BEIJING,
March 28,
2024 /PRNewswire/ -- Keep Inc. ("Keep" or the
"Company"), the largest online fitness platform in China, today announced its audited annual
results for the year ended December 31,
2023.
Full Year 2023 Financial Highlights
- Total revenues were RMB2,137.8
million in 2023, a decrease of 3.3% from RMB2,211.6 million in 2022.
- Revenues from online membership and paid content were
RMB995.8 million in 2023, an increase
of 11.4% from RMB894.2 million in
2022.
- Gross profit was RMB961.6 million
in 2023, an increase of 6.8% from RMB900.4
million in 2022.
- Gross profit margin was 45.0% in 2023, a significant
improvement from 40.7% in 2022.
- Adjusted net loss was RMB295.4
million in 2023, compared with adjusted net loss of
RMB666.9 million in 2022.
- Adjusted net loss margin narrowed significantly to 13.8% in
2023, compared with 30.2% in 2022.
Full Year Operational Highlights
|
Year ended December 31,
|
|
2023
|
2022
|
Average monthly active
users ("MAU(s)") (in thousand)
|
29,756
|
36,388
|
Average monthly
revenues per MAU (in RMB)
|
6.0
|
5.1
|
Average monthly
subscribing members (in thousand)
|
3,193
|
3,621
|
Membership penetration
rate
|
10.7 %
|
10.0 %
|
Mr. Wang Ning, the CEO of Keep Inc., said,
"Throughout 2023, our focus remained firmly on refining our
products and services and improving operational efficiency to
navigate a challenging market environment. While weak consumer
sentiment impacted revenues from self-branded fitness products,
this was largely offset by an 11.4% increase in revenues from
online membership and paid content driven by the growth of virtual
sports events. This resulted in a significant expansion of our
gross margin to 45.0% from 40.7% last year. Adjusted net loss for
2023 narrowed significantly to RMB295.4
million from RMB666.9 million
in 2022 while adjusted net loss margin during the second half of
the year further narrowed to 6.3%, compared to 29.1% for the same
period of 2022."
"We continued to invest in the production of
premium online fitness content and app features to improve user
engagement and implemented prudent cost controls to support our
sustainable and resilient business model without impacting user
satisfaction for all our products, services, and sales networks.
Both average MAUs and average monthly subscribing members saw
moderating declines during the second half of 2023 and have begun
to recover when compared to the first half of 2023 which
underscores how we are regaining momentum. Supported by the
continuous growth of our virtual sports events, average monthly
revenues per MAU also increased by 17.6% year-over-year in 2023.
These initiatives have positioned us to drive long-term sustained
growth by generating high-quality revenue, expanding gross profit
margins, and improving operating leverage. With a solid foundation
now in place, our focus going forward in 2024 will be on refining
and executing our core business initiatives and further empowering
users pursuing healthy and active lifestyles."
Full Year 2023 Financial Results
Revenues
Total revenues were RMB2,137.8 million in 2023, a decrease of 3.3%
from RMB2,211.6 million in 2022,
primarily due to a decrease in revenues from self-branded fitness
products.
Revenues from self-branded fitness products were
RMB946.1 million in 2023, a decrease
of 16.8% from RMB1,137.0 million in
2022. The decrease was mainly attributable to (i) the overall
online consumer sentiment being lower than expected in a
challenging environment; (ii) an increase in offline leisure and
travel activities post-pandemic in 2023, leading to a decrease in
consumption of indoor fitness products; and (iii) cost controls for
product development, deployment, and marketing.
Revenues from online membership and paid content
were RMB995.8 million in 2023, an
increase of 11.4% from RMB894.2
million in 2022, mainly attributable to an increase in
revenues generated from virtual sports events.
Revenues from advertising and others were
RMB196.0 million in 2023, an increase
of 8.6% from RMB180.4 million in
2022, mainly attributable to a recovery in integrated
online-to-offline advertising campaigns during the second half of
2023.
Cost of Revenues
Cost of revenues was RMB1,176.2 million in 2023, a decrease of 10.3%
from RMB1,311.2 million in 2022. Cost
of revenues decreased significantly more than total revenues in
2023, primarily due to the effectiveness of cost controls.
Cost of self-branded fitness products was
RMB683.9 million in 2023, a decrease
of 16.3% from RMB816.9 million in
2022, in-line with the decrease in revenues from self-branded
fitness products.
Cost of online membership and paid content was
RMB370.1 million in 2023, a
decrease of 9.5% from RMB409.1
million in 2022, mainly attributable to decreases of (i)
RMB22.2 million in employee benefits;
(ii) RMB18.4 million in content
related costs; and (iii) RMB9.4
million in channel fees paid to third-party application
stores and other payment channels, which were partially offset by a
RMB26.8 million increase in costs
associated with virtual sports events.
Cost of advertising and others was RMB122.2 million in 2023, an increase of 43.5%
from RMB85.2 million in 2022, mainly
attributable to an increase of RMB31.9
million in advertising costs associated with integrated
online-to-offline advertising campaigns.
Gross Profit and Gross Profit Margin
Gross profit was RMB961.6
million in 2023, an increase of 6.8% from RMB900.4 million in 2022. Gross profit margin was
45.0% in 2023, a 4.3 percentage points increase from 40.7% in 2022,
mainly attributable to an increase in revenues and gross profit
contribution from online membership and paid content.
Gross profit from self-branded fitness products
was RMB262.2 million in 2023, a
decrease of 18.1% from RMB320.1
million in 2022, mainly attributable to the decrease in
revenues from self-branded fitness products.
Gross profit from online membership and paid
content was RMB625.7 million in 2023,
an increase of 29.0% from RMB485.1
million in 2022, mainly attributable to an increase in
revenues from online membership and paid content and the further
optimization of content related costs and employee benefits.
Gross profit from advertising and others was
RMB73.8 million in 2023, a decrease
of 22.5% from RMB95.2 million in
2022, primarily due to an increase in costs associated with
integrated online-to-offline advertising campaigns.
Fulfilment Expenses
Fulfilment expenses were RMB155.7 million in 2023, a decrease of 22.8%
from RMB201.6 million in 2022,
primarily due to a decrease in revenues from self-branded fitness
products and the further optimization of logistics and storage
costs.
Selling and Marketing Expenses
Selling and marketing expenses were RMB569.3 million in 2023, a decrease of 11.9%
from RMB646.2 million in 2022,
primarily due to a decrease of RMB79.2
million in promotional and advertising expenses following a
reduction in certain marketing spending activities and improved
user acquisition efficiency.
Administrative Expenses
Administrative expenses were RMB209.3 million in 2023, a decrease of 14.8%
from RMB245.6 million in 2022,
primarily attributable to a decrease of RMB47.6 million in administrative personnel costs
(including related share-based compensation expenses).
Research and Development Expenses
Research and development expenses were
RMB449.7 million in 2023, a decrease
of 16.2% from RMB536.9 million in
2022, primarily attributable to a decrease of (i) RMB59.3 million in research and development
personnel costs (including related share-based compensation
expenses); (ii) RMB17.0 million in
cloud computing service fees; and (iii) RMB7.8 million in outsourcing and other labor
costs.
Fair Value Changes of Convertible Redeemable
Preferred Shares
Fair value changes of convertible redeemable
preferred shares were RMB1.4 billion
for the year ended December 31, 2023,
compared with RMB665.0 million for
the year ended December 31, 2022. The
fair value changes of convertible redeemable preferred shares
before the Company's listing was primarily attributable to changes
in the valuation of the Company. Keep did not record any further
fair value changes of the convertible redeemable preferred shares
following the Listing as preferred shares liabilities were
redesignated and reclassified from liabilities to equity after
automatically converting into ordinary shares upon Listing.
Profit/(loss)
Profit was RMB1.1
billion in 2023, compared with a loss of RMB104.6 million in 2022, primarily attributable
to fair value changes of convertible redeemable preferred shares of
RMB1.4 billion for the year ended
December 31, 2023.
Adjusted Net Loss
Adjusted net loss (non-IFRS measure) was
RMB295.4 million in 2023, compared
with adjusted net loss of RMB666.9
million in 2022. Adjusted net loss margin was 13.8% in 2023,
compared with 30.2% in 2022.
Liquidity and Capital Resource
As of December 31,
2023, cash and cash equivalents were RMB1.6 billion, compared with RMB1.7 billion as of December 31, 2022. The decrease was primarily due
to the use of cash for operating activities, which was partly
offset by proceeds from the issuance of ordinary shares relating to
the Listing. Most of Keep's cash and cash equivalents were
denominated in Renminbi while most of the time deposits were
denominated in U.S. dollars.
Outlook
Keep remains optimistic about its long-term
growth prospects and will work towards improving efficiency in the
commercialization of services and products and improving profitability.
The Company's focus going forward will be
squarely on investing in immersive, exclusive, and professional
online fitness content that will form the foundation of its
business and allow it to acquire and retain high-quality users and
enhance its leadership position in the online fitness market.
Additionally, Keep is further expanding and refining its outdoor
fitness functions and products to better serve users going
outdoors. The Company recently launched a fully upgraded version
8.0 of its app that allows users to easily sort through classes,
offers deeper community engagement functionality, and facilitates
user feedback to recommend and inspire others to explore and join.
Moreover, the Company is developing and applying new technologies
and intelligent features by exploring AI-driven technology
application prospects in overseas markets. Keep plans to leverage
AI advancements to drive innovative and elevated fitness
experiences in a more efficient and distinguished manner, in order to attract new user groups and discover
new commercialization opportunities.
Conference Call
The Company's management will host an earnings
conference call at 8:00 p.m. Beijing
Time on March 28, 2024.
Participants who wish to join the call should
follow the following method:
1) Please click on the call link and complete
the online registration form. Kindly register at least one working
day before the event.
https://register.vevent.com/register/BI7ad91c739a6b4eccafb12cad2b58cc51
2) Upon registering you will receive the dial-in
info and a unique PIN to join the call as well as an email
confirmation with the details.
3) Select a method for joining the call:
-
- Dial-In: A dial in number and unique PIN are displayed to
connect directly from your phone.
- Call Me: Enter your phone number and click "Call Me" for an
immediate callback from the system. The call will come from a US
number, and this function is only applicable for participants
outside China.
4) Please dial in 15 minutes before the
call is scheduled to begin and provide the personal PIN to join the
call.
Additionally, a live and archived webcast of the
conference call will be available at
https://ir.keep.com/en/news_events.php.
About Keep Inc.
Keep Inc. (HKEX Stock Code: 3650) is the largest
online fitness platform in China in terms of MAUs and
number of workout sessions completed by users in 2022, according to
CIC. Keep offers a comprehensive fitness solution to help users
achieve their fitness goals. On the Keep platform, extensive,
professional, and premium fitness content with diverse activities
and services are offered to encourage users to engage in daily
exercise. Keep platform leverages AI technology to provide
personalized workout programs incorporating recorded courses and
interactive live streaming classes, dynamically customized to each
user's athletic levels, fitness goals, daily workout patterns and
diet. Keep's services seamlessly connect the physical and digital
realms, spanning smart devices, workout equipment, athletic apparel
and food to provide an immersive fitness experience. The Keep brand
has become synonymous with passion for fitness, and 77.5% of
fitness enthusiasts in China are aware of the Keep mobile
app. We've inspired millions to join our community, resulting in
29.8 million MAUs.
For more information on Keep Inc.,
visit https://keep.com/.
Forward-looking statements
This press release contains forward-looking
statements relating to the business outlook, estimates of financial
performance, forecast business plans and growth strategies of the
Company. These forward-looking statements are based on information
currently available to the Company and are stated herein on the
basis of the outlook at the time of this press release. They are
based on certain expectations, assumptions and premises, some of
which are subjective or beyond our control. These forward-looking
statements may prove to be incorrect and may not be realised in the
future. Underlying these forward-looking statements are a lot of
risks and uncertainties. In light of the risks and uncertainties,
the inclusion of forward-looking statements in this press release
should not be regarded as representations by the board of directors
of the Company or the Company that the plans and objectives will be
achieved, and investors should not place undue reliance on such
statements.
Non-IFRS Measures
To supplement our consolidated financial
statements, which are presented in accordance with IFRS Accounting
Standards as issued by the IASB, we also use adjusted net loss as
an additional financial measure, which is not required by, or
presented in accordance with, IFRS Accounting Standards.
The Company's management believe adjusted net
loss provides useful information to investors and others in
understanding and evaluating our consolidated results of operations
in the same manner as they help our management. However, our
presentation of adjusted net loss may not be comparable to
similarly titled measures presented by other companies. The use of
adjusted net loss has limitations as an analytical tool, and you
should not consider it in isolation from, or as a substitute for an
analysis of, our results of operations or financial condition as
reported under IFRS Accounting Standards.
CONSOLIDATED
STATEMENT OF PROFIT OR LOSS
|
|
|
Year ended December 31,
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
2,137,834
|
|
2,211,551
|
|
|
Cost of
revenues
|
|
|
(1,176,190)
|
|
(1,311,171)
|
|
|
Gross profit
|
|
|
961,644
|
|
900,380
|
|
|
Fulfillment
expenses
|
|
|
(155,652)
|
|
(201,586)
|
|
|
Selling and marketing
expenses
|
|
|
(569,266)
|
|
(646,177)
|
|
|
Administrative
expenses
|
|
|
(209,287)
|
|
(245,614)
|
|
|
Research and
development expenses
|
|
|
(449,700)
|
|
(536,877)
|
|
|
Other income
|
|
|
44,137
|
|
6,509
|
|
|
Other gains/(losses),
net
|
|
|
2,539
|
|
(65,375)
|
|
|
Operating loss
|
|
|
(375,585)
|
|
(788,740)
|
|
|
Finance
income
|
|
|
54,514
|
|
27,536
|
|
|
Finance
expenses
|
|
|
(5,282)
|
|
(7,313)
|
|
|
Finance income,
net
|
|
|
49,232
|
|
20,223
|
|
|
Fair value changes of
convertible redeemable
preferred shares
|
|
|
1,432,261
|
|
664,969
|
|
|
Profit/(loss) before income tax
|
|
|
1,105,908
|
|
(103,548)
|
|
|
Income tax
expense
|
|
|
-
|
|
(1,003)
|
|
|
Profit/(loss) for the
year
|
|
|
1,105,908
|
|
(104,551)
|
|
|
Profit/(loss) for the year attributable
to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
|
|
1,105,908
|
|
(104,551)
|
|
|
Non-controlling
interests
|
|
|
-
|
|
-
|
|
|
|
|
|
1,105,908
|
|
(104,551)
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
|
|
|
|
|
As at December 31,
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Property and
equipment
|
|
|
|
17,982
|
|
30,603
|
|
Right-of-use
assets
|
|
|
|
62,256
|
|
90,659
|
|
Intangible
assets
|
|
|
|
11,561
|
|
9,316
|
|
Financial assets at
fair value through
profit or loss
|
|
|
|
13,519
|
|
15,000
|
|
Other non-current
assets
|
|
|
|
51,994
|
|
58,763
|
|
|
|
|
|
157,312
|
|
204,341
|
|
Current assets
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
121,380
|
|
167,737
|
|
Accounts
receivables
|
|
|
|
228,279
|
|
251,676
|
|
Prepayments and other
current assets
|
|
|
|
174,842
|
|
128,966
|
|
Financial assets at
fair value through
profit or loss
|
|
|
|
65,199
|
|
139,864
|
|
Short-term time
deposits
|
|
|
|
88,960
|
|
68,740
|
|
Cash and cash
equivalents
|
|
|
|
1,612,769
|
|
1,672,217
|
|
|
|
|
|
2,291,429
|
|
2,429,200
|
|
Total assets
|
|
|
|
2,448,741
|
|
2,633,541
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
|
|
|
|
|
|
As at December 31,
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
|
|
|
EQUITY/(DEFICIT IN EQUITY)
|
|
|
|
|
|
|
|
Equity/(deficit in
equity)
attributable to owners of the
Company
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
168
|
|
61
|
|
Other
reserves
|
|
|
|
8,187,464
|
|
(89,833)
|
|
Accumulated
losses
|
|
|
|
(6,314,483)
|
|
(7,420,391)
|
|
Equity/(deficit in
equity) attributable
to owners of the Company
|
|
|
|
1,873,149
|
|
(7,510,163)
|
|
|
|
|
|
|
|
|
|
Total equity/(deficit in
equity)
|
|
|
|
1,873,149
|
|
(7,510,163)
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Lease
liabilities
|
|
|
|
32,453
|
|
59,069
|
|
Convertible redeemable
preferred
shares
|
|
|
|
-
|
|
9,401,472
|
|
Other non-current
liability
|
|
|
|
10,968
|
|
16,048
|
|
|
|
|
|
43,421
|
|
9,476,589
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts
payables
|
|
|
|
157,417
|
|
154,095
|
|
Accrued
expenses
|
|
|
|
177,355
|
|
244,537
|
|
Other current
liabilities
|
|
|
|
57,838
|
|
65,301
|
|
Contract
liabilities
|
|
|
|
93,280
|
|
84,104
|
|
Borrowings
|
|
|
|
10,009
|
|
74,524
|
|
Lease
liabilities
|
|
|
|
36,272
|
|
44,554
|
|
|
|
|
|
532,171
|
|
667,115
|
|
Total liabilities
|
|
|
|
575,592
|
|
10,143,704
|
|
Total equity/(deficit in equity) and
liabilities
|
|
|
|
2,448,741
|
|
2,633,541
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles our adjusted net
loss for the years presented to the most directly comparable
financial measure calculated and presented in accordance with IFRS
Accounting Standards, which is profit/(loss) for the years ended
December 31, 2023 and 2022:
|
For the year ended December, 31
|
|
2023
|
|
2022
|
|
RMB'000
|
RMB'000
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Reconciliation of profit/(loss) to adjusted net loss
(Non-IFRS measure):
|
Profit/(loss) for the
year
|
1,105,908
|
|
(104,551)
|
Adjustments for:
|
|
|
|
Share-based payment
expenses
|
30,935
|
|
102,613
|
Fair value changes of
convertible redeemable preferred shares
|
(1,432,261)
|
|
(664,969)
|
Adjusted net loss for the year (Non-
IFRS measure)
|
(295,418)
|
|
(666,907)
|
View original
content:https://www.prnewswire.com/news-releases/keep-inc-announces-2023-annual-results-302102404.html
SOURCE Keep Inc.