Analysis of Roborock's Hong Kong Listing and Sales Expense Pressure

According to financial data, Roborock’s sales expense ratio has shown a continuous upward trend. From 2019 to 2024, this indicator climbed from 8.41% to 24.84%, setting a new historical high in 2024 [1][2]. Specifically, advertising and marketing expenses increased from RMB 833 million in 2022 to RMB 1.923 billion in 2024, accounting for 12.6% and 16.1% of total revenue respectively [1].

This surge in expenses is mainly due to the following factors:

. In 2024, Roborock’s overseas sales revenue reached RMB 11.918 billion, an increase of 71.2% compared to 2023 [1]. To build brand awareness in markets such as Europe, America, and Southeast Asia, the company had to invest heavily in marketing promotions, including hiring local spokespersons and conducting diversified advertising placements.

. The robotic vacuum cleaner industry has entered the “era of three highs”—high growth, high investment, and high competition. Traditional strong brands such as Ecovacs and iRobot continue to exert their strength, while emerging brands like MOVA are also quickly seizing market share [1]. To maintain its market position, Roborock was forced to increase marketing investment.

. In 2025, iRobot officially exited the Chinese market, and its approximately 60% market share needs to be filled. This is both an opportunity and a challenge, requiring Roborock to increase marketing efforts to take over this market space [1].

Roborock chose Hong Kong stocks as a new financing platform mainly based on the following strategic considerations:

. The current international trade environment is complex and changeable. Listing in Hong Kong helps the company build a more stable capital structure and reduce exposure to single-market risks.

. As an international financial center, Hong Kong’s listing status helps enhance Roborock’s brand awareness and credibility in overseas markets, providing endorsement for subsequent overseas business expansion.

. Listing in Hong Kong will open up new financing channels, providing financial security for the company’s continuous investment in R&D and marketing.

According to industry practices, funds raised from Hong Kong IPOs are usually allocated in the following proportions:

• Product R&D Investment
  : Approximately 35%-40% is used for technology R&D and new product development
• Marketing and Brand Promotion
  : Approximately 15%-20% is used for market expansion and sales team building
• Operating Capital Supplement
  : Used for daily operations and liquidity management

This means that the financing from the Hong Kong listing will directly provide financial support for Roborock’s sales expense expenditures, reducing the squeeze on its own cash flow and profits.

In the short term, listing in Hong Kong can indeed bring the following positive impacts to Roborock:

Listing financing will provide a one-time large capital injection, so that the company does not need to rely entirely on operating profits to support high marketing expenditures. According to the company’s announcement, part of the raised funds will be clearly used for “marketing, brand promotion and sales team expansion” [3], which will effectively alleviate the current profit pressure.

By replacing part of debt financing with equity financing, the company’s financial costs will decrease. Roborock’s current current ratio is 2.76, and its financial situation is relatively stable [4]. Listing in Hong Kong will further strengthen its balance sheet, creating more space for subsequent marketing investments.

Listing in Hong Kong itself is an effective brand exposure, which helps to enhance the company’s brand awareness in overseas markets. The improvement of brand strength will bring natural traffic growth, thereby reducing unit customer acquisition costs and indirectly alleviating sales expense pressure.

However, listing in Hong Kong can only provide short-term capital relief and cannot fundamentally solve the structural problem of surging sales expenses:

Roborock’s overseas strategy is irreversible. To achieve the goal of “globalization of Chinese brands”, the company must continuously invest in brand building and channel development in overseas markets. This part of the expenditure has rigid characteristics and cannot be solved once and for all through listing financing.

The competition in the robotic vacuum cleaner industry is becoming increasingly fierce. Brands such as Ecovacs, Xiaomi, and Dreame continue to exert their strength, and there are also strong competitors such as iRobot and Roomba in overseas markets. Even after completing the Hong Kong listing, Roborock still needs to maintain a high level of marketing investment to cope with competition.

From historical data, Roborock’s sales expense ratio has shown a continuous upward trend. Even if it reached as high as 24.84% in 2024, this ratio may continue to rise under fierce market competition. Listing in Hong Kong can only provide phased financial support and cannot reverse the upward trend of the expense ratio.

Investors in the Hong Kong market generally pay attention to the company’s profitability. Continuously high sales expense ratios may arouse investors’ concerns about the company’s profit prospects, thereby affecting the valuation level and subsequent financing capabilities.

Roborock’s Hong Kong listing

, but . The marketing demand for overseas market expansion and the intensification of industry competition determine that high sales investment will be a long-term proposition.

Indicator	Current Level	Key Focus
Sales Expense Ratio	24.84% (2024)	Whether an inflection point appears
Overseas Revenue Share	~50%+	Can the growth rate be sustained
Gross Margin	47.9%-54.1%	Can it cover marketing costs
Net Profit Margin	9.07%	Can it stabilize and rebound

1. Market Risk
   : If overseas market demand is lower than expected, high marketing investment may not translate into corresponding revenue growth
2. Competition Risk
   : Intensified industry competition may lead to continuous climbing of marketing expenses
3. Exchange Rate Risk
   : Overseas business is denominated in US dollars, and exchange rate fluctuations may affect actual income
4. Valuation Risk
   : After listing in Hong Kong, profitability will become a key support factor for valuation

To sum up, Roborock’s Hong Kong listing is an important strategic measure to address current challenges. However, the company still needs to continue to work hard in improving product competitiveness, optimizing marketing efficiency, and achieving scale effects to achieve sustainable high-quality development.

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[1] Nanfang+ , Surging Sales Expenses, Addressing Geopolitical Risks to Layout Overseas, Roborock Submits Listing Application to HKEX, https://www.nfnews.com/content/J3WYO9raoz.html

[2] Sina Finance , Roborock’s Hong Kong Listing: Sales Expense Ratio Hits New High, Net Profit Continues to Be Under Pressure and Causes Controversy, https://finance.sina.com.cn/stock/stockzmt/2025-07-01/doc-infcxncv5649957.shtml

[3] Yahoo Finance , Minglue Tech Starts Offering Shares Today with an Entry Fee of HK$5696.88, Tencent Holds Nearly 26% Stake, https://hk.finance.yahoo.com/news/明略科技招股-02718-HK-入场费-003909925.html

[4] Jinling API Data , Company Financial Overview 688169.SS