Robot Stocks Ignite After a Long Lull... Could This Signal a Trend Reversal?

Sideways Market Since Q2, Urgent Need for Upward Catalyst
Intense Focus on Sector Leader Rainbow Robotics

Robot stocks, which had been fluctuating within a narrow range, surged dramatically for the first time in a while. This rally was sparked by the growing attention on humanoid robots as beneficiaries of the government’s economic growth strategy and the so-called “Yellow Envelope Act.” Market watchers are now focusing on whether leading robot stocks, such as Rainbow Robotics, will be able to signal a trend reversal.

According to the Korea Exchange on August 26, Rainbow Robotics closed at 289,500 won, up 10.08% from the previous day. Other robot stocks, including Konic Automation (which hit the upper limit), Hyzen R&M (up 21.71%), Robotis (up 19.31%), and EM&I (up 13.95%), also posted double-digit gains, making the robot sector the best-performing theme among all sectors.

The surge in investor sentiment was fueled by expectations of policy-driven benefits. On August 22, the government announced its economic growth strategy, declaring its ambition to become a “global leader in physical AI.” The government also revealed plans to develop and commercialize industrial-specialized humanoids, which led to a buying spree in related robot stocks. The aim is to become one of the world’s top three humanoid powers within five years by actively introducing humanoid robots across logistics, manufacturing, construction, and other industries.

The recent passage of the “Yellow Envelope Act” (the amendment to the Trade Union and Labor Relations Adjustment Act), led by the ruling party, is also believed to have contributed to the stock rally. With the implementation of the Yellow Envelope Act, the scope of employers and the subjects of labor disputes will be expanded, and companies’ ability to claim damages against striking workers will be limited. This has fueled expectations that companies may adopt industrial robots or humanoids in advance to mitigate such risks. In fact, online communities focused on robot stocks were dominated by posts viewing the Yellow Envelope Act as a catalyst for stock price increases.

Since April, both individual robot stocks and the overall sector have been moving sideways, desperately in need of a new catalyst for price appreciation. Even Rainbow Robotics, the sector’s leading stock, saw its price halved after reaching an all-time high of 429,000 won in February, boosted by acquisition news from Samsung Electronics. With no clear leader yet in the domestic humanoid market, there is growing talk about the need to “separate the wheat from the chaff” among stocks that could lead the next robot rally.

Among them, Rainbow Robotics is receiving the most attention from both the market and the industry. With a market capitalization of about 5.6162 trillion won, it is the largest among domestically listed robot stocks. Currently, Rainbow Robotics is supplying its humanoid product, represented by “RB-Y1,” to various clients such as Toyota and MIT, while also working to expand its product lineup. Rather than focusing on general-purpose bipedal humanoids, the company specializes in developing wheeled, special-purpose humanoids optimized for clients’ specific processes.

IM Securities analyst Lee Sangsoo stated, "For Samsung Electronics’ plan to deploy humanoids in semiconductor production facilities, there is a growing need for humanoids with such structures, and the capabilities of the final assembly companies will be crucial." He raised his target price for Rainbow Robotics from 170,000 won to 359,000 won.

Rainbow Robotics was also named as a participant in the “K-Humanoid Alliance,” announced by the Ministry of Trade, Industry and Energy in May this year. This alliance was established to pool the capabilities of Korean robotics companies to develop humanoids. Lee noted, “Among the listed companies participating, Rainbow Robotics and Robotis are the ones with notable competitiveness in humanoids,” adding, “Expectations for increased support in the future will also serve as a momentum driver for Rainbow Robotics’ stock price.”