Chinese robots are on a roll. Morgan Stanley shares its favorite plays

Chinese robots are on a roll. Morgan Stanley shares its favorite plays

China's robotics industry is experiencing a surge in growth, with the country leading the global market in installations and production. According to Morgan Stanley analysts, China's increasing adoption of robots, coupled with advancements in generative artificial intelligence, positions the nation as a leader in the global robotics sector. The bank's recent report highlights two Chinese companies—Inovance and Geekplus—that are set to benefit from this growth.

In 2024, China installed a record high of 295,000 industrial robots, outpacing global installations by a significant margin. This trend is expected to continue, with the International Federation of Robotics forecasting a 6% global growth rate in 2025, reaching over 575,000 units. China's domestic suppliers, including Inovance and Geekplus, are gaining traction in the market, with Inovance being a well-established supplier of industrial automation products and Geekplus focusing on automated robot systems for warehouses.

Morgan Stanley favors Geekplus, noting its strong international presence and customer base, which includes major corporations such as Unilever, Walmart, and Adidas. The company is expected to reach profitability this year and benefit from industry growth of over 30% annually through 2029. Geekplus's ability to charge 30% less than competitors and its preparation for U.S. tariffs position it as a strong contender in the market.

Inovance, another Morgan Stanley favorite, is a market leader in factory automation. The company's EV control systems are expected to see better-than-expected sales this year, which could support its stock performance. Analysts at HSBC have upgraded Inovance to a buy rating, expecting the company to grow its earnings by 22% annually through 2027.

Both Inovance and Geekplus are poised to benefit from China's growing industrial automation market, which is expected to resume growth in 2026-27 after two years of downturn. As the demand for automation products increases, these companies are well-positioned to capitalize on the market's potential.