Assessing Ubtech Robotics (SEHK:9880) Valuation After Its HK$3.1 Billion Follow-On Equity Offering

Ubtech Robotics (SEHK:9880) has just wrapped up a HK$3.1 billion follow on equity offering at around HK$98.8 a share. This move reshapes its capital base and raises fresh growth capital.

See our latest analysis for Ubtech Robotics.

Since the follow on was first filed in late November, Ubtech Robotics' share price has risen to HK$116.1. The strong year to date share price return of 119.06% suggests momentum is still building, despite a softer 1 month share price return of 12.58% and a more modest 1 year total shareholder return of 33.07%.

If this capital raise has you watching the broader robotics and automation theme, it may be worth exploring other high growth tech and AI names through high growth tech and AI stocks.

With revenues growing fast but losses still significant, and the stock trading about one third below analyst targets yet above some intrinsic estimates, is Ubtech Robotics now a buying opportunity, or is the market already pricing in its future growth?

Price-to-Sales of 34.5x: Is it justified?

Ubtech Robotics last closed at HK$116.1, and its current valuation on a price-to-sales basis looks stretched compared to both peers and the wider industry.

The price-to-sales (P/S) ratio compares the company’s market value to its revenue, which is useful for high growth businesses that are not yet profitable. For a fast scaling robotics and automation player with negative earnings, investors often fall back on sales multiples to judge how much future growth is already embedded in the share price.

In Ubtech Robotics' case, the market is paying 34.5 times sales, while the Hong Kong Machinery industry trades at around 0.8 times and direct peers at roughly 13.7 times. Against an estimated fair P/S ratio of 5.2 times, the current multiple signals a very rich growth premium that could compress sharply if revenues or sentiment disappoint.

Explore the SWS fair ratio for Ubtech Robotics

Result: Price-to-Sales of 34.5x (OVERVALUED)

However, stretched valuation and ongoing heavy losses mean any slowdown in revenue growth or weaker sentiment could trigger sharp multiple compression.

Find out about the key risks to this Ubtech Robotics narrative.

Another View: Our DCF Fair Value Check

Our SWS DCF model points to a fair value of about HK$108.65 per share, slightly below the current HK$116.1 price. This suggests Ubtech Robotics may be modestly overvalued, though not dramatically so. If growth exceeds expectations, this small premium could still prove reasonable.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Ubtech Robotics for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 906 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Ubtech Robotics Narrative

If you see the numbers differently or prefer to examine the data yourself, you can build a complete narrative in just a few minutes: Do it your way.

A great starting point for your Ubtech Robotics research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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