公司資料 Annual Report 年度報告 2024 目錄 | 2 | 公司資料 | | --- | --- | | 4 | 五年財務概要 | | 5 | 管理層討論及分析 | | 18 | 董事及高級管理層的履歷 | | 20 | 董事會報告 | | 54 | 企業管治報告 | | 69 | 獨立核數師報告 | | 76 | 綜合損益表 | | 77 | 綜合損益及其他全面收益表 | | 78 | 綜合財務狀況表 | | 80 | 綜合權益變動表 | | 82 | 綜合現金流量表 | | 83 | 綜合財務報表附註 | | 166 | 釋義 | 董事會 執行董事 王寧先生 （主席兼首席執行官） 彭唯先生 劉冬先生 （於開曼群島註冊成立的有限公司） (A company incorporated in the Cayman Islands with limited liability) Stock Code 股份代號 : 3650 獨立非執行董事 葛新女士 單一剛先生 王海寧先生 聯席公司秘書 林雨欣女士 黎少娟女士 授權代表 王寧先生 林雨欣女士 核數師 審計委員會 葛新女士 （主席） 單一剛先生 王海 ...

Core Viewpoint - The fitness industry is experiencing increased attention due to government initiatives promoting health, yet Keep, a leading fitness platform, reported a significant increase in losses, raising questions about its profitability despite growing user engagement [1][2]. Group 1: Industry Trends - The National Health Commission announced a "Weight Management Year" initiative aimed at promoting healthy lifestyles over the next three years, aligning with previous plans to create a supportive environment for weight management starting in 2024 [1]. - The growing interest in fitness and health policies may lead to a surge in users for platforms like Keep, similar to the user growth seen during the pandemic [2]. Group 2: Company Performance - Keep's financial report for 2024 revealed a net loss that expanded by 59% compared to the previous year, despite an increase in user engagement and fitness participation [1]. - The company has significantly increased its R&D spending, particularly in AI, which is seen as a long-term investment to enhance its competitive edge [1][7]. Group 3: Competitive Landscape - Keep faces competition from social media platforms that offer free fitness content, raising concerns about user retention and engagement [3][4]. - However, Keep's structured and systematic training programs differentiate it from the fragmented content available on social media, positioning it as a provider of comprehensive fitness solutions rather than just content consumption [4][5]. Group 4: AI Integration Strategy - Keep is investing heavily in AI to enhance user experience and content production efficiency, aiming to transform from a content-centric model to a service-oriented model [8][9]. - The introduction of AI-driven features is expected to significantly increase the average revenue per user (ARPU) by providing personalized training plans and real-time feedback [8][9]. Group 5: Financial Outlook - Despite the increased losses in the second half of 2024, Keep's stock price remained stable, indicating investor confidence in its strategic direction towards AI [11]. - The company maintains a healthy cash flow and continues to see growth in membership subscription revenue, suggesting resilience in its core business [11].

Investment Rating - The investment rating for the company is "Outperform the Market" [6] Core Viewpoints - The company's revenue for 2024 is expected to decline slightly by 3.4% to 2.066 billion HKD, primarily due to a decrease in online sports event revenue compared to the high base in 2023. However, the gross margin continues to improve, increasing by 1.8 percentage points to 46.7%, driven by the growth in proprietary brand business and online paid services [1][4] - The company is focusing on its proprietary brand business, which has shown steady growth, particularly in the equipment and apparel categories, which grew by 16%. The launch of the smart watch Pilot1 has also contributed positively, with over 12,000 units sold in four months [2][4] - The company is expanding its outdoor scene successfully, with a 30% year-on-year increase in users participating in niche sports such as cycling and ball games. The average monthly active users (MAU) reached 29.92 million, with a stable paid user penetration rate of 10.6% [3][4] Summary by Sections Revenue and Profitability - Total revenue for 2024 is projected at 2.066 billion HKD, down 3.4% from 2023. The adjusted net loss is expected to widen to 470 million HKD, a 59% increase year-on-year. Sales expenses rose by 33.1% to 758 million HKD, largely due to increased marketing costs related to the sports year and app upgrades [1][5] - The proprietary brand sports products generated revenue of 954 million HKD, up 0.8%, with a gross margin of 31.7%, benefiting from a higher proportion of high-margin categories [2][5] Future Outlook - The company anticipates a return to breakeven by 2025, with adjusted net profits projected at 0.00 million HKD in 2025, 65 million HKD in 2026, and 131 million HKD in 2027. The target price has been raised to 6.2-6.6 HKD, reflecting an upward revision in profit forecasts [4][22] - The ongoing AI initiatives are expected to enhance user engagement and subscription rates, with significant benefits anticipated in 2026-2027 [4][22]

Core Insights - Keep reported a revenue of 2.066 billion RMB for the fiscal year ending December 31, 2024, with an adjusted net loss of 469 million RMB, indicating a strategic focus on long-term growth despite short-term losses [1][2][3] Financial Performance - Revenue decreased by 3.4% year-on-year, while gross profit was 965 million RMB, with a gross margin increase from 45.0% to 46.7% [2] - Revenue sources include self-branded sports products (954 million RMB, up 0.8%), online memberships and paid content (918 million RMB), and advertising and other revenues (194 million RMB) [2] - The gross profit from self-branded fitness products increased by 15.3% to 302 million RMB, with a gross margin rise from 27.7% to 31.7% [2] User Metrics - Average monthly active users reached 29.92 million, with average monthly subscription members at 3.16 million, maintaining a membership penetration rate of 10.6% [1][3] Strategic Initiatives - The company plans to achieve breakeven by 2025 through investments in new strategic businesses and technological innovations, including AI applications to optimize operations and reduce costs [3][4] - Keep launched App 8.0, enhancing online services and data functionalities, with 14% of its 6,000 official courses being AI-generated content [4] AI and Future Development - Keep is focusing on AI-driven solutions to enhance user experience and operational efficiency, including the introduction of Kinetic.ai and the AI coach experience, Kaka [4][5] - The company aims to transition from content-driven to data-driven ecosystems, leveraging AI technology to strengthen its competitive edge [5]

Financial Performance - Total revenue for 2024 reached RMB 2,065,694, a decrease of 3.4% compared to RMB 2,137,834 in 2023[2] - The net loss for the year was RMB 534,710, compared to a profit of RMB 1,105,908 in 2023, indicating a significant decline[2] - Adjusted net loss for 2024 was RMB 469.6 million, compared to RMB 295.4 million in 2023, primarily due to increased investments in strategic business and technological innovation[8] - Total revenue for the year ended December 31, 2024, was RMB 2,065.7 million, a decrease of 3.4% compared to RMB 2,137.8 million for the year ended December 31, 2023, primarily due to a decline in online membership and paid content service revenue[22] - The company reported a net loss attributable to shareholders of RMB 534.71 million for the year ended December 31, 2024, compared to a profit of RMB 1.11 billion in 2023, representing a significant decline[85] - Basic loss per share for 2024 was RMB (1.15), down from earnings of RMB 3.78 per share in 2023[83] User Engagement and Growth - Average monthly active users (MAUs) rose to 29,921, compared to 29,756 in 2023, reflecting a slight increase in user engagement[5] - The number of average monthly subscribers was 3,162, down from 3,193 in 2023, resulting in a membership penetration rate of 10.6%[5] - Average monthly active users for 2024 reached 29.9 million, with average monthly subscribers at 3.2 million, showing stability compared to 2023[9] - Member penetration rate for 2024 was 10.6%, slightly down from 10.7% in 2023, indicating a stable user base[9] - Outdoor user growth in 2024 matched indoor fitness users, with running as the primary activity and over 30% growth in cycling, ball sports, swimming, and boxing users[11] - The platform reached over 400 million registered users and 100 million annual active users by the end of 2024, with over 5.5 million annual exercise users[14] Product Development and Innovation - The company launched a new generation of wearable fitness devices and a series of popular products integrating sports science and aesthetics[4] - The Keep App 8.0 version launched in 2024 included over 40,000 recorded classes, catering to diverse user needs and enhancing online fitness services[10] - AI-generated content accounted for nearly 14% of the 6,000+ official courses, with new overseas AI fitness applications providing 100% AI-generated personalized plans[15] - The introduction of the exercise file feature integrates over 100 sports indicators, providing users with comprehensive insights into their exercise performance and health data[13] - The wearable product line, including the B4 and B4 Lite, achieved cumulative sales of over 1.2 million units, with the newly launched "Keep Watch Pilot 1" smartwatch selling over 12,000 units within four months of its release[18] Revenue Streams and Cost Management - Revenue from proprietary fitness products increased by 0.8% year-on-year in 2024, with gross profit rising significantly by 15.3%, leading to an overall gross margin improvement to 31.7% from 27.7% in 2023[17] - Revenue for proprietary sports products reached RMB 953.9 million, a 0.8% increase from RMB 946.1 million in 2023, driven by increased sales of complementary sports products[24] - Online membership and paid content revenue decreased by 7.8% to RMB 917.8 million from RMB 995.8 million in 2023, primarily due to a decline in revenue from online sports events[24] - Operating costs decreased by 6.5% to RMB 1,100.3 million from RMB 1,176.2 million in 2023, benefiting from successful cost control measures[26] - Sales and marketing expenses rose by 33.1% to RMB 757.9 million, primarily due to increased promotional and advertising expenditures[33] Strategic Goals and Future Outlook - The company aims to achieve breakeven by 2025 through technology empowerment and operational cost reduction[8] - The company plans to leverage generative AI technology to enhance user experience and expand personalized fitness offerings, transitioning from a content-driven model to a data-driven model[16] - The company aims to enhance and expand its online services, targeting both domestic and international markets, to increase user scale and subscription revenue through AI and data-driven applications[21] - The company is focused on optimizing its business structure and enhancing operational efficiency to meet diverse user needs in the evolving fitness landscape[6] Financial Position and Assets - The total available cash as of December 31, 2024, was RMB 1.2 billion, down from RMB 1.8 billion as of December 31, 2023, primarily due to cash outflows from operating activities and investments in financial assets[42] - Total assets decreased from RMB 2,448,741 thousand in 2023 to RMB 1,905,802 thousand in 2024, a decline of approximately 22.2%[56] - Current assets decreased from RMB 2,291,429 thousand in 2023 to RMB 1,735,935 thousand in 2024, a decline of about 24.2%[56] - Cash and cash equivalents significantly decreased from RMB 1,612,769 thousand in 2023 to RMB 764,260 thousand in 2024, a drop of approximately 52.7%[56] - Total equity decreased from RMB 1,873,149 thousand in 2023 to RMB 1,355,802 thousand in 2024, a decline of around 27.5%[56] Corporate Governance and Compliance - The company has adopted the corporate governance code and has complied with all applicable provisions during the reporting period, except for the separation of the roles of Chairman and CEO[95] - The audit committee, consisting of three independent non-executive directors, has reviewed the consolidated financial statements for the year ended December 31, 2024[100] - The company has maintained compliance with the minimum public float percentage as required by the listing rules throughout the reporting period[99]

User Engagement and Growth - Keep Inc. reported a significant increase in user engagement, with a 25% year-over-year growth in active users, reaching 5 million[3]. - Average monthly active users increased to 29.7 million, up from 29.5 million in the same period last year, while average monthly subscription members rose to 3.3 million from 3.0 million[16]. - Membership penetration rate improved to 11.1% from 10.2% in the previous year, reflecting enhanced user engagement[14]. Financial Performance - The company achieved a revenue of $50 million for the first half of 2024, representing a 30% increase compared to the same period last year[3]. - Total revenue for the six months ended June 30, 2024, was RMB 1,037.3 million, an increase of 5.4% compared to RMB 984.7 million in the same period last year[16]. - Gross profit for the same period was RMB 477.3 million, up 12.7% from RMB 423.7 million year-on-year, with a gross margin improvement from 43.0% to 46.0%[16]. - The adjusted net loss (non-IFRS measure) narrowed by 28.0% to RMB 160.7 million from RMB 223.1 million in the previous year, with an adjusted net loss margin of 15.5% compared to 22.7%[16]. - The loss for the six months ended June 30, 2024, was RMB 163.4 million, compared to a profit of RMB 1.2 billion for the same period in 2023[38]. Product Development and Innovation - The company is investing $10 million in new product development, focusing on enhancing its fitness app features and user experience[3]. - Keep App 8.0 launched in March 2024, expanding to over 60 sports categories and integrating with more than 50 smart devices, enhancing user experience and interaction[17]. - Keep upgraded its data analysis tools, expanding body assessments to include more body parts and providing personalized training plans based on running performance metrics[20]. Market Expansion and Strategy - Keep Inc. plans to expand its market presence in Southeast Asia, targeting a 15% market share by the end of 2025[3]. - The overall business strategy focuses on balancing healthy growth with cost efficiency, aiming for stable user scale and increased user value[15]. - The company is exploring partnerships with local fitness centers to increase user engagement and retention rates[3]. Sustainability and Corporate Responsibility - The company is committed to sustainability, aiming to reduce its carbon footprint by 30% over the next three years[3]. - Keep's collaboration with top fitness influencers and IPs aims to create immersive course experiences, enhancing user participation and engagement[19]. Shareholder Value and Corporate Governance - The company launched and expanded a share repurchase plan to enhance shareholder value amid growing public interest in fitness[13]. - The audit committee consists of three independent non-executive directors and is responsible for reviewing financial reporting procedures and internal control systems[92]. - The company has adopted a standard code for securities trading by directors, confirming compliance during the reporting period[88]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2024, amounted to RMB 1.4 billion, down from RMB 1.6 billion as of December 31, 2023, primarily due to cash used in operating and financing activities[41]. - The net cash outflow from operating activities for the six months ended June 30, 2024, is RMB (196,962) thousand, compared to RMB (176,088) thousand for the same period in 2023, indicating an 11% increase in cash outflow[103]. Employee Compensation and Management - The total employee benefits expense for the six months ended June 30, 2024, was RMB 282.0 million, a decrease from RMB 335.2 million for the same period in 2023[43]. - Total remuneration for key management personnel increased to RMB 9,391,000 for the six months ended June 30, 2024, compared to RMB 15,007,000 for the same period in 2023, reflecting a decrease of approximately 37.5%[162]. Share Capital and Incentive Plans - The total number of issued shares (including treasury shares) was 525,671,987[54]. - The company has a structured share incentive plan that includes unexercised restricted share units for key executives[54]. - The maximum number of shares that can be issued under all incentive plans is 10% of the issued shares on the listing date, equating to 52,567,199 shares[78].

Investment Rating - The report maintains an "Accumulate" rating for the company [1][2]. Core Views - The company has significantly reduced losses and is expected to grow by providing a one-stop solution for users through fitness content and sports products [1]. - For H1, the company reported revenue of 1.04 billion RMB, a 5.4% increase year-on-year, with adjusted net loss of 160 million RMB, improving from a loss of 220 million RMB in the same period last year [2]. - The forecast for adjusted net profit for 2024-2026 is -267 million, -56 million, and 81 million RMB respectively, indicating a gradual recovery [2]. Summary by Sections Revenue Performance - H1 revenue breakdown: - Own brand sports products: 501 million RMB (+7.5%) due to increased wholesale channels and sales of fitness equipment and apparel - Online membership and paid content: 437 million RMB (-2.6%) due to a decline in virtual sports event revenue - Advertising and others: 989 million RMB (+42.4%) due to the integration of online and offline advertising business [2]. User Engagement - Average monthly active users reached 29.66 million (+0.4%), with subscription members at 3.282 million (+8.8%), solidifying the company's leading position in the industry - Subscription penetration rate improved to 11.1% (+0.9 percentage points) [2]. Profitability and Cost Structure - H1 gross margin was 46% (+3 percentage points), with own brand sports products at 31.5% (+3.6 percentage points) - Adjusted loss rate was -15.5% (+16.4 percentage points) - Cost structure improved with a reduction in expense ratio to 64.8% (-5.95 percentage points) [2]. Product Development and Future Outlook - The company continues to iterate its own brand matrix and plans to explore overseas AI markets - New product launches include the Keep Watch Pilot 1 smart sports watch and significant upgrades to the Keep App [2]. - The number of exclusive courses for members increased to 5,595 (+136%), with workout sessions increasing by over 70% [2].

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 1,037.3 million, representing a year-on-year increase of 5.4%[6] - Gross profit for the same period was RMB 477.3 million, with a gross margin of 46.0%, up from 43.0% in the previous year, reflecting a 3.0 percentage point improvement[6] - Adjusted net loss for the six months was RMB 160.7 million, a significant reduction of 28.0% from RMB 223.1 million in the same period last year[6] - Total revenue for the six months ended June 30, 2024, was RMB 1,037,343 thousand, an increase from RMB 984,656 thousand in the same period of 2023, resulting in a gross profit of RMB 477,322 thousand[40] - The company reported a net loss of RMB 163,353 thousand for the six months ended June 30, 2024, compared to a net profit of RMB 1,195,124 thousand for the same period in 2023[41] - Basic loss per share for the six months ended June 30, 2024, was RMB (0.35), a significant decrease from RMB 8.64 in the prior year[58][59] User Engagement and Growth - Average monthly active users increased to 29.7 million, compared to 29.5 million in the previous year, while average monthly subscribers rose to 3.3 million from 3.0 million[8] - Monthly average revenue per active user grew by 5.0% year-on-year to RMB 5.8[8] - Membership penetration rate improved to 11.1% from 10.2% year-on-year, indicating a successful expansion of the user base[6] - The company launched the upgraded Keep App 8.0 in March 2024, enhancing user experience and engagement[8] - As of June 30, 2024, the total number of member-exclusive courses increased to 5,595 from 2,366 a year earlier, representing a growth of over 135%[11] - The number of workout sessions for member courses grew by over 70% in the first half of 2024 compared to the same period in 2023[11] Revenue Breakdown - Revenue from proprietary sports products reached RMB 501.5 million, up 7.5% from RMB 466.4 million in the prior year, primarily due to increased sales through wholesale channels and fitness equipment[21] - Advertising and other revenue surged by 42.4% to RMB 98.9 million, compared to RMB 69.4 million in the previous year, mainly due to online-to-offline integrated advertising services[21] - Online membership and paid content revenue was RMB 436,996,000, slightly decreasing from RMB 448,864,000 in the previous year[53] Cost Management - Operating costs slightly decreased by 0.2% to RMB 560.0 million from RMB 561.0 million in the previous year, attributed to reduced costs in online membership and paid content[22] - Administrative expenses decreased by 19.3% from RMB 112.0 million to RMB 90.5 million, attributed to optimized accounts receivable management[29] - Research and development expenses decreased by 19.6% from RMB 243.4 million to RMB 195.7 million, mainly due to reduced personnel costs and cloud service fees[30] - Online membership and paid content costs decreased by 21.8% from RMB 179.4 million for the six months ended June 30, 2023, to RMB 140.4 million for the six months ending June 30, 2024[24] Strategic Initiatives - The company initiated and expanded a share repurchase program to enhance shareholder value, reflecting confidence in future business prospects[7] - The strategic focus on core business and operational efficiency has led to a gradual narrowing of losses, supporting growth in both scale and monetization capabilities[7] - The company is exploring new initiatives, including the optimization of virtual sports events and plans to launch AI sports products overseas[7] - Keep is actively exploring new market opportunities by expanding its offline activities and enhancing its event structure to boost user participation[13] Product Development - Keep App 8.0 version covers over 60 sports categories and integrates with more than 50 smart devices, enhancing user experience and convenience[9] - Keep's new immersive course experiences, such as the collaboration with "Arknights," utilize 3D motion capture to engage users more effectively[11] - The company aims to release its first smartwatch in August 2024, expanding its wearable product offerings and enhancing user experience[16] Financial Position - As of June 30, 2024, the company's cash and cash equivalents amounted to RMB 1.4 billion, a decrease from RMB 1.6 billion as of December 31, 2023, primarily due to cash used in operating and financing activities[36] - The company's asset-liability ratio as of June 30, 2024, was 0.27, compared to 0.24 as of December 31, 2023, indicating a slight increase in leverage[39] - The total equity as of June 30, 2024, was RMB 1,693,287 thousand, down from RMB 1,873,149 thousand as of December 31, 2023, reflecting a decrease in shareholder value[43] Shareholder Communication - The audit committee has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2024[69] - The interim report will be sent to shareholders and published on the company's website in due course[70] - The company expresses gratitude to shareholders, management team, employees, business partners, and customers for their support and contributions[70]

Investment Rating and Target Price - The report initiates coverage on Keep with a "Buy" rating and a target price of HKD 9.35, based on a 2024 target PS of 2.0x, which is discounted compared to the industry average of 3.0x [2][6] Core Investment Thesis - Keep is positioned as a leading fitness content platform in China, leveraging the synergy between online content and fitness products to drive healthy growth in membership and product revenues [2] - The company is expected to achieve revenue of RMB 2.26 billion, RMB 2.37 billion, and RMB 2.46 billion in 2024, 2025, and 2026, respectively, with a CAGR of 4.8% [2] - Non-IFRS net profit is projected to improve from a loss of RMB 240 million in 2024 to a profit of RMB 160 million in 2026, driven by improved gross margins in consumer goods and recovery in high-margin membership business [2] Industry Overview - China's fitness market is experiencing steady growth, supported by government policies, increasing fitness participation, and rising willingness to pay for fitness services [3][11] - The online fitness market penetration reached 50.4% in 2023, surpassing offline for the first time, with further growth expected due to technological advancements and digitalization trends [3][11] - Keep holds a leading position in the online fitness platform market, with a 30.8% market share in 2022, significantly ahead of competitors [11] Business Model and Growth Drivers - Keep operates a "content + hardware" business model, integrating online fitness content with smart fitness devices and complementary products to create a closed-loop ecosystem [2][5] - The company has expanded its outdoor fitness services, including running, walking, and cycling courses, and launched new products such as running gear and small ball sports equipment to meet diverse consumer needs [4] - Keep's competitive pricing strategy, with products priced at 20%-30% of comparable Lululemon and Nike items, positions it well to capture cost-conscious consumers [12] Financial Performance and Outlook - Keep's revenue grew from RMB 660 million in 2019 to RMB 2.21 billion in 2022, with a CAGR of 49.4%, although 2023 revenue slightly declined by 3.3% to RMB 2.14 billion [16][20] - Membership and online paid content revenue increased by 11.4% in 2023, becoming the largest revenue contributor at 46.6% of total revenue [20] - The company's gross margin improved to 45.0% in 2023, driven by higher-margin membership and online content business, with further upside potential from operational efficiencies [21][23] Competitive Advantages - Keep has built a deep moat through its cross-dimensional ecosystem, combining online fitness content with smart hardware and complementary products, creating a differentiated positioning compared to platforms like Bilibili and Douyin [5][12] - The company's ability to integrate offline exercise data with online platforms provides users with personalized feedback and training plans, enhancing user stickiness [5][43] - Keep's focus on professional and high-quality fitness content, along with its community-driven approach, strengthens its competitive edge in the online fitness market [37][38] Future Growth Opportunities - Keep is expected to benefit from the continued expansion of China's fitness market, driven by increasing fitness participation and willingness to pay [5][11] - The company's ongoing investment in AI and IoT technologies, such as the Keep Station smart fitness device, positions it to capitalize on the growing demand for smart fitness solutions [46][47] - Keep's ability to leverage its ecosystem to drive user growth and retention will be critical for sustainable commercialization and long-term value creation [48][49]

Financial Performance - Total revenue for 2023 was RMB 2,137,834, a decrease of 3.3% from RMB 2,211,551 in 2022[7] - Gross profit for 2023 reached RMB 961,644, with a gross margin of 45.0%, up from 40.7% in 2022[7] - The company reported a net profit of RMB 1,105,908 for 2023, a significant recovery from a loss of RMB 104,551 in 2022[7] - Total revenue for 2023 was RMB 2,137.8 million, a decrease of 3.3% year-over-year, primarily due to lower consumer confidence in e-commerce affecting proprietary brand sports product sales[12] - Revenue from proprietary sports products was RMB 946.1 million, down 16.8% from RMB 1,137.0 million in the previous year, attributed to lower consumer sentiment and increased offline leisure activities post-pandemic[26] - Revenue from online membership and paid content increased by 11.4% to RMB 995.8 million, driven by growth in virtual sports events[27] - Gross profit increased by 6.8% from RMB 900.4 million for the year ended December 31, 2022, to RMB 961.6 million for the year ended December 31, 2023[32] - Gross margin improved by 4.3 percentage points from 40.7% for the year ended December 31, 2022, to 45.0% for the year ended December 31, 2023, primarily due to increased revenue and gross profit contributions from online memberships and paid content[32] User Engagement and Membership - Average monthly active users decreased to 29,756 thousand in 2023 from 36,388 thousand in 2022[10] - Monthly average revenue per user increased to RMB 6.0 in 2023, compared to RMB 5.1 in 2022[10] - The average number of monthly subscription members was 3,193 thousand, down from 3,621 thousand in 2022[10] - The membership penetration rate improved to 10.7% in 2023 from 10.0% in 2022[10] - Monthly average revenue per active user increased by 17.6% year-over-year, driven by the continued growth of the virtual sports events business[14] - The number of recorded courses offered to paid members increased to 4,225 by December 31, 2023, up from 1,873 courses in 2022[15] - Average revenue per paid user in virtual sports events increased by over 30% compared to 2022, reflecting successful collaborations with well-known brands[19] Operational Efficiency and Cost Management - The company is focused on optimizing products and services while enhancing operational efficiency for sustainable growth[11] - The company aims to maintain a prudent cost control strategy to ensure user satisfaction across products and services[11] - Operating costs decreased by 10.3% to RMB 1,176.2 million from RMB 1,311.2 million in the previous year, significantly outpacing the slight decline in revenue[29] - The company successfully reduced inventory turnover days and lowered sales and marketing expense ratios, improving operational efficiency[24] - Operating expenses decreased by 22.8% from RMB 201.6 million for the year ended December 31, 2022, to RMB 155.7 million for the year ended December 31, 2023, mainly due to reduced revenue from proprietary fitness products and further optimization of logistics and warehousing costs[35] - Sales and marketing expenses decreased by 11.9% from RMB 646.2 million for the year ended December 31, 2022, to RMB 569.3 million for the year ended December 31, 2023, primarily due to reduced promotional and advertising expenses[36] Strategic Initiatives and Future Plans - The company aims to invest in immersive and exclusive online fitness content to enhance user acquisition and retention, strengthening its market position[25] - The company plans to continue enhancing and executing its core business strategy in 2024, focusing on empowering users pursuing a healthy lifestyle[12] - The company plans to further expand outdoor functionalities and products, enhancing service for outdoor users[25] - The app introduced new features including personalized route recommendations and enhanced social interaction capabilities, aimed at increasing user engagement[20] Shareholder and Governance Information - The company reported that its top five customers accounted for less than 30% of total sales, indicating a diversified customer base[90] - The issued share capital of the company as of December 31, 2023, was 525,671,987 shares[92] - The company maintained a minimum public float of 25% as required by listing rules as of December 31, 2023[98] - The company has a diverse shareholder base, including various investment funds and trusts, which may influence strategic decisions and market positioning[114] - The voting rights associated with 21,652,719 shares are controlled by Mr. Wang through a voting proxy agreement[112] - The company continues to monitor shareholder interests and compliance with securities regulations to ensure transparency and governance[113] Employee and Management Information - As of December 31, 2023, the total number of full-time employees was 955, down from 1,243 as of December 31, 2022[50] - Employee benefits for the year ended December 31, 2023, amounted to RMB 639.8 million, compared to RMB 766.8 million for the year ended December 31, 2022, reflecting a decrease of approximately 16.5%[50] - The company has implemented diverse learning and development programs for employees, including management training initiatives[87] - The board of directors includes key executives such as the CEO and co-founders, ensuring strong leadership continuity[100] - The compensation committee has been established to review the compensation policies and structures for all directors and senior management, ensuring a formal and transparent process[169] Compliance and Legal Matters - The company has complied with all relevant laws and regulations during the year ending December 31, 2023, with no significant legal proceedings affecting its operations[85] - The independent non-executive directors confirmed that the related party transactions were conducted according to the agreement terms and were fair and reasonable[155] - The company has complied with the applicable provisions of the listing rules regarding related party transactions for the year ended December 31, 2023[156] Risk Management and Financial Health - The company is continuously monitoring current and expected liquidity needs to ensure sufficient cash reserves for both short-term and long-term requirements[51] - Cash and cash equivalents decreased from RMB 1.7 billion as of December 31, 2022, to RMB 1.6 billion as of December 31, 2023, mainly due to cash used in operating activities[45] - As of December 31, 2023, the outstanding borrowings were RMB 10.0 million, with a debt-to-asset ratio of 0.24, significantly improved from 3.85 as of December 31, 2022[51] - The company does not face significant interest rate risk due to the absence of major floating-rate assets or liabilities, with financial assets and liabilities primarily consisting of fixed-rate instruments[54]