[key points of investment]
The company is the largest online fitness platform in China and the world, developing comprehensive fitness solutions, covering the whole fitness life cycle of users. In 2021, according to the monthly active users (34.4 million on average) and the number of exercises completed by users (1.7 billion), keep is the largest online fitness platform in China and the world. Keep is a fast-growing and delivery oriented platform with innovation as the core, providing users with comprehensive fitness solutions.
Fitness penetration has increased steadily, and online fitness is in the ascendant. By 2021, China’s fitness population has reached 303 million, with a penetration rate of 21.5%, compared with 48.2% in the United States and 41.2% in Europe. China still has great potential for improvement. Policy support, revenue growth and health awareness promote the development of the industry. The market scale of China’s fitness market is expected to increase from 786.6 billion in 2021 to 1479.3 billion in 2026. The market concentration of online fitness content platform is high, and the overall pattern of “one super and many strong” is presented. In terms of average monthly active users and average monthly subscription members in 2021, keep ranks first among China’s online fitness platforms.
Monthly active users grew rapidly, single user expenditure increased significantly, professional content + personalized recommendation, and social attributes enhanced stickiness. Keep users are younger, with a high proportion of first and second tier cities, with an average of 74.1% under the age of 30; On average, about 52.2% come from China’s first tier, new first tier and second tier cities. In 2021, with the strategic increase of user acquisition and brand promotion expenditure, keep had more than 40 million monthly active users. Keep is a highly participatory and interactive community: 1) internally developed PGC content builds core competitiveness, and pugc and aigc flourish; 2) According to the user’s physical condition and fitness progress, the recommended algorithm matches the fitness content and talent; 3) Follow other keepers and communicate with them through comments and instant messages.
Realize commercial realization through private brand products, member subscriptions and advertising. In the first three quarters of 2021, the company achieved an operating revenue of 1.159 billion, a year-on-year increase of 41.3%, and a loss of 696 million in the adjusted period. By business: private brand products accounted for 55.1%, with a growth rate of 33.6%; Member subscriptions and online paid content accounted for 32.8%, with a growth rate of 52.5%; Advertising and other services accounted for 12.1%, with a growth rate of 51.0%. Member business has become an important growth engine.
[configuration suggestions]
We are optimistic about the development of China’s sports and national fitness industry. On the one hand, the sports and national fitness industry are supported by national policies. National fitness is conducive to national health and reduces the pressure of medical insurance. It is expected to continue to receive government support in the future. On the other hand, with China’s economic development and the improvement of residents’ health awareness, the popularity of fitness is expected to continue to improve, and the willingness to consume will also increase. We are cautiously optimistic about Shanghai Lisheng Racing Co.Ltd(002858) , and suggest paying attention to China Sports Industry Group Co.Ltd(600158) , Jiangsu Jinling Sports Equipment Co.Ltd(300651) , Wuhan Ddmc Culture & Sports Co.Ltd(600136) , Lander Sports Development Co.Ltd(000558) .
[risk tips]
User growth is less than expected
Decline in macroeconomic growth
