An 80s guy from Fujian has been persevering in the field of agricultural robots and built a globally second-ranked company that went public on the Hong Kong Stock Exchange.
Recently, Guangzhou XAG Co., Ltd. (hereinafter referred to as "XAG"), from Guangzhou, Guangdong Province, plans to list on the Main Board of the Hong Kong Stock Exchange. Huatai International serves as its exclusive sponsor. This is XAG's second attempt to enter the capital market. The company applied for listing on the STAR Market in 2021 but voluntarily withdrew the application in May 2022 due to strategic adjustments.
XAG's products mainly include agricultural drones (such as flying robots capable of automatic spraying and fertilizing), agricultural unmanned vehicles (cultivating machines running on the ground), agricultural machinery autopilots (equipping tractors with "autonomous driving" capabilities), and intelligent farm equipment (monitoring soil, moisture, etc. with sensors).
Its drones can spray thousands of acres of land in a day, which is 10 times faster than manual work. They also save 30% of pesticides and 90% of water, enabling farmers to save money and effort.
According to Frost & Sullivan, in 2024, XAG ranked second in the global agricultural robot and agricultural drone industries with market shares of 10.7% and 17.1% respectively.
Standing at the crossroads of 2025, let's explore the new market demands for agricultural robots.
01
Peng Bin, the founder of XAG, was born in Sanming, Fujian Province in 1982. He has been an aviation model and robot enthusiast since childhood.
After graduating from Xidian University, he became a programmer, won the Microsoft MVP award for three consecutive years, and served as the chairman of the Microsoft (Guangzhou) .NET Club, becoming a well - known technical expert in the industry.
Beyond coding and programming, flying has always been his passion, which laid the foundation for his subsequent entrepreneurship.
In 2007, Peng Bin founded XAIRCRAFT, the predecessor of XAG, in Guangzhou with a group of flying enthusiasts. Initially, it only produced aviation models for enthusiasts without a clear business model.
At that time, the drone industry was in its infancy. Peng Bin explored various commercial fields such as scientific research, inspection, and logistics.
They conducted over 50,000 test flights of logistics drones in cooperation with SF Express but finally found that "it is big data and sorting robots, not drones, that are transforming the logistics industry."
In the early 2010s, as DJI rapidly rose with consumer - grade drones, XAG's survival space was increasingly squeezed. With nearly $20 million in financing almost exhausted, the team reached a crossroads.
Fate took a turn in 2013.
02
A trip to Xinjiang in 2013 became the "turning point" in Peng Bin's entrepreneurial journey.
In the vast cotton fields, he witnessed the pain points of traditional agriculture. Farmers manually spraying pesticides with backpacks were inefficient and prone to poisoning, and the rural labor force was rapidly shrinking due to urbanization. A thought suddenly struck him: "Can drones help farmers with their work?"
Without hesitation, Peng Bin improvised a simple plant protection drone using a cola bottle, a foam box, and a drone he carried with him, and conducted the first test in the field.
Watching the precise spraying trajectory of the drone, he realized that as a major agricultural country, China has a trillion - level demand for plant protection behind its 2 billion mu of cultivated land. More importantly, few domestic companies were involved in this field at that time, presenting an opportunity for XAG to avoid homogeneous competition.
This epiphany led Peng Bin to establish the concept of "finding technologies for the industry rather than finding industries for technologies." He halted other businesses and led the team to fully focus on the agricultural sector, moving the R & D department directly to the farmland in Xinjiang. Engineers rolled up their trousers and worked in the fields, experiencing soil humidity and crop growth firsthand to develop products that are "durable and problem - solving."
03
In 2014, XAIRCRAFT was officially renamed "XAG" and fully focused on the transformation towards agricultural technology.
However, the initial promotion was extremely difficult. Farmers looked at the "small thing like a router" with suspicion, even regarding it as a pyramid scheme.
Peng Bin did not rush to sell products but established a "plant protection service team" to provide free services for farmers. During the busy farming season, manual labor could only spray 30 mu of land per day, while XAG's drones could spray 300 mu and save half of the pesticides. The tangible results gradually won over the farmers.
In 2015, XAG launched its first plant protection drone and established the largest agricultural plant protection service team in China at that time. In 2016, it introduced the P - series plant protection drones, and the invented intelligent centrifugal atomization technology solved the problem of liquid waste. In 2018, the P30 plant protection drone won multiple international awards, and its market share exceeded 50%.
With technological advancements, their product portfolio has expanded from single - type drones to a full - chain of equipment including agricultural unmanned vehicles, remote sensing devices, and intelligent irrigation systems, serving 8.72 million farmers, 600 million mu of farmland, and 42 countries.
By 2020, XAG secured 1.2 billion yuan in financing.
04
XAG's products mainly fall into four categories:
Agricultural drones: These are the company's flagship products and the main source of revenue. A series of advanced core technologies have been developed, including autonomous driving, spatial digitization, AI, intelligent spraying and spreading, motor control, intelligent farm system, industrial design, and IoT platform technologies.
Agricultural unmanned vehicles: Complementary to drones, they focus on precise spraying and transportation in orchard and greenhouse scenarios on the ground.
Agricultural machinery autopilots: They can be installed on traditional agricultural machinery such as tractors and rice transplanters to achieve autonomous driving for precise sowing, furrowing, and ridging.
Intelligent farm IoT products: Including intelligent cameras, intelligent valves, and intelligent fertilizers, they are used for real - time monitoring of crop growth environments and automated management of irrigation and fertilization.
These products mainly address the labor shortage in agricultural production, liberating farmers from heavy manual labor and enabling precise and efficient unmanned operations.
The most important product of XAG is the agricultural drone. From 2022 to the first half of 2025, the proportion of agricultural drones in XAG's total revenue was 78.6%, 81.2%, 87.8%, 88.5%, and 89.0% respectively.
With high - precision RTK positioning technology, the flight path of the drone can be accurate to the centimeter level. Users only need to plan the operation area through a mobile app, and the drone can fly autonomously, plan the most efficient route intelligently, and avoid obstacles automatically.
Equipped with an intelligent centrifugal atomization nozzle, it can break the liquid medicine into uniform tiny particles. Under the downward wind field generated by the rotors, the particles can evenly cover both sides of the crops, greatly improving the utilization rate of pesticides and reducing waste and environmental pollution.
The prospectus shows that in Asian rice - growing areas, it used to take 10 - 20 people 5 - 10 days to spray pesticides on 1000 mu of rice fields. With XAG's agricultural drones, only 1 - 2 operators can complete the task in 1 - 2 days, while increasing the output by 5 - 10%, saving 20 - 30% of pesticides, and about 90% of water.
In addition to spraying pesticides, by replacing different task modules, the drone can also serve as a sowing expert (RuiBo system) and a transportation assistant (RuiYun system), enabling precise sowing of seeds and fertilizers and short - distance material transportation in the fields. Its versatility makes it an indispensable tool in modern agricultural production.
In terms of market position, XAG is not only a leading enterprise in China but also an important player in the global agricultural drone market. According to Frost & Sullivan, in 2024, it had a 10.7% market share in the global agricultural robot industry, ranking second, and a 17.1% market share in the agricultural drone segment, also ranking second globally.
05
In recent years, XAG has shown strong financial growth.
In terms of revenue, its total revenue increased from 605 million yuan in 2022 to 614 million yuan in 2023 and achieved a significant 73.4% growth in 2024, reaching 1.066 billion yuan. In the first half of 2025, the revenue was 745 million yuan, a 2.1% year - on - year increase.
In terms of profitability, XAG recorded net losses of 254 million yuan and 133 million yuan in 2022 and 2023 respectively.
Notably, it turned profitable in 2024, recording a net profit of 70.4 million yuan. This positive trend continued in the first half of 2025, with a net profit of 131 million yuan, a 49.1% year - on - year increase.
In recent years, the overseas market has become a new growth engine. Data shows that its overseas revenue increased from 146 million yuan in 2022 to 371 million yuan in 2024, with a compound annual growth rate of 59.4%.
Public data shows that XAG has received 7 rounds of financing from well - known institutions such as Chengwei Capital and Hillhouse Capital, industrial groups such as Tianrongxin and China Unicom, and numerous listed company LPs such as JP Investment.
In terms of customers, its customer base is wide and dispersed, so it mainly relies on the distributor model for sales.
During the performance record period, revenue from distributors accounted for 96.6% (2022), 97.4% (2023), 99.4% (2024), and 99.6% (six months ended June 30, 2025) of the total revenue respectively.
As of June 30, 2025, its distributor network covered nearly 60 countries and regions globally, with over 900 cooperative distributors.
Notably, XAG's top five customers are all independent third - parties. In 2024, revenue from the top five customers accounted for 21.5% of the total revenue, and the largest customer accounted for 7.0%, indicating no significant dependence on a single customer.
06
Currently, in the international competition pattern of this field, Chinese innovation is leading global transformation.
Agricultural mechanization was a product of the Western Industrial Revolution. Traditional agricultural machinery such as tractors and harvesters originated in Western countries and have long dominated the global market. However, in the new round of agricultural technological revolution characterized by intelligence and electrification, Chinese enterprises are playing a leading role.
The prospectus points out that although China is not the first country to apply drones in agriculture, it is the first to achieve large - scale application.
Thanks to China's complex cultivated land environment (covering various terrains such as plains, paddy fields, and hills) and a strong supply - chain system (especially the consumer electronics and new energy industries in the Guangdong - Hong Kong - Macao Greater Bay Area), leading Chinese enterprises like XAG have developed products with advanced performance, stability, reliability, and high cost - effectiveness through fierce domestic market competition.
This advantage is translating into global competitiveness.
In the United States, fixed - wing aircraft piloted by professional pilots have traditionally been used for spraying operations. However, the pilot population is facing serious aging and shrinkage problems. XAG's drones, with their high safety, low operation threshold, and precise spraying, effectively fill this labor gap.
In Brazil, compared with large - scale ground spraying vehicles that cost millions of yuan, XAG's drones not only have significantly lower acquisition costs but also higher operation efficiency, are not restricted by terrain, and can improve the pesticide utilization rate by 20% - 30%.
It can be said that in the agricultural drone segment, Chinese enterprises have transformed from "followers" to "leaders" and are exporting "Made in China" to farmlands around the world.
07
Standing at the crossroads of 2025, the agricultural robot market is entering a new stage of development. Existing pain points are being addressed, and new market demands are emerging.
New opportunities: From single - tool to smart ecosystem.
1. The fundamental driving force of demand - the problem of "farming without labor" is becoming more severe.
This is not only a problem in China but also a global historical demand. The prospectus predicts that the number of agricultural employees in China will decrease from 140 million in 2024 to 30 million in 2050, a decline of nearly 80%.
The labor shortage problem is more prominent in developed economies such as the OECD.
This means that agricultural robots are no longer just "nice - to - have" tools but "must - have" products for future food security. This will be a trillion - level blue - ocean market.
2. Technological integration to build an "agricultural brain."
The market is no longer satisfied with the automation of single robots but calls for a "smart farm" ecosystem that can coordinate overall operations.
For example, XAG is following this trend and plans to build a deeply integrated data management platform to connect all devices such as agricultural drones, unmanned vehicles, intelligent irrigation systems, and field sensors.
In the future, the role of farmers will change completely. They will no longer be heavy laborers but "managers" of smart farms. Through an app, they can monitor various data of farmland in real - time.
For example, when a field - patrol drone detects pests and diseases in a certain area through AI image recognition, the system can automatically dispatch a spraying drone for targeted treatment, while the intelligent irrigation system can automatically adjust the watering volume according to soil humidity and crop needs. This "robot - coordinated operation" scenario will take agricultural production efficiency to a new level.
3. Scenario expansion and huge cross - border application potential.
With the maturity of robot technology, its application scenarios are expanding from the core "planting, management, and harvesting" links to the entire agricultural production process and even crossing into other fields.
For example, XAG's "RuiYun system" enables drones to undertake short - distance logistics and transportation of agricultural products. Its newly released R - series unmanned vehicles have been used in mosquito - borne disease control in Guangdong, demonstrating their application potential in public health and other fields. This platform - based trend of "multi - purpose machines" will greatly expand the market space for agricultural robots.
This article does not constitute any investment advice.
This article is from the WeChat official account “Pencil News” (ID: pencilnews), written by Huatai Shi and re - published by 36Kr with permission.