Zhuhai Yunzhou is betting that booming defense demand and a growing global market can outweigh years of losses.
By Su Wan
Zhuhai Yunzhou Intelligence Technology, widely regarded as China’s leading developer of unmanned surface vessels (USVs), has revived plans for a Shanghai listing after a failed IPO attempt four years ago, in a move that could make it China’s first publicly listed pure-play USV maker.
The Shanghai Stock Exchange accepted the company’s application for its STAR Market IPO on June 24, with regulators issuing their first round of inquiries on July 7. Yunzhou plans to raise 1.82 billion yuan ($269 million) to expand production and fund research and development.
The listing marks Yunzhou’s second attempt to go public. Its first STAR Market application, submitted in late 2021, was withdrawn in 2022 after regulatory investigations involving its audit firm forced the review process to halt.
The IPO comes as investors increasingly focus on the global market for USVs, which are used in military missions ranging from mine countermeasures and surveillance to anti-submarine warfare, as well as civilian applications including environmental monitoring, marine surveying and emergency response.
According to Research and Markets, the global USV market is forecast to grow from $15.4 billion in 2025 to more than $33.5 billion by 2032, with defense accounting for about 61% of demand.
From environmental monitoring to defense
Founded in Zhuhai in 2010 by Zhang Yunfei and fellow graduates of the Hong Kong University of Science and Technology, Yunzhou began by developing autonomous boats for water quality monitoring before expanding into marine engineering, scientific research and defense.
The company first gained widespread public attention during China’s 2018 Lunar New Year Gala, when a fleet of 81 autonomous vessels performed a coordinated light show near the Hong Kong-Zhuhai-Macau Bridge, demonstrating swarm-control technology to a nationwide television audience.
Since then, Yunzhou has supplied unmanned vessels for environmental monitoring, emergency response and defense. Its boats have been deployed during pollution incidents, flood rescue operations and scientific expeditions, including missions in Antarctica and Qinghai Lake.
The company says its products have been sold in more than 40 countries and regions. In the niche market for environmental monitoring USVs, it claims a 72% global market share.
Yunzhou has also spent more than a decade building its defense business, obtaining the licenses and certifications required to supply military equipment in China. It has delivered hundreds of unmanned vessels for combat, training, and logistics applications, making it one of the country’s few qualified military USV manufacturers.
Strong technology, weak profits
The company says its competitive advantages rest on four pillars: proprietary technology, military qualifications, expanding manufacturing capacity, and overseas sales.
The IPO proceeds will partly fund a high-performance USV industrialization project, with 831 million yuan earmarked to increase production capacity as the company seeks to lower manufacturing costs through larger-scale output.
Yunzhou’s shareholder roster includes state-backed investors such as Zhuhai Sci-Tech Venture Capital and Jinkong Hi-Tech, alongside industrial investors including Huajin Capital and China Merchants Capital.
However, one early investor has already exited. In March 2025, venture capital firm ZhenFund sold its entire 2.25% stake for 58 million yuan, implying a valuation of about 2.58 billion yuan. That represented roughly half the valuation implied by a funding round completed only months earlier, highlighting differing views over the company’s prospects.
Weighing opportunities against risks
Financially, Yunzhou presents a mixed picture.
Revenue rose from 131 million yuan in 2023 to 196 million yuan in 2024 and 244 million yuan in 2025, representing a three-year compound annual growth rate of 36.4%. Sales of unmanned vessels accounted for 92.7% of revenue in 2025, up from 63.7% two years earlier.
But the company remains deeply unprofitable. It recorded net losses of 221 million yuan in 2023, 170 million yuan in 2024 and 188 million yuan in 2025, bringing cumulative losses over the three years to nearly 600 million yuan. By the end of 2025, accumulated retained losses exceeded 1.05 billion yuan.
Management attributes the deficits largely to sustained investment in research and development, share-based compensation and the relatively small scale of its operations. Earlier IPO filings showed R&D spending exceeded 80% of revenue in 2021.
Gross margins have remained around 23.6%, below the industry average, leaving room for improvement if production volumes increase.
For investors, Yunzhou’s appeal lies in exposure to a fast-growing strategic industry, China’s push to develop domestic marine technologies, and the scarcity value of a listed specialist USV manufacturer.
However, the risks are significant. The company has yet to demonstrate sustained profitability, defense procurement can be volatile, margins remain relatively low, and its valuation has fluctuated sharply between financing rounds. Investors will also watch whether early financial backers sell shares after any lock-up period expires.
Yunzhou’s return to the IPO market follows 16 years of developing a business in a sector that barely existed when it was founded. Whether that pioneering position translates into long-term shareholder returns will depend on its ability to convert technological leadership into consistent profits.
Source:
Investorscn.com
