iM Securities said on the 19th that Rainbow Robotics(277810) is expected to continue serving as a key partner in Samsung Electronics' humanoid business. Despite concerns over Samsung Electronics' potential to develop a standalone humanoid, analysis noted that cooperation between the two companies is translating into actual results, with 27% of second-quarter revenue this year coming from Samsung Electronics. The firm maintained its "buy" rating but cut the target price to 650,000 won from 915,000 won. The previous session's closing price was 470,000 won.
Lee Sang-su, an analyst at iM Securities, said, "Rainbow Robotics' corporate value consists of two elements: synergy with Samsung Electronics and being the only listed humanoid company in Korea," adding, "These market expectations are being reflected in the numbers in the second-quarter results."
In the second quarter of this year, 3.26 billion won, or about 27% of Rainbow Robotics' revenue, came from Samsung Electronics. On a first-half cumulative basis by product, mobile humanoids accounted for 8.65 billion won, or 40.5% of the total, and collaborative robots were 4.5 billion won, or 21.1%. Other revenue, including quadruped walking robots and logistics robots, accounted for 30.1%.
The concerns over the recently raised "Samsung Electronics standalone humanoid development rumor" were deemed excessive. Samsung Electronics launched the RX Business Office, a new humanoid development organization, last month. This prompted speculation that Samsung Electronics could exclude Rainbow Robotics and proceed with in-house development.
The analyst said, "The role of the RX Business Office is to bring together humanoid research and development personnel and establish development directions as a control tower," adding, "This cannot be taken as grounds for passing over Rainbow Robotics."
The amount of capital Samsung Electronics has injected into Rainbow Robotics so far was also cited as a basis. Samsung Electronics invested about 350 billion won through two paid-in capital increases and the exercise of a call option in Jan. last year. iM Securities found that a significant number of Rainbow Robotics personnel have been dispatched to Samsung Electronics' existing humanoid development organization.
The analyst said, "With cooperation between the two companies yet to be finalized, there are not many grounds to simply treat prior investments as sunk costs."
Even compared with Chinese humanoid maker Unitree Robots (Unitree Robots), Rainbow Robotics was assessed to have differentiated strengths. Unitree is ahead of Rainbow Robotics in scale and profitability, but the average selling price (ASP) of humanoids is dropping rapidly due to the expansion of entry-level models and price discounts.
By contrast, Rainbow Robotics has secured a captive demand source in Samsung Electronics, leading to analysis that it can maintain relatively higher product prices if supplies of humanoids for manufacturing processes ramp up. Before the humanoid production base in the Americas that Samsung Electronics is pursuing goes into full operation, Rainbow Robotics' Sejong plant is likely to be used to produce volumes for the Samsung Group.
From the third quarter, earnings growth is also expected to accelerate. While supplies of the "RB-Y1," a dual-arm mobile robot for Samsung Electronics, are steadily increasing, the 1,000-unit batch of quadruped walking robots to be supplied to the Army could be reflected in sales as early as the third quarter. iM Securities estimated Rainbow Robotics' third-quarter revenue at 21.92 billion won, up 110% from a year earlier.
The analyst assessed that, as global humanoid companies are focusing more on expanding production capacity and top-line growth than on immediate profit, the key factor determining Rainbow Robotics' future corporate value will be how quickly actual humanoid revenue grows through collaboration with Samsung Electronics, rather than the current size of profits.