Core Viewpoint - LeMo Technology, known for its shared electric massage chairs, is set to go public on the Hong Kong Stock Exchange, aiming to raise approximately HKD 222 million through the issuance of 5.56 million shares at HKD 40 each, with the listing expected on December 3 [1] Company Overview - LeMo Technology is recognized as the leading provider in the machine massage service market in China, holding a market share of 33.9%, 37.3%, and 42.9% from 2022 to 2024 based on transaction volume, and over 50% based on revenue [1] - The company operates under the brand "LeMo Bar," providing services in various public locations such as shopping malls, cinemas, high-speed rail stations, and airports [1] Growth and Expansion - From 2022 to 2024, LeMo Technology is in a rapid growth phase, expanding its service points from 21,727 at the end of 2022 to 45,993 by the end of 2024, with over 53,300 massage machines deployed across 337 cities [2] - Revenue projections for the company are expected to grow from CNY 330 million in 2022 to CNY 798 million in 2024, representing an increase of approximately 150% over three years [2] Financial Performance - In the first eight months of 2023, LeMo Technology reported revenue of CNY 631 million, a year-on-year increase of 13.8% from CNY 554 million in the same period last year, indicating a slowdown compared to previous growth rates [2][3] - Profit figures show a significant increase from CNY 6.48 million in 2022 to CNY 87.34 million in 2023, but a slight decline is projected for 2024, with profits expected to decrease by 1.76% to CNY 85.81 million [3] Profitability and Margins - The gross profit margin for machine massage services was 24.66% in 2022 and increased to 41.47% in 2023, but is projected to decline to 36.16% in 2024, reflecting a drop of over 5 percentage points [3] - Despite a slight recovery in gross margin to 36.61% in the first eight months of 2023, it remains below the 41.32% recorded in the same period last year, indicating challenges in maintaining profitability [3] Market Challenges and Future Outlook - LeMo Technology acknowledges challenges in expanding its market share and penetration, including increased service point usage fees, rising equipment costs, and higher operational expenses associated with a direct sales model [4] - The overall market for machine massage services in China is projected to reach CNY 2.7 billion by the end of 2024, with expectations of growth to CNY 5.6 billion by 2029, suggesting that even as a market leader, LeMo Technology may face limitations in scaling [4] - The company plans to accelerate its overseas market expansion by increasing the number of massage machines sold to international partners, but faces challenges such as differing consumer preferences, higher labor costs, and difficulties in securing ideal service locations [4]