A tighter regulatory climate in China is casting a cloud over robotics startup Galaxea AI's plan to go public in Hong Kong, people familiar with the matter say.

The Wall Street Journal had previously reported that the China Securities Regulatory Commission had held talks with investment banks and institutional investors about raising the bar for IPOs by humanoid robot companies.

Some Galaxea investors are concerned that the company's financial outlook may not satisfy listing scrutiny, the people said. Galaxea confidentially filed for an initial public offering with the Hong Kong stock exchange in the first half of the year, the people added.

Galaxea's Hong Kong IPO plan is subject to approval from Chinese regulators who are encouraging humanoid robot companies to improve financials and focus on achieving technological innovations before rushing to go public.

Companies generally have 12 months to complete an IPO in Hong Kong after filing an application, but investors are now concerned that uncertainty risks scuttling Galaxea's listing, the people said.

According to the people, China International Capital Corp. and Citi have been working with Galaxea on the offering.

Galaxea was valued at around $3 billion in its latest private financing round in April, the people said.

Galaxea didn't immediately respond to requests for comment. Citi declined to comment.

Signs of stricter oversight come in the wake of the market frenzy sparked by the recent IPO of Unitree, one of the country's leading humanoid-robot makers. Despite drawing strong demand and surging 460% on its first day of trading, shares of Unitree--formally known as Yushu Technology--have retreated sharply. It now trades around 50% below its post-listing peak.

The volatile performance has cast doubt over the coming batch of robotics IPOs. Private investors say they are re-assessing the fair valuations of companies in a sector where technology is still in the early stages of development and lacks market use cases. Some say they are becoming increasingly prudent and selective when considering backing such startups.

Galaxea develops humanoid robots as well as robotics AI models and software that support research and development. The company was founded in 2023 by Gao Jiyang, who earned his Ph.D. at the University of Southern California and previously worked for Google parent Alphabet's self-driving unit Waymo.

Galaxea counts Chinese food-delivery giant Meituan, IDG Capital and a Beijing government investment vehicle among its investors.