KEEP(HK:03650)2025-09-23 04:04Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 821,752 thousand, a decrease of 20.8% compared to RMB 1,037,343 thousand in 2024[10]. - Gross profit for the same period was RMB 429,080 thousand, down 10.1% from RMB 477,322 thousand in 2024[10]. - The net loss for the period was RMB 35,429 thousand, a significant reduction of 78.3% compared to a loss of RMB 163,353 thousand in 2024[10]. - Adjusted net profit for the period was RMB 10,347 thousand, contrasting with an adjusted loss of RMB 160,690 thousand in 2024, marking a 106.4% improvement[10]. - Adjusted net profit margin was 1.3%, an increase of 16.8 percentage points from a negative margin of 15.5% in 2024[10]. - Total revenue for the six months ended June 30, 2025, was RMB 821.8 million, a decrease of 20.8% compared to RMB 1,037.3 million for the same period in 2024[28]. - The loss for the six months ended June 30, 2025, was RMB 35.4 million, significantly reduced from a loss of RMB 163.4 million in the same period of 2024[38]. - Total comprehensive expenses for the period amounted to RMB 38,216,000, a decrease of 75% from RMB 155,835,000 in the previous year[113]. - Basic and diluted loss per share for the period was RMB 0.08, compared to RMB 0.35 for the same period in 2024[112]. Operational Efficiency - Operating costs for the six months ended June 30, 2025, were RMB 392.7 million, a reduction of 29.9% from RMB 560.0 million in the same period of 2024[30]. - The company has reduced customer acquisition costs by approximately 60% through optimized marketing strategies and focused user engagement efforts[15]. - Research and development expenses decreased by 17.0% to RMB 162.4 million from RMB 195.7 million, mainly due to reduced personnel costs and improved labor productivity from advancements in AI technology[37]. - Sales and marketing expenses were RMB 223.5 million, down 30.9% from RMB 323.4 million, benefiting from optimized promotional efficiency[35]. - Administrative expenses decreased by 8.5% to RMB 82.8 million from RMB 90.5 million, primarily due to a reduction in professional fees[36]. User Engagement and Product Development - The average monthly active users (MAUs) decreased to 22.5 million from 29.7 million in 2024, while the average monthly revenue per user increased to RMB 6.1, up 4.5% year-on-year[12][15]. - The membership penetration rate rose to 12.4%, compared to 11.1% in the previous year, indicating improved user engagement[12][15]. - The company launched the AI coach "Kaka" in March 2025, which has undergone multiple iterations to enhance its capabilities in personalized training plans and user interaction[18][19]. - The implementation of a multi-agent system (MAS) has been completed, integrating core fitness tools with AI capabilities for improved user experience[18]. - The company aims to improve user retention and activity while solidifying growth foundations through continuous iteration of AI coach capabilities and precise channel expansion in consumer goods[26]. Revenue Streams and Market Focus - Revenue from online memberships and paid content decreased by 22.9% to RMB 337.1 million from RMB 437.0 million, primarily due to a decline in online sports event revenue[29]. - Revenue from proprietary sports products was RMB 396.7 million, down 20.9% from RMB 501.5 million year-over-year, due to the active streamlining of inefficient product categories[28]. - Revenue from online sports events has contracted due to insufficient scheduling of major IP events, prompting the company to optimize operational efficiency and focus on niche segments[22]. - The consumer goods segment reported revenue of approximately RMB 400 million in the first half of 2025, with a gross margin increase of 3.3 percentage points to 34.8%[24]. Financial Position and Cash Flow - As of June 30, 2025, the total available cash amounted to RMB 1 billion, down from RMB 1.2 billion as of December 31, 2024, primarily due to cash used in financial asset investments and operating activities[41]. - The company's debt-to-asset ratio as of June 30, 2025, was 0.25, a decrease from 0.29 as of December 31, 2024, indicating improved financial stability[47]. - As of June 30, 2025, the company had no outstanding bank borrowings, reflecting a strong liquidity position[46]. - Cash and cash equivalents decreased from RMB 764,260,000 to RMB 533,991,000, a decline of 30% over the six-month period[118]. - The company experienced a net cash outflow from operating activities of RMB 59,259,000, an improvement from RMB 196,962,000 in the previous year[118]. Shareholder Information and Equity - As of June 30, 2025, the total number of issued shares, including treasury shares, is 525,671,987[55]. - Mr. Wang Ning holds a total of 87,379,118 shares, representing approximately 16.62% of the company's equity[58]. - GGV shareholders collectively hold 75,814,900 shares, accounting for approximately 14.42% of the company's equity[58]. - The company has not granted any new incentives or options under the pre-IPO share incentive plan since its listing[64]. - The total number of shares available for issuance under the plan is capped at 10% of the shares issued on the listing date, amounting to 52,567,199 shares[82]. Future Plans and Investments - The company plans to enhance its product offerings in apparel and AI wearable technology to drive growth in the second half of 2025[25]. - The company aims to establish a sustainable growth path through AI-driven strategies and operational efficiency improvements, enhancing its competitive edge in the fitness industry[16]. - The company plans to allocate approximately HKD 67.2 million (35%) of the net proceeds for R&D to enhance technical capabilities and drive product innovation by December 31, 2025[52]. - The company intends to invest HKD 5.8 million (3%) in acquiring exclusive fitness intellectual property and third-party content to expand content supply and meet evolving user needs[53]. Risk Management and Compliance - The company faced no significant interest rate or foreign exchange risks, as its financial assets and liabilities are primarily composed of fixed-rate instruments[50]. - The company has not identified any significant matters that may impact the group since June 30, 2025[105]. - The company has no significant contingent liabilities or guarantees as of June 30, 2025, indicating a low risk profile[48].