Unitree at 5.6 times offer, Hui Ka Yan for life: two prints from one capital machine

Solar has already run this experiment. Chinese module prices fell by half in 2023 and another 25% in 2024 ^[8], which compounds to roughly 62.5% below where they started ^[9]. That happened in a market where Chinese producers hold more than 90% of global supply, and their profits were eviscerated anyway ^[7]. Module demand was real and growing the whole time. The margin went regardless, because the capital funding the capacity was not priced on returns.

Batteries repeated it: global capacity, China-dominated, reached almost three times actual demand ^[10]. In cars, Brad Setser of the Council on Foreign Relations, previously at the US Treasury, puts Chinese capacity at 55 million units, close to two-thirds of global demand and rising quickly ^[11].

Each of those buildouts at least had a product with paying customers. Humanoids do not yet. According to Semafor, nobody really knows whether there is a commercial application for the machines ^[16], and what has captivated the Chinese public is spectacle: Unitree's "Superman" model out-accelerates Usain Bolt and leaps six feet six inches ^[17]. Behind it sit more than 150 companies making similar products, 50 of which have listed or plan to ^[12], one in three of the field ^[14]. A Beijing venture capital executive told the Financial Times that humanoid robotics is approaching the peak of the hype cycle ^[15]. For the pre-IPO holders sitting on windfall gains ^[16], the exit is the next listing, and the next listing is bidding for the same buyers as the other 49.

The political leg works the same way. Semafor's reading is that Hui Ka Yan, whose Evergrande collapsed under more than $300 billion of liabilities ^[4], was not a deviation from the development model but its instrument: real estate peaked at 25% of the Chinese economy ^[5] and left up to 90 million vacant apartments ^[6], built by developers who reasonably assumed Beijing would not spoil its own party. Desmond Shum, author of Red Roulette, posted on X that "the system created the incentives, rewarded the behavior, and profited from the boom" ^[19]. The bill for that arrangement has landed personally, and repeatedly. GOME's Huang Guangyu was jailed for bribery and insider trading after the 2000s retail boom ^[20]. Wu Xiaohui, owner of New York's Waldorf Astoria, was jailed when the outbound investment wave stopped ^[21]. Jack Ma escaped with a large fine on Alibaba and the loss of perhaps half his assets ^[22].

Wang Xingxing's roughly $16 billion is paper ^[2], and Semafor's point is that private Chinese fortunes of this kind are precarious ^[24]. The more useful number for outside money is the entry price: a 460% first-day gain ^[1] means anyone buying at the close paid 5.6 times the offer ^[23]. Pre-IPO investors have already been paid for the overcapacity risk. Whoever bought at 5.6 times owns it.