China's Largest Fitness App Company KEEP Reports 2024 First-Half Loss of CNY 160 Million (USD 22.5 Million), Narrowed by 28% Compared to the Same Period Last Year
KEEP 2024 Mid-Year Financial Report: Operating Performance and Financial Analysis
KEEP, a comprehensive fitness service platform (www.keep.com), was founded in 2015 and is headquartered in China. Through its flagship application, the KEEP App, the company offers a diverse range of online and offline fitness services, covering over 60 types of activities, including running, cycling, strength training, and yoga, to meet users' fitness needs in various scenarios.
In addition to online services, KEEP has launched its own brand of sports products, including fitness equipment, sports apparel, and smart hardware such as fitness bands and wearable clothing. These products have gained widespread recognition in the market for their high quality and innovative designs.
On July 12, 2023, KEEP successfully listed on the Main Board of the Hong Kong Stock Exchange under the stock code 3650.HK. Since its IPO, KEEP's stock price has experienced significant volatility, with a peak close to HKD 40, but it faced a sharp decline by the end of 2023, hitting a low of HKD 3.45.
Recently, KEEP released its financial report for the first half of 2024, revealing several achievements amid challenges. These financial figures provide investors with a new perspective, showcasing the company's continuous efforts to drive business growth and enhance operational efficiency.
Let’s take a closer look at the highlights!
1. Overall Performance
In the first half of 2024, KEEP achieved steady business growth. During the reporting period, the company's total revenue reached CNY 1.0373 billion (USD 146.1 million), representing a 5.4% year-over-year increase. This growth was primarily driven by the continued development of its self-branded sports products, online membership subscriptions, and advertising services.
At the same time, the company’s gross profit margin improved significantly, rising from 43.0% in the same period in 2023 to 46.0%. Despite a challenging market environment, the company successfully narrowed its adjusted net loss by 28.0%, reducing it to CNY 160.7 million (USD 22.6 million), with a net loss margin of 15.5%.
2. User Base and Membership Growth
As of June 30, 2024, KEEP's platform had an average monthly active user base of 29.66 million, remaining stable compared to the same period last year.
The average number of monthly subscription members grew to 3.28 million, reflecting an 8.8% year-over-year increase. Membership penetration increased from 10.2% last year to 11.1%, indicating further enhancement in user engagement and willingness to pay.
3. Performance of Self-Branded Sports Products
Amid the recovery of China's retail market, KEEP's self-branded sports products performed exceptionally well.
In the first half of 2024, revenue from self-branded sports products reached CNY 501.5 million (USD 70.6 million), an increase of 7.5% year-over-year. The sales of complementary sports equipment, especially strength training products and running apparel, showed significant momentum.
However, the sales of online membership and paid content declined by 2.6% compare to the same period of last year.
4. Gross Profit and Cost Control
During the reporting period, the company's gross profit increased from CNY 423.7 million (USD 59.7 million) in 2023 to CNY 477.3 million (USD 67.2 million), representing a 12.7% increase.
The gross profit margin rose from 43.0% to 46.0%, primarily due to the improved gross margin of self-branded sports products and online memberships and paid content.
The gross margin for self-branded sports products increased from 27.9% to 31.5%, and the gross margin for online memberships and paid content also saw significant improvement, benefiting from optimized content costs and increased subscription revenue.
5. R&D and Human Resource Costs
In the first half of 2024, the company invested CNY 195.7 million (USD 27.6 million) in research and development, a 19.6% decrease year-over-year. This reduction mainly came from optimized costs related to R&D personnel and cloud computing services.
Meanwhile, the total number of employees was 920, with personnel costs amounting to CNY 282 million (USD 39.7 million) (an average of CNY 306,000 (USD 43,100) per person), down from CNY 335.2 million (USD 47.2 million) in the same period last year.
Source: KEEP 2024 Half-Year Report
By Roger Yao (cs07@fitqs.com)
The founder of FITQS/FQC
The editor of <FitGearHub>
20 years in fitness/sporting equipment OEM/ODM technical, quality control and sourcing management.
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