Growth and Investments in Yushu’s Third-Quarter Report

Yushu Technology’s third-quarter report for 2026 should not be interpreted merely as a “report card” showing a “sharp rise in revenue.” Revenue continued to grow rapidly in the third quarter, but net profit attributable to shareholders fell year-over-year; while net profit attributable to shareholders rose significantly in the first three quarters, net profit excluding non-recurring items declined. These seemingly contradictory sets of data actually point to the same issue: following the expansion of its business scale, can the company translate its investments in R&D and operations into sustained profitability?

Yushu Technology Co., Ltd. (Stock Code: 688836) has released this report covering the first three quarters of 2026; the quarterly financial statements are unaudited. It is necessary to distinguish between the July–September quarter and the January–September cumulative figures to clearly understand recent trends, rather than using cumulative growth rates to mask the pressures of the current quarter.Yushu Technology Third Quarter Report for 2026

Revenue growth and profit growth are not the same thing.

The amounts in the table are converted to 100 million yuan. Looking at revenue alone, the year-over-year growth rate for the third quarter exceeded the cumulative growth rate for the first three quarters, indicating that business expansion remained strong in the most recent quarter. However, while revenue grew by 69.93%, net income attributable to shareholders actually declined by 17.37%, indicating that the increase in revenue did not translate into a proportional increase in net income. Equating “selling more” directly with “improved profitability” overlooks the most noteworthy aspect of this report.

The 270.54% year-over-year increase in net income attributable to shareholders in the first three quarters was also significantly influenced by the comparison base. The company explained that the increase in revenue drove growth in gross profit, while the previous year had included a one-time recognition of a significant amount of equity-based compensation expenses. In other words, the impact of these extraordinary expenses on last year’s profits also served as the backdrop for this year’s high growth rate; therefore, the entire increase cannot be attributed solely to a leap in operational efficiency.

Another figure worth examining in parallel is net profit excluding non-recurring items: for the first three quarters, it was 348.97 million yuan, down 18.78% year-over-year; for the third quarter, it was 105.04 million yuan, down 17.42% year-over-year. While non-recurring items do not equate to future profit commitments, they serve as a reminder to readers that high growth in cumulative net profit attributable to shareholders can coexist with current operational pressures.Key Financial Indicators and Reasons for Changes

R&D is eating into current revenue at a faster rate.

In the third quarter, R&D expenditures accounted for 19.10% of revenue, an increase of 9.82 percentage points year-over-year; for the first three quarters, this ratio was 14.47%. The company attributes the increase in investment primarily to research and development in embodied intelligence, particularly model development and computing power investments related to embodied large language models, as well as the expansion of the R&D team and new product development.Explanation of R&D Expenditures

These figures indicate that Yushu is not only expanding its sales volume but is also significantly accelerating its allocation of R&D resources. For robotics companies, whether robots can perform more tasks and reduce human intervention after hardware delivery may determine their future application potential. Investments in models, computing power, and engineering teams therefore make business sense; however, there remains a gap between these investments and customers’ willingness to pay, due to issues such as stability, deployment complexity, and delivery costs.

We cannot conclude that technological barriers will inevitably emerge in the future simply because R&D is growing rapidly; nor can we attribute the decline in quarterly profits entirely to “proactive investments.” R&D is just one visible factor; product mix, pricing, costs, and other expenses may all influence the results. This quarterly report does not provide sufficient granularity to precisely break down profit fluctuations by specific robot models or customer scenarios.

The quarterly report does not disclose sales volume, average selling price, or revenue from humanoid robots by product; therefore, the company’s overall revenue growth rate cannot be directly equated with the growth rate of the humanoid robot business, nor can shipment volumes be derived from revenue figures. To determine whether growth stems from an increase in the number of customers, changes in unit prices, or adjustments to the product mix, more granular operational data is required. It is more valuable to leave these questions open than to fill in the gaps in the financial statements with industry hype.

An increase in gross profit does not necessarily mean an improvement in the gross profit margin.

Calculated as operating revenue minus cost of goods sold on the consolidated income statement, the gross profit margin for the first three quarters was approximately 54.02%, compared to approximately 59.75% in the same period last year, representing a decrease of approximately 5.73 percentage points. The gross profit margin presented here is calculated based on financial statement line items and does not represent the product-level gross profit margin disclosed separately by the company. Although gross profit may still increase as the revenue base expands, the gross profit margin per yuan of revenue has changed.Consolidated Income Statement

This change is best viewed as the starting point for further observation rather than direct evidence of a price war or a decline in technological competitiveness. If the proportion of low-margin products increases in the future, similar results may occur; similarly, if improvements in unit costs lag behind price reductions, this could also squeeze gross profit margins. Without corresponding disclosures regarding product mix, selling prices, and unit costs, no single interpretation should be taken as definitive.

It is equally important whether expansion can be converted into cash.

Net cash flow from operating activities for the first three quarters was 193.71 million yuan, a year-over-year decrease of 54.69%. The company explained that cash expenditures related to procurement, employee compensation, sales, and R&D increased in line with business growth. At the same time, ending inventory rose from 367.75 million yuan at the end of the previous year to 1.01936 billion yuan, indicating that the tie-up of operating resources is also expanding.Cash Flow and Balance Sheet

An increase in inventory may be intended for stockpiling and delivery, or it may create pressure on inventory turnover; it is impossible to determine which factor is dominant based solely on the balance. A more meaningful follow-up indicator is whether this inventory can be converted into deliveries accepted by customers and whether the corresponding payments can be collected. The company’s report also indicates that it completed its initial public offering (IPO) this quarter, resulting in a significant increase in cash and cash equivalents due to the proceeds raised; therefore, the decline in operating cash flow should not be simplistically interpreted as a “cash shortage,” but the cash generated from financing cannot replace the company’s own ability to generate cash from operations.

Yushu’s quarterly report reflects a phase in which scale expansion and capacity building are proceeding in parallel. Moving forward, it will be worth keeping a close eye not only on how much revenue grows in the next quarter, but also on whether R&D efforts can improve project delivery, whether gross margins can stabilize, and whether the resources allocated to growth can be converted back into cash. Only when these factors gradually come to support one another will the quality of revenue growth become clearer.