Chinese Fitness App Keep Updates HKEx Prospectus
On September 6, Keep, a Beijing-based sports tech firm, updated its prospectus on the Hong Kong Stock Exchange (HKEx) when its IPO application status turned “invalid” because it failed to pass the hearing within 6 months after submitting the original prospectus. The updated document shows that in the six months ending June 30, 2022, the fitness app Keep’s average monthly users were 37.7 million, an increase of 13% compared with the same period in 2021, and the average monthly users reached 41.08 million in the second quarter of 2022.
Keep also achieved growth in revenues. It achieved revenues of 1.107 billion yuan ($159.1 million) in 2020 and 1.619 billion yuan in 2021, and achieved revenues of 417 million yuan in the three months this year ending March 31, 2022, up 37.6% year-on-year.
Keep’s losses narrowed. According to the updated prospectus, in the three months ending March 31, 2022, its adjusted net loss (measured by non-IFRS) was 155 million yuan, the figure was 237 million yuan in the same period of 2021.
According to the prospectus, during the reporting period, Keep-branded products (consumer goods), members and online paid content, ads and other areas, are the three main businesses of the company. After entering 2021, member business and online businesses have grown rapidly. Its average monthly paid subscribers has increased more than four times from 800,000 in 2019 to 3.28 million in 2021, and increased to 3.67 million in the six months ending June 30, 2022, up 27% year-on-year.
In the first quarter of 2020, 2021 and 2022, its member business income recorded 338 million yuan, 558 million yuan and 161 million yuan respectively, with year-on-year increases of 65% and 75% respectively.
Keep’s membership penetration rate has also maintained steady growth, hitting 6.4% and 9.5% in 2020 and 2021 respectively, and 9.7% in the first half of 2022.
In addition, Keep was also able to retain its members as the monthly average member retention rates were 70.8% in 2019, 73.3% in 2020, 71.7% in 2021 and 69.4% in the six months ending June 30, 2022.
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On February 25 this year, Keep submitted its prospectus for the first time with the intention of going public in Hong Kong. Co-sponsors included Goldman Sachs and CICC. However, although Keep’s revenue has been growing, it is facing years of losses and its profitability is in doubt. It is worth noting that a few days ago, due to the failure to pass the hearing within 6 months after submitting its prospectus, the IPO application status turned into “invalid” and needed to be resubmitted to continue the process.