31-year-old founder steers Direct Drive Tech toward Hong Kong IPO
Direct Drive Tech, a Chinese robotic joint manufacturer, has cleared its listing hearing with the Hong Kong Stock Exchange for a Main Board IPO. The 31-year-old founder, Zhang Di, is steering the company, which specializes in direct drive power modules for consumer robots, toward issuing up to 122 million H shares with CITIC Securities as the sole sponsor. The company has seen remarkable revenue growth, from RMB 17.54 million in 2023 to RMB 282 million in 2025, driven by a surge in demand from consumer robot makers adopting direct drive technology. Despite this growth, Direct Drive Tech has reported net losses and negative operating cash flow for three consecutive years, reflecting a business model focused on high-volume component sales with thin margins. The IPO aims to capitalize on its leading position in China’s consumer robot direct drive power module segment, where it holds a 61.1% market share.
Direct Drive Tech’s impending Hong Kong IPO highlights several critical trends in Asia’s tech ecosystem, particularly within the robotics and advanced manufacturing sectors. The company’s focus on specialized direct drive power modules, rather than complete robots, underscores a growing maturity in the supply chain for complex hardware. This specialization allows companies to dominate niche segments, as Direct Drive Tech has done in consumer robot direct drive modules, even while facing intense competition in the broader power module market. Its rapid revenue growth, fueled by the increasing adoption of direct drive technology in consumer robots like vacuum cleaners and lawn mowers, signals a significant shift in manufacturing practices across the region.
However, the company’s persistent net losses and thin gross margins for its core module business reveal the challenges of scaling a hardware components venture. The reliance on high volume and cost competition, coupled with customer and geographic concentration risks, points to the inherent pressures on upstream suppliers in a rapidly evolving market. The IPO will test investor appetite for a high-growth, yet low-margin, component provider in the robotics space, potentially setting a precedent for similar specialized manufacturers seeking public funding in Hong Kong and beyond. The involvement of major investors like Lenovo and Xpeng also indicates a strategic interest in securing key components for the future of robotics and smart manufacturing.
