The Secret Behind Yushu's 60% Gross Profit Margin

Ask AI · How does Wang Xingxing’s frugal management achieve high gross margins at Yushu?

Text | Qiu Xiaofen

Editor | Su Jianxun

On March 20th, Yushu released its IPO prospectus, and one data point caught our attention — by the third quarter of 2025, Yushu’s overall gross profit margin reached 59.5%.

Yushu’s business can be simply divided into three parts: quadruped robots, humanoid robots, and robot components (such as dexterous hands, collaborative robotic arms, laser radar, etc.).

Among these, the gross profit margins are 55.5%, 62.9%, and 60.4%, respectively. Except for early-stage humanoid robots, the margins of the other businesses have steadily increased over the past four years.

△Yushu’s gross profit margins across different businesses over the past four years, source: Yushu IPO prospectus

A 60% gross margin — what does this mean for a robotics company?

In the robotics industry, only two publicly listed companies, UBTECH and Yuejiang, have gross margins of 30% and 43%, with an average of about 37% over the past three years. Yushu’s margin is 1.5 times that.

Compared to the consumer electronics sector, Yushu’s gross margin surpasses Apple — in Q1 2026, Apple’s gross margin was 48.2%, which was a “record high.”

△Yushu’s gross profit margin vs. listed companies in the robotics field (UBTECH, Yuejiang) over the past four years

Gross margin is calculated as: Gross Margin = (Operating Revenue - Cost of Goods Sold) / Operating Revenue × 100%. This figure is directly related to a company’s operational efficiency.

In today’s uncertain robotics industry, why can Yushu achieve such a “terrifying” gross margin?

Wang Xingxing’s Management Philosophy: Extreme Cost Control, Extreme Simplicity

A 60% gross margin is primarily related to the founder Wang Xingxing’s strong cost control.

“Wang Xingxing is very frugal,” several Yushu employees told Intelligent Emergence.

One employee shared a story — once, Wang Xingxing accidentally opened the remote control batteries in the conference room, then immediately tagged everyone in the company group chat, “Don’t use this brand of batteries, they are not cost-effective.”

Another employee familiar with Wang Xingxing told Intelligent Emergence that Wang’s style is also very simple; internally, it is known that he “has no house, no car,” lives in an apartment near the company, and walks to work every day.

The founder’s style has also influenced the company’s culture.

Intelligent Emergence visited Yushu’s office building in Hangzhou, which was extremely simple in decor. Insiders said this building used to be a state-owned enterprise office.

△Yushu’s office, source: photo by Intelligent Emergence

Beyond embedding frugality into the company’s DNA, truly reducing costs hinges on Yushu’s commitment to full-stack in-house R&D of core robot components.

The IPO prospectus shows that Yushu’s self-developed technology can be divided into the following parts:

① Core algorithms such as embodied intelligence, reinforcement learning, and motion control; ② Intelligent systems including heat dissipation, energy management, motor drive; ③ Core components like motors, reducers, dexterous hands, laser radar.

By developing key components in-house, Yushu benefits from having a large number of reusable technology modules across different product lines (such as joint drives, mechanical structures, battery management, software algorithms).

This strategy not only significantly reduces repetitive R&D costs but also accelerates the transition from prototype to mass production.

Cost sensitivity is also integrated into Yushu’s manufacturing process.

While many quadruped and humanoid robot manufacturers adopt ODM outsourcing to catch up with commercialization, Yushu uses self-built production lines combined with external collaboration.

Specifically, for some core parts and final assembly, Yushu builds its own production lines. For non-core parts and standardized, market-supplied processes (like PCBA assembly, injection molding), Yushu outsources processing.

This approach helps Yushu balance technological iteration with cost optimization.

In the robotics market, due to unpredictable demand and high unit prices, inventory often becomes a hidden risk threatening cash flow.

Yushu’s IPO prospectus indicates that by 2025, the sales rate for quadruped robots will reach 86%, and humanoid robots 96%. For example, out of 3,700 robots produced in the factory, 3,551 were sold, with only a small amount converted into inventory.

This phenomenon is driven by Yushu’s strategy of “sales-driven production + safety stock”. They produce based on sales plans to avoid inventory buildup and capital lock-up. Additionally, they maintain a certain inventory buffer to handle sudden orders and smooth production fluctuations.

To ensure cross-departmental coordination, Yushu has implemented a dynamic coordination mechanism — monthly meetings involving sales, production, and procurement to synchronize information and make collaborative decisions, aligning production plans with market demand.

Under these measures, product pricing somewhat reflects cost reductions.

From January to September 2025, Yushu’s quadruped robot sold at an average price of 27,200 yuan, down 15.8% on average; humanoid robots averaged 167,600 yuan, down 35.7%.

A robotics industry insider told Intelligent Emergence that Yushu’s quadruped robot costs are even lower than some competitors’ selling prices — “Compared to other new players, Yushu’s strength lies in its accumulated R&D and manufacturing experience.”

△Sales volume and unit price trends for Yushu’s quadruped and humanoid robots

The IPO prospectus also highlights two noteworthy metrics.

In the first three quarters of 2025, Yushu’s sales expense ratio was only 6.5%, half of UBTECH and Yuejiang — in comparison, Xiaomi’s sales expense ratio is about 7.3%, Apple is 6.6%, and the industry average for fast-moving consumer goods is 20%-30%.

The sales expense ratio indicates how much a company spends on sales activities for every 100 yuan of revenue — a lower ratio signifies higher sales efficiency.

In terms of management expense ratio, Yushu’s is only 4.2%, one-sixth of the industry average.

Yushu explains that this is partly due to a lean management structure. Additionally, the IPO prospectus states that “the company and its subsidiaries do not own any real estate.” Leasing reduces depreciation and amortization costs.

Embedding cost consciousness into every aspect of operations, from management to R&D to manufacturing, has laid the foundation for Yushu’s high gross margins.

A Leap Forward During the Spring Festival Gala

However, to further improve gross margins, continuous revenue growth is essential.

If we consider development stages for Yushu, the 2025 Spring Festival Gala marks a significant milestone.

In terms of revenue, according to the prospectus, Yushu’s income did not grow steadily but saw a sharp increase in 2025 — in the first three years (2022-2024), revenue hovered around 100 million to 300 million yuan, at times only one-tenth of UBTECH’s or half of Yuejiang’s.

But in the first nine months of 2025, Yushu’s total revenue surged to 1.15 billion yuan. Insiders told Intelligent Emergence that, including the peak sales season in Q4, Yushu’s full-year revenue in 2025 is close to 2 billion yuan.

These revenues are reflected in actual products: in 2025, Yushu sold over 18,000 quadruped robots and 5,500 humanoid robots (H1, G1).

The rapid sales growth and profitability turnaround in 2025 are largely attributed to seizing the opportunity of the Spring Festival Gala. A senior industry expert analyzed to Intelligent Emergence that Yushu’s revenue growth drivers in 2025 are twofold —

One, converting the massive traffic from the Gala into sales of humanoid and quadruped robots; two, Yushu’s humanoid robots opened up new consumer scenarios, including commercial performances and exhibition guides.

△"YangBOT"

In addition to these consumer market expansions, Yushu has also established a stable shipment baseline.

According to the IPO prospectus, Yushu’s robots are mainly deployed in two major sectors: in industry-level markets, primarily inspection, surveying, firefighting, rescue, and public services (like smart cities); in consumer markets, mainly scientific research and education.

△Sales volume, production, and sales rate of Yushu’s humanoid and quadruped robots

It is also noteworthy that the prospectus reveals an often-overlooked fact — besides robots, Yushu’s self-developed robot components have become a significant revenue contributor.

In the first three quarters of 2025, core parts (dexterous hands, collaborative robotic arms, laser radar) contributed over 60 million yuan, once accounting for up to 18% of total revenue in 2022.

In summary, Yushu’s impressive 60% gross margin hinges on one key factor — rapidly increasing revenue.

Further analysis shows that in 2025, they made three crucial moves: leveraging the Spring Festival Gala to boost robot sales, maintaining a solid core business, and developing new revenue streams from core components beyond robots.

Perhaps, in programs like “YangBOT” and “WuBOT,” Yushu’s robots showcase technological prowess, but another less-known competitive advantage is operational efficiency.

And the essence of operational efficiency largely stems from founder Wang Xingxing’s extreme control over costs and revenue.