Core Viewpoint - LeMo Technology (2539.HK) debuted on the Hong Kong stock market at an issue price of HKD 40 per share, experiencing a significant first-day increase of 36.25% to close at HKD 54.5, despite a generally unfavorable market environment for new listings [2][22]. Company Overview - LeMo Technology has deployed 535,000 massage chairs across cinemas, shopping malls, and transportation hubs, establishing itself as the industry leader [2][22]. - The company plans to allocate 60% of the net proceeds from its fundraising (HKD 1.82 billion) towards expanding its service network, emphasizing a scale-first approach [2][22]. Financial Performance - The company has faced a "revenue without profit" dilemma, with revenue growth slowing and profit margins contracting, indicating a mismatch between scale expansion and profitability [6][28]. - Revenue increased from RMB 330.15 million in 2022 to RMB 797.99 million in 2024, reflecting a compound annual growth rate of 55.5%, but growth rates have shown a clear downward trend [29][30]. - In 2023, revenue surged by 77.75% due to domestic consumption recovery, but growth is expected to drop to 35.98% in 2024 and further slow to 13.8% in the first eight months of 2025 [30][31]. Cost Structure - Sales costs have risen sharply, with 2022 costs at RMB 244.82 million, increasing to RMB 510.19 million in 2024, outpacing revenue growth for the first time [9][31]. - The total number of massage devices increased from 167,100 in 2022 to 536,400 by 2025, but this expansion has not translated into improved profitability, leading to lower per-device revenue [10][32]. Profitability Issues - Operating profit has shown a decline, with 2023 profits at RMB 87.34 million, slightly decreasing to RMB 85.81 million in 2024, and further dropping to RMB 88.55 million in the first eight months of 2025 [34][33]. - The gross profit margin has fluctuated, peaking at 41.47% in 2023 but falling to 36.16% in 2024, indicating challenges in maintaining profitability amid rising costs [36][14]. Market Challenges - The massage service market in China is projected to be only RMB 2.7 billion in 2024, representing just 0.5% of the overall massage market, limiting the potential for large-scale expansion [41]. - The company faces scrutiny regarding the authenticity of its reported device numbers, with investigations revealing discrepancies in device ID distributions [41][39]. Consumer Experience and Controversies - LeMo Technology has encountered consumer safety issues, including incidents where users have been injured while using their massage chairs, leading to negative public perception [37][15]. - The company's app has received low ratings due to complaints about refund processes and customer service, which may impact user experience and retention [39][17]. Future Outlook - The company acknowledges the challenges of sustaining growth and profitability, with its founder expressing concerns about reaching a revenue ceiling without significant strategic changes [23][20]. - The upcoming years will be critical for LeMo Technology as it navigates market pressures and seeks to establish a more sustainable business model [42][20].

Core Viewpoint - LeMo Bar, a prominent brand under Fujian LeMo IoT Technology Co., Ltd., is expanding rapidly in the shared massage chair market and is preparing for an IPO in Hong Kong, presenting both opportunities and challenges for potential investors [1]. Group 1: Company History - LeMo Bar was established in 2016 during the rise of the sharing economy, founded by Xie Zhonghui and Han Daohu, targeting the blue ocean of shared massage chairs [3]. - By July 2025, LeMo Bar is expected to have over 48,000 service points and more than 535,000 massage devices deployed, serving over 165 million identifiable users and 32 million registered members [3]. - LeMo Bar has maintained the top market share among smart massage service providers in mainland China from 2021 to 2023, increasing its market share from 29.4% to 37.3% [3]. Group 2: Competitive Advantages - LeMo Bar has established strong brand recognition, with a brand awareness rate of over 70% in high-frequency consumption scenarios, facilitating market entry for franchisees [4]. - The company effectively integrates massage services into daily life, capitalizing on consumers' fragmented time, with about 30% of cinema-goers opting to use LeMo Bar chairs while waiting for movies [4]. - LeMo Bar operates a dual-track business model of direct sales and partner franchises, with the partner model offering a high gross margin of 74.44% in the first nine months of 2024 [5][6]. Group 3: Investment Considerations - The initial investment for franchisees is relatively low, with costs for a massage chair ranging from 3,000 to 6,000 yuan, and a small shopping mall setup costing around 60,000 to 80,000 yuan [8]. - The average payback period for a massage chair in high-traffic areas is estimated at 6 to 10 months, with potential monthly revenues of 4,500 to 6,750 yuan per chair [8]. - LeMo Bar continuously innovates its product offerings, such as the new "Vitality Egg" series, enhancing user experience with features like heat therapy and personalized massage programs [9]. Group 4: Challenges and Risks - Different scenarios exhibit varying profitability; for instance, while 76% of massage chairs are in cinemas, they only contribute 26% of revenue due to fixed consumer stay times [11]. - Maintenance and hygiene management pose significant challenges, with each chair experiencing 1-2 minor faults monthly and potential serious issues quarterly [12]. - The competitive landscape is intensifying, with numerous brands and traditional manufacturers entering the shared massage chair market, increasing pressure on LeMo Bar [13]. - Negative consumer feedback regarding service quality, such as equipment malfunctions and poor customer service, can undermine brand trust [15]. - Financial pressures are evident, with rising marketing expenses and decreasing cash reserves, which may impact future investments in technology and support for franchisees [16].

Core Viewpoint - The article discusses the growth and market position of "Lemo Bar," a company specializing in shared massage chair services in China, highlighting its upcoming IPO and significant market presence. Company Overview - Lemo Bar's parent company, Fujian Lemo IoT Technology Co., Ltd., has submitted an IPO application to the Hong Kong Stock Exchange, with a focus on expanding its massage chair services across China [6]. - Established in May 2014, Lemo Bar operates in high-traffic public areas, providing self-service massage through mobile payment options [6][10]. Market Position - Lemo Bar has over 48,000 service points and 535,000 massage machines across 339 cities in China, achieving profitability with a net profit exceeding 80 million yuan [6][8]. - The company holds a market share of over 50% in the machine massage service sector, ranking first in transaction volume among its competitors from 2022 to 2024 [8]. Financial Performance - Revenue from machine massage services accounted for over 95% of total income, with reported revenues of 330 million yuan, 587 million yuan, and 798 million yuan for 2022, 2023, and 2024 respectively, showing significant year-on-year growth [10][11]. - The company’s net profit saw a dramatic increase, with a year-on-year growth of 1,248% in 2023 [11]. Expansion Strategy - Lemo Bar plans to use the funds raised from the IPO to expand its service network, enhance technology, and improve brand recognition [11]. - The company aims to increase its service points from 21,727 in December 2022 to 45,993 by December 2024, representing a compound annual growth rate (CAGR) of approximately 45.49% [7].