Home fitness equipment listed company

Smart fitness brand Keep (03650.HK) listed on the Hong Kong Stock Exchange, Shuhua Sports (605299.SH), a leader in mass fitness equipment on the Shanghai Stock Exchange, Impulse (002899.SZ), a major cross-border exporter on the Shenzhen Stock Exchange, and Rongtai Health (603579.SH), a home massage and fitness equipment manufacturer on the Shanghai Stock Exchange； The entire track is in a bubble-squeezing cycle after the epidemic dividend ebbs. The paths of the four companies are extremely divergent. There is no universal growth logic, and it is far from a foregone conclusion.

A while ago, I helped a friend who had just moved to a new house choose adjustable dumbbells. After looking through the JD.com sales list, 3 of the top 10 models were from Shuhua. I went to an offline store to touch the actual products. The damping feel of the buckles and the anti-skidness of the outer rubber were indeed much stronger than those of other brands with free shipping for NT$99. After all, it is a listed company. The annual investment in the quality inspection line is higher than the annual revenue of many small factories. There is really no quality control. On an interesting note, the store clerk told me that the customer base that comes to the store to buy home equipment now is far different from two years ago: nine out of ten people who came into the store in 2022 were young people asking about fitness mirrors and spinning bikes. Now half of them are parents who drop by to pick up their children from school. They choose indoor horizontal bars, children's trampolines, and simple rehabilitation training equipment for the elderly.

The most controversial of the four companies is definitely Keep. After all, it started out as a fitness APP to cross-border hardware. When it was launched a few years ago, it was notorious for "losing money every year." Many people felt that it just made money by speculating on concepts. But if you look at its mid-term report for 2024, smart hardware revenue has accounted for 62% of total revenue, and the monthly retention rate of users who bought hardware is nearly three times higher than that of pure APP users. The industry has been arguing about its path for almost two years. One group is the "closed-loop content group". They believe that the biggest pain point of home fitness is not not having equipment, but buying equipment that accumulates dust. Keep connects courses and hardware, and follows live classes to ride spinning bikes and use fitness mirrors to correct movements. The essence is to sell "fitness services that can be sustained". This is the direction of the future. ； The other school is the "pragmatist school", which believes that it is purely an IQ tax. The function of a fitness mirror with a few thousand yuan is no different from that of a mobile phone. Ordinary people can spend dozens of yuan to buy a yoga mat and follow free courses to have the same effect. You can see that the sales of Keep fitness mirrors are now 40% lower than the peak in 2022. This is the result of consumers voting with their feet.

Impulse is taking the completely opposite path to Keep. Domestic consumers may have rarely heard of this brand, but more than 70% of their income comes from cross-border channels in North America and Europe. Their main focus is cost-effective folding treadmills and elliptical machines. Their basic folding treadmill was out of stock on Amazon for nearly a month during Black Friday last year. Friends I know who are engaged in cross-border e-commerce have praised the stability of Impulse, saying that the penetration rate of overseas home fitness is 10 percentage points higher than that in China. Many families really regard home exercise as a daily habit. The demand is rigid, unlike many people in China who followed the trend and bought during the epidemic. ； However, some brokerage analysts are not optimistic about this path, saying that relying too much on overseas markets is too risky. Last year, the European Union imposed a round of import tariffs on fitness equipment. Impulse's net profit for the year fell by 12 points. If exchange rates fluctuate and problems occur in the overseas supply chain, one year's profits may be wiped out.

Don’t think that all listed companies are making a lot of money. Among the four, only Rongtai Health’s net profit margin will exceed 8% in 2023, and Shuhua Sports’ net profit margin will be less than 3%, which is lower than the profit margin of selling bottled water. To put it bluntly, it is a roll. The cost of a PVC yoga mat made by a small factory in Yiwu is only 5 yuan, and it can be sold for 19.9 with free shipping. The environmentally friendly TPE raw materials, dust-free production workshops, and third-party quality inspection used by listed companies are directly three times higher than that of small factories. Consumers will not buy it if it is too expensive, and it will not cover the cost if it is too cheap. More than 90% of the hundreds of small fitness equipment brands that emerged during the epidemic in the past two years have now gone bankrupt.

I bought an entry-level massage chair from Rongtai for my mother two years ago. I compared several brands with the same price at that time and found that Rongtai's 3D movement can really hit the pain points of the trapezius muscles. I have been using it for almost 3 years without any problems. In recent years, they have also been looking for new growth points. They have combined massage with fitness and relaxation scenarios, and have produced massage chairs with muscle stretching and post-exercise fascia relaxation functions. They are specifically targeted at home fitness people and are selling well. This is actually the advantage of listed companies. They can spend tens of millions of R&D funds every year to develop differentiated products. Small factories simply cannot afford this investment.

In fact, the entire home fitness equipment industry is still trying to find its way. Some people are betting on the intelligent closed loop of content + hardware, some are focusing on the rigid needs of overseas mature markets, and some are tapping into the needs of segmented scenarios. It is hard to say who can really succeed. The only thing that is certain is that the players who relied on the epidemic to speculate on concepts and make quick money by selling inferior equipment in the past two years have long been eliminated. The listed companies that are still alive today have more or less real things in their hands that others cannot copy.