong University of Science and Technology.
Before the offering, Zhang controlled 41.3% of voting rights through Worang Zhonghe, which held 21.96%; Worang Zhongchuang, which held 15.92%; and Guyuan Investment, which held 3.42%.
President Liu Xuyang is 33. He holds a bachelor’s degree in new energy materials from the University of Electronic Science and Technology of China and a doctorate in electrical and electronic engineering from the University of Hong Kong. Before joining Direct Drive Tech, he was general manager of Ironnovation, a provider of integrated motor and drive control solutions. In 2022, he joined Direct Drive Tech with Ironnovation’s core technical team.
CFO Zhang Hongbo joined only in May 2025. A capital markets veteran, he was brought in to handle finance and capital operations for the IPO.
Direct Drive Tech has spent six years building a direct drive module business toward a Hong Kong listing. It is also riding a sector tailwind as these modules replace conventional alternatives. According to 36Kr, China’s direct drive module market is expected to grow at a compound annual rate of 48.6% from 2026 to 2030. Its next test? IPO pricing.
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by Peng Xiaoqiu for 36Kr.
Note: HKD, RMB figures are converted to USD at rates of HKD 7.84 = USD 1 and RMB 6.80 = USD 1 based on estimates as of July 7, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.