China's second World Humanoid Robot Games demonstrated significant progress in humanoid robots in mobility, speed and power, dexterous movements and autonomy, while raising the question of whether China's lead over the US in embodied AI is widening and when the US will host its first robot games, Morgan Stanley said in a report.
The broker noted that Tiangong Ultra won the large-category 100-meter final in 8.64 seconds, faster than Jamaican sprinter Usain Bolt's world record of 9.58 seconds and far ahead of its winning time of 21.5 seconds last year. The improvement came from reducing torso and waist mass, as well as upgrading motors and control systems. Humans took about a century to shorten the 100-meter record by around 10%, while robots cut the humanoid robot record by about 60% within 12 months.
Chinese suppliers accounted for more than 97% of global humanoid robot shipments in 1H26, with the related market spiking 272% YoY and Chinese customers accounting for more than 85% of demand. Morgan Stanley's China industrial team recently raised its 2026 China shipment forecast to 50,000 units from 28,000 units and expected shipments to reach 446,000 units by 2030. YUSHU TECHNOLOGY (688836.SH), the first humanoid robot manufacturer listed in Mainland China, surged about 460% on its Shanghai debut, with valuation nearing USD50 billion, before later retreating about 45% to a market cap of around RMB190 billion, or about USD28 billion.
The broker believed shipment share is not the correct scoreboard, as the real gap lies in humanoid robot capabilities. The US still leads in frontier models, VLA development and simulation, while China controls scalable physical inputs and supply chains. The key question is whether the US software lead can be maintained long enough, as every fleet deployed in China is collecting real-world data that may narrow the software gap. YUSHU TECHNOLOGY allocated 48% of IPO proceeds to model R&D, indicating where integrators see the bottleneck.
Beijing used the five-day event to portray humanoid robots more as athletes than job replacers. State media described robots, AI and innovative drugs as the "new new trio" following EVs, batteries and solar energy, and the games themselves also served a promotional role. The broker believed gaining social acceptance for deploying humanoid robots may be as important as technological progress.
The report's China humanoid robot value chain covers brain systems, actuators, motors, reducers, bearings, structural components, sensors, batteries and integrators, involving companies including Huawei, MIDEA GROUP (00300.HK), XIAOMI-W (01810.HK), BYD COMPANY (01211.HK), GAC GROUP (02238.HK), BABA-W (09988.HK), XPENG-W (09868.HK), JOYSON ELEC (00699.HK), ROBOSENSE (02498.HK), LENS (06613.HK), SANHUA (02050.HK), IFLYTEK (002230.SZ), HORIZONROBOT-W (09660.HK), HESAI-W (02525.HK), BIDU-W (09888.HK), TENCENT (00700.HK), UBTECH ROBOTICS (09880.HK), CATL (03750.HK) and Hon Hai (2317.TW).
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