Chinas biggest online fitness platform Keep to list in Hong Kong after two failed IPO attempts

China’s largest online fitness platform Keep Inc will begin trading in Hong Kong on Wednesday after two previous attempts failed.

The Beijing-based company, backed by Japan’s SoftBank Group, raised HK$313.5 million (US$40 million) from the sale of 10.84 million shares in an initial public offering (IPO), according to an exchange filing. The IPO was priced at the low end of a wide band between HK$28.92 and HK$61.46.

China International Capital Corp (CICC) is the sole sponsor of the deal, with GF Securities, CCB International and Futu Holdings acting as joint bookrunners and lead managers.

Keep’s listing will give global investors access to China’s fitness market, a niche segment of the consumer sector in the Asian nation. China had the most number of fitness enthusiasts in the world at 374 million last year, according to Keep’s prospectus, which cited research from CICC. That number is expected to grow by 24 per cent to 463.5 million by 2027, while per-capita spending on physical fitness in China is only about a sixth of that in the US, implying huge room for growth, it added.

“With our online fitness solutions, we have addressed major pain points in China’s fitness market and fundamentally redefined people’s relationship with fitness,” the company said in the prospectus. “Our Keep brand is highly influential and has become synonymous with a passion for fitness.”

The IPO proceeds will be used for research and development, development and diversification of fitness content, branding and promotion, and working capital, it said.

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Man works out with suitcase on train in China

Man works out with suitcase on train in China

Keep’s monthly active users averaged 36.3 million last year, increasing from 34.4 million in 2021 and 29.7 million in 2020, according to company data.

Sales of self-branded products, including yoga mats, dumbbells, gym wear and accessories, contributed to 51 per cent of its revenue last year, while memberships and online paid content such as recorded and live-streaming fitness courses made up 40 per cent, with advertising accounting for the rest, the prospectus showed.

While first-quarter revenue increased 7.2 per cent year on year to 447 million yuan (US$62.1 million), Keep posted a net loss of 118 million yuan in the period because of high operating costs, extending a four-year streak.

Keep’s two previous IPO applications were rejected by the Hong Kong stock exchange in February and September last year.

Hong Kong IPO fundraising drops to 20-year low in first half of year

Hong Kong’s IPO market has witnessed a pickup recently after a slow start to the year because of soured sentiment in the broader market.

This week, Wuxi Biologic, China’s biggest biologic drug services company, unveiled a plan to spin off and list its international business, joining a raft of biotech companies filing to list in the city.

Hong Kong-based Insilico Medicine aims to launch a US$200 million IPO, according to sources.

Meanwhile, Sichuan Kelun-Biotech Pharmaceutical rose 3.2 per cent on debut on Tuesday after raking in US$208.6 million.

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