KEEP(03650) 国泰君安·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for KEEP (3650) [3][10]. Core Views - The company has significantly reduced losses through optimizing its business structure and cost control measures, and the future outlook remains positive due to its comprehensive fitness content and sports products [2]. - In 2023, the company achieved revenue of 2.138 billion RMB, a decrease of 3.3%, with an adjusted loss of 295 million RMB, which is an improvement from the previous year's loss of 667 million RMB [2]. - The report anticipates a slight increase in expenses for 2024-2025, adjusting the forecasted net profit to -267 million RMB and -56 million RMB respectively, with a projected adjusted net profit of 81 million RMB for 2026 [2]. Revenue Breakdown - Revenue by segment in 2023: - Proprietary sports products: 946 million RMB, down 16.8% - Online membership and paid content: 996 million RMB, up 11.4% - Advertising and others: 196 million RMB, up 8.6% [2]. - Average monthly active users decreased by 18.2% to 29.756 million, while subscription members decreased by 11.8% to 3.193 million, attributed to external environmental impacts and cost control strategies [2]. Profitability and Cost Control - The gross margin improved to 45%, an increase of 4.27 percentage points, with specific segments showing varied performance: - Proprietary sports products: 27.7%, down 0.43 percentage points - Online membership and paid content: 62.8%, up 8.58 percentage points - Advertising and others: 37.6%, down 15.1 percentage points [2]. - The adjusted loss margin was -13.8%, an improvement of 16.4 percentage points, achieved through reduced marketing activities and optimized logistics and personnel structures [2]. Product and Content Development - By the end of 2023, the platform offered 4,225 recorded courses to paid members, an increase of 2,352 courses, with a significant rise in workout frequency among members [2]. - New virtual events and challenges were launched to enhance brand recognition among niche audiences, resulting in a record high average revenue per paid user, increasing by over 30% [2]. - The company focused on optimizing the design and cost structure of smart devices, launching several new products that received positive feedback [2].