Analysis of LeDong Robotics' Gross Margin Decline

Based on currently available market information, I analyze LeDong Robotics’ (KY 4569) gross margin drop to 23% and its low-price strategy as follows:

LeDong Robotics is an enterprise focusing on robot-related products, with main businesses including

and [0]. According to search results, the company achieved a 26% stock price increase in 2024, indicating market recognition of its growth potential [0].

• Visual Perception Products Division
• Lawn Mowing Robot Division (one of the core businesses)
• Expected revenue to reach NT$1.89 billion in FY2025, a year-on-year increase of 107.8% [0]
• Expected revenue growth of 49.3% in FY2026 [0]

The drop in gross margin from a higher level to 23% may be caused by the following factors:

Competition in the robot industry has intensified, and enterprises generally adopt low-price strategies to seize market share. According to industry data, the cost of current advanced humanoid robot prototypes ranges from $150,000 to $500,000 per unit, which needs to be reduced to $20,000 to $50,000 per unit to compete with manual labor [1]. This cost pressure forces enterprises to cut prices for promotion.

• There are over 150 robot enterprises in the Chinese market, and the number continues to grow [1]
• Many enterprises launch similar products, leading to homogeneous competition
• Leading enterprises like UBTech plan to increase production to 5,000 units in 2026 and 10,000 units in 2027 [1]

The company is in a period of rapid expansion, and the pressure of fixed cost amortization during the process of improving capacity utilization will affect gross margin performance in the short term.

• Rapid market share growth
  : Low-price strategy can effectively attract price-sensitive customers
• Economies of scale
  : Sales growth helps spread unit costs
• Brand exposure
  : Improves market awareness and customer base

1. Profit pressure
   : A gross margin of 23% is at a low level, limiting net profit space
2. Insufficient R&D investment
   : Low-price strategy may compress R&D expenditure, affecting long-term competitiveness
3. Low customer loyalty
   : Price-driven customers have low switching costs
4. Industry bubble risk
   : The National Development and Reform Commission has warned of possible bubbles in the robot market [1]

• The humanoid robot market is expected to reach $380 billion by 2030 and could hit $5 trillion by 2050 [1]
• Chinese policies support the development of the robot industry
• AI technology progress drives product performance improvement

• Whether gross margin can stabilize and rebound
• R&D investment ratio
• Customer retention rate and repurchase rate
• Quality of order growth (not just quantity growth)

• Continuous intensification of industry competition
• Fast technology iteration speed
• Macroeconomic fluctuations affecting enterprise procurement decisions
• Valuation may be high due to market enthusiasm

Investors are advised to closely monitor the gross margin trend, order structure improvement, and R&D investment effectiveness in the company’s financial reports. In the current competitive environment, relying solely on low-price strategy is difficult to maintain long-term competitive advantages; enterprises need to find a balance between cost control and technological innovation.

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[0] Yahoo Finance - LeDong Robotics (KY 4569) Financial Data Chart (https://hk.finance.yahoo.com)
[1] CNBC - “Elon Musk envisions humanoid robots everywhere. China may be the first to make it a reality” (https://www.cnbc.com/2025/12/30/elon-musk-wants-robots-everywhere-china-is-making-that-a-reality.html)