Author｜Mei Wen

The stock price of Insta360 Innovation has plummeted from a high of RMB 377.54 in September 2025 to below RMB 100, a retreat of over 70% (Data source: East Money, as of the close on September 10).

After such a significant decline, is it now cheap? Not quite.

As of September 8, Insta360 Innovation had a total market capitalization of approximately RMB 42 billion, with a trailing twelve-month (TTM) P/E ratio as high as 95 times, a P/S ratio of 3.67 times, and a price-to-book (P/B) ratio of 8 times.

More critically, of the 227 million shares that became eligible for trading on June 11 (accounting for 56.5% of the total share capital and corresponding to a market value exceeding RMB 37 billion), only approximately RMB 1.5 billion worth of shares have been traded via block trades over the past three months. Some financial investors, who acquired their stakes at extremely low costs, have yet to issue formal pre-disclosure announcements regarding their plans to reduce their holdings.

If we consider the post-lock-up performance of Roborock Technology, the outlook for Insta360's evaluation in the capital markets appears unfavorable.

Is a 95x P/E ratio excessively high compared to its peers?

Let's examine a set of comparisons.

Anker Innovations, a leader in cross-border consumer electronics, had a total market capitalization of RMB 77.7 billion as of September 7, 2026, with a TTM P/E ratio of 25.25 times, a P/S ratio of 2.27 times.

Roborock Technology, one of the two leading players in the robotic vacuum cleaner market, had a total market capitalization of RMB 33.4 billion, a TTM P/E ratio of 19.95 times, a P/S ratio of 1.60 times, and a P/B ratio of 2.3 times.

Ecovacs Robotics, another leading player in the robotic vacuum cleaner market, had a total market capitalization of RMB 30.4 billion, a TTM P/E ratio of approximately 15-19 times, and a P/B ratio of 3.02 times.

Insta360's P/E ratio is 3.8 times that of Anker, 4.8 times that of Roborock, and 5 to 6 times that of Ecovacs. Its P/S ratio is also 60% higher than Anker's and 130% higher than Roborock's.

Some may argue that Insta360 is experiencing rapid growth. However, in the first half of 2026, Insta360's revenue grew by 50%, but its net profit plummeted by 94%, resulting in a loss after excluding non-recurring items.

In contrast, Anker Innovations continued to grow its net profit in the first half of the year, while Roborock Technology saw a 45.6% year-on-year increase in net profit. Purchasing a company with a 94% decline in profit and a loss after excluding non-recurring items at a 95x P/E ratio—how much of this pricing reflects a 'growth illusion'?

UBS forecasts Insta360's EPS for 2026 to be RMB 1.62, implying a P/E ratio of approximately 64 times at the current stock price; Goldman Sachs forecasts an EPS of RMB 3.75, implying a P/E ratio of about 28 times.

The valuation of the same company differs by more than double—depending on whose forecast you trust.

If we adopt a more conservative forecast—such as a full-year net profit of RMB 280 million (a downward revision by China Galaxy Securities)—the P/E ratio soars to 150 times.

Whether it's expensive or not is clear at a glance.

Three Months Post-Lock-up Expiry: Mirroring Roborock's Initial Phase

On June 11, Insta360 Innovation completed its first anniversary as a listed company, with 227 million restricted shares becoming eligible for trading. The float expanded from 32.8 million shares to 259 million shares, nearly an eightfold increase.

On the day of the lock-up expiry, Insta360's closing price was approximately RMB 163.

Three months later, the stock price stands at RMB 104, a decline of 36%.

This trend closely resembles that of Roborock Technology, which saw 30 billion yuan worth of shares become eligible for trading on February 22, 2021. The stock price plummeted by 12.97% the following day, rebounded for a period, and then began a prolonged decline in June 2021, ultimately falling by 83% over a year and a half.

During this period, original shareholders, including Xiaomi-backed entities, cashed out approximately RMB 6.6 billion through share reductions. The lesson is clear: while the stock price may initially hold up after the lock-up expiry, as original shareholders continue to reduce their stakes and earnings growth slows, the valuation will be continuously revised downward, leading to increasingly severe declines.

Where does Insta360 currently stand? Three months post-lock-up expiry, the stock has declined by 36%, with block trades accounting for only approximately RMB 1.5 billion, or 4% of the total value of shares that became eligible for trading. This means that 96% of the unlocked shares remain in the hands of shareholders and have not been sold.

If we consider Roborock's post-lock-up phase, which initially saw a rise followed by a decline, Insta360 has experienced a decline followed by stabilization—but the essence remains the same. Large-scale share reductions have not truly begun. Once certain major shareholders issue formal share reduction plans, the market will face significantly greater selling pressure than it does now.

Significant Selling Pressure Remains as Unlocked Shares Held by Shareholders Have Yet to Be Reduced

Among the 28 shareholders whose shares became eligible for trading, three are the most critical: EARN ACE LIMITED (affiliated with IDG Capital), QM101 LIMITED (affiliated with Qiming Venture Partners), and Xunlei Network.

These three entities collectively hold approximately 113 million shares, accounting for 28% of the total share capital and corresponding to a market value of approximately RMB 11.8 billion.

EARN ACE (IDG-affiliated) holds 47.97 million shares, representing 21.2% of the total unlocked shares. Based on an analysis of the lock-up expiry by Snowball, it is estimated that IDG's cost per share was approximately RMB 0.4. At the current stock price of RMB 104, this represents a floating profit of approximately 260 times.

What does this mean? An investment of RMB 1 million would now be worth RMB 260 million. Moreover, IDG entered in 2015-2016 and has held the shares for over a decade, far exceeding the typical duration of a fund. For IDG, even if Insta360's stock price falls to RMB 50, the return would still be 125 times; if it falls to RMB 20, the return would be 50 times. For an early-stage fund that has held shares for ten years, selling at any price would yield substantial profits. Exiting is not a choice but a necessity.

Furthermore, this cost structure means that the unlocked shareholders are highly insensitive to the stock price.

They will not wait for a rebound to sell, as secondary market investors might, but will sell at any price at which they can execute a trade—because any sale price will yield a profit.

This is why, following Roborock's lock-up expiry, share reductions by original shareholders were virtually cost-insensitive. Xiaomi-backed entities cashed out RMB 6.6 billion from Roborock, selling from over RMB 1,000 per share down to RMB 300, selling more as the price fell because their cost was only a few dozen yuan.

The situation with Insta360 is even more extreme. IDG's cost in Insta360 is even lower than that of Roborock's original shareholders, and Insta360's fundamentals are deteriorating—net profit has plummeted by 94%, there is a loss after excluding non-recurring items, operating cash flow is negative at RMB 2.76 billion, inventory stands at RMB 6.2 billion, industry giants are engaged in a sustained price war, and storage chip prices are rising—all of which undermine the rationale for shareholders to hold the shares long-term.

The logic for financial investors is straightforward: going public is for the purpose of exiting. With the company's fundamentals declining and competitors growing stronger, why wait to exit?

QM101 (Qiming-affiliated) holds 33.84 million shares, and Xunlei Network holds 31.44 million shares. Like IDG, these are early-stage financial investors with extremely low costs and substantial floating profits. Moreover, these shareholders are backed by funds, which have a lifespan and face redemption pressure from limited partners (LPs). The dollar funds of IDG and Qiming typically have a ten-year lifespan with a two-year extension option. Projects invested in during 2015-2016 are now at a critical juncture where exit is mandatory.

In summary, the question is not whether share reductions will occur but when large-scale reductions will take place.

Only RMB 1.5 billion worth of shares have been sold in the past three months, likely because the stock price has declined too rapidly, and shareholders are waiting for a relatively favorable window to offload their holdings—such as during new product launches, positive earnings reports, or market rebounds. However, once such a window appears, selling pressure will be concentrated.

Curiously, as of now, none of these three major shareholders (each holding over 5%) have issued formal pre-disclosure announcements regarding their plans to reduce their stakes.

This has raised market skepticism. For example, an analysis on East Money directly posed the question: 'Are leading venture capital firms splitting their shares and distributing them across multiple accounts to liquidate their holdings in small blocks, thereby avoiding the 5% disclosure obligation?'

Data shows that block trades have exceeded RMB 1.5 billion in aggregate over the past three months post-lock-up expiry. If these block trades were executed by the unlocked shareholders, it means they have already been selling quietly, simply without informing the market through public announcements.

The timing, method, and price at which the remaining 'bulk' of unlocked shares will be sold remain a Sword of Damocles hanging over Insta360's stock price.

In addition to the June lock-up expiry, two more rounds are scheduled: 1.2693 million strategic placement shares will become eligible for trading on June 2027, and 140 million shares held by original shareholders will become eligible on June 2028 (approximately RMB 14.6 billion at the current stock price).

In other words, Insta360's float will continue to expand over the next two years.

Is a Valuation Correction Inevitable?

Is Insta360 a good company? From a product perspective, yes. It has achieved global leadership in 360-degree cameras, with cumulative shipments of 10 million units, carving out a niche amid competition from GoPro and DJI.

However, a good company does not necessarily equate to a good stock.

Various indicators suggest that Insta360's valuation correction is not yet complete.

While Insta360 may have better growth prospects than companies like Roborock, even assigning it a 30x P/E ratio (still the highest among its peers) and using UBS's EPS forecast of RMB 1.62, the fair stock price would be RMB 48.6, implying a 53% downside from the current price of RMB 104.

Over the next few quarters, significant uncertainties remain regarding major shareholders' share reductions, net profit performance, and market price wars. If shareholders begin large-scale share reductions and earnings continue to deteriorate, Insta360's stock price may replicate Roborock's second-phase trend—a slow but sustained decline until its valuation returns to a level commensurate with that of a consumer hardware company.

After all, the rule of the capital markets is simple: a good company can decline if it is overvalued, and a poor company can rise if it is undervalued.

Currently, Insta360 appears to be a good company that is deteriorating, yet it is priced as if it were a great company.

*All images in this article are sourced from the internet.