From "Fat Loss and Muscle Gain" to "Industry + AI" Leading Sports Technology Company Keep(03650)'s Profit Turning Point and Value Reassessment

In 2025, Keep (03650) delivered a historic report: the adjusted net profit for the year reached 25.216 million yuan, marking a strong rebound of nearly 500 million yuan compared to 2024. This milestone breakthrough of the breakeven point is reflected not only in a structural optimization with a year-on-year gross margin expansion of 5.5 percentage points to 52.2%, but also in approximately 60% of the profit contribution coming from the second half of the year. This steep quarter-on-quarter improvement curve establishes the intrinsic and sustainable nature of profit recovery.

According to Zhituo Finance APP, Keep is reshaping the underlying code of its business model: using robust cash flow generated from self-owned brand consumer products as a “ballast,” combined with the marginal cost reduction brought by AI’s full-chain penetration, the company is evolving from a singular “content platform” to an “AI fitness ecosystem with substantial industrial depth.” This dual-driven approach of “hard products + soft intelligence” not only enhances cyclical resilience but also redefines the valuation boundaries of the sports health industry.

Looking ahead to the next growth cycle, Keep’s strategic focus has fully shifted from “broad user acquisition” to “deepening individual customer value.” Horizontally, the company will rely on core sports scenarios to solidify the physical foundation of its business closed loop through iterations of high-margin consumer product matrices; vertically, it is committed to transforming vast user behavior data into high-precision “panorama sports characteristic maps.” By converting discrete sports profiles into reusable data assets, Keep is continually strengthening its algorithmic barriers and competitive moat, ushering in a new paradigm of high-quality development driven by data intelligence.

Proactively “reducing fat” for “gaining muscle”: Revenue structure optimization drives gross margin expansion for three consecutive years

In the fiscal year 2025, Keep completed a profound strategic “metabolic reorganization,” with the core logic being to achieve a “muscle gain” effect in core business by proactively “reducing fat” and divesting inefficient assets. The annual revenue recorded was 1.637 billion yuan, a year-on-year decline of 20.7%. This figure does not represent a loss of growth momentum but is a strategic contraction result of the company aligning with market cycles and decisively clearing low-margin capacity.

Specifically, the structural adjustment of revenue mainly stems from two dimensions of proactive trade-offs: First, on the hardware side, the company decisively divested low-margin product lines such as home fitness equipment and smart bands, terminating the resource consumption of non-core assets; second, on the service side, influenced by the natural decline of last year’s hot IP event, the company correspondingly reduced the scale of its online sports events, avoiding irrational investments that sacrifice profits to maintain inflated revenue. This “decluttering” business restructuring aims to allocate limited resources precisely to high-margin and high-repurchase core areas such as membership subscriptions, fitness equipment, and apparel, laying the groundwork for long-term sustainable growth.

Accompanied by the “slimming down” of revenue scale, Keep’s “body fat rate”—namely, gross margin—has welcomed its third consecutive year of structural expansion. Behind this excellent performance is the dual driving force of supply chain efficiency and technological effectiveness: on the supply side, the company significantly reduced the unit cost of physical goods through bulk purchasing negotiations, cost-reduction engineering designs, and refined logistics management; on the operational side, the deep integration of AI technology restructured content production processes and business flow efficiency, optimizing organizational productivity concurrently.

“Industry + AI” dual-driven approach: Consumer products build a solid cash flow base, technology reconstructs cost curve

Keep’s profit inflection point is a testament to the structural resilience of its “AI fitness ecosystem with industrial roots” business model, which exhibits strong adaptability amid cyclical fluctuations. This model builds a unique cyclical moat through the deep coupling of “hard assets” and “soft intelligence”: the self-owned brand consumer products business provides stable operational cash flow, while the comprehensive penetration of AI technology significantly reshapes the marginal cost structure, with both working in synergy to drive a paradigm shift from “traffic monetization” to “value deepening.”

In the dimension of physical business, the self-owned brand consumer products business has established itself as the company’s core “ballast.” In the fiscal year 2025, this segment recorded a revenue of 778 million yuan. Furthermore, the profitability quality of this segment achieved a qualitative leap—with the gross margin expanding by 4.1 percentage points year-on-year to 35.8%.

A more critical structural change lies in the optimization of the product matrix: the core sports equipment category has surpassed 60% in revenue contribution and maintained positive growth throughout the year. This data validates Keep’s “high-quality medium-price” strategy’s strong penetrative power amid the trend of consumption upgrading, successfully occupying a high cost-performance ecological position in the users’ mindset. Through vertical integration of the supply chain, bulk purchasing negotiations, and refined logistics execution efficiency, the company has built a robust blood-generating mechanism in the physical goods sector, smoothing out the cyclical fluctuations of purely internet-based business and providing ample and stable free cash flow support for overall operations.

In the dimension of digital intelligence, AI technology has completed the transformation from a mere infrastructure investment to a core profit-driving engine. Keep has achieved significant economies of scale and marginal cost reduction by deeply embedding large models and algorithms throughout the content production (AIGC), personalized services, and operational decision-making processes.

Data shows that AI coaches have cumulatively generated customized workout plans for over 1.3 million users, with voice running features invoked over 21 million times, and food recognition processing exceeding 3.5 million images. This large-scale, low marginal cost supply of intelligent services has completely broken the linear growth bottleneck of the traditional fitness industry, which relies on high-cost human trainers, significantly lowering the average cost curve of content production. AI is no longer just a tool for enhancing experience but has become a financial lever directly driving gross margin expansion.

The dual-driven effect of “industry + AI” has been quantitatively verified in user retention and activity metrics. In 2025, although the total number of monthly active users (MAU) was proactively adjusted due to strategic focus, the “gold content” of user assets has significantly improved: the daily active user (DAU) sports participation rate increased by 5.3 percentage points year-on-year to 57.8%. The average monthly exercise duration for MAUs grew by 6.9% year-on-year, and the DAU next-day retention rate improved by 2.7 percentage points to 41.7%.

Notably, the user group that frequently utilizes AI data analysis features has a next-day retention rate as high as 69%, far exceeding the market average. This differentiated data indicates that Keep is locking in users’ physical exercise scenarios through “hard products” and occupying users’ decision-making time and mindset through “soft intelligence,” creating a closed-loop effect that greatly enhances the user lifecycle value. This competitive barrier built through the combination of physical delivery and digital services has a high imitation threshold, marking Keep’s evolution from a single traffic platform to a fitness technology ecosystem with deep industrial roots and intelligent core.

From traffic operations to asset accumulation: Building “panorama sports characteristic maps” to initiate a new cycle of data intelligence

Looking ahead, Keep’s growth logic will further shift from “traffic acquisition” to “data asset deepening.”

Against the backdrop of peak mobile internet traffic, the ten-year cumulative user base of over 400 million and 14 billion sports records in Keep’s hands has become its most core strategic asset. In 2025, the company officially transformed these discrete user behavior data into a “panorama sports characteristic map” encompassing 17 categories of tags and over 700 indicators, enhanced by AI capabilities.

The establishment of this map marks Keep’s excavation of user value entering the micro-granularity era. It not only provides precise insights into users’ underlying sports characteristics and behavioral habits but also offers limitless possibilities for the diversification of future business models. Based on this map, Keep will be able to provide more precise personalized services, extending from singular sports guidance to the broader field of health management, even exploring cutting-edge application scenarios such as large language models for sports health and AI agents.

In 2026, Keep has clearly stated that profits generated from online business will prioritize reinvestment into AI technology research and development, further strengthening data barriers. The strategic focus will revolve around core users and core scenarios (indoor fitness, outdoor running): on one hand, continuously iterating the high-margin consumer product matrix to deepen the “high-quality medium-price” brand moat; on the other hand, utilizing AIGC technology to rapidly expand high-value vertical sports content such as tennis and skiing, achieving low-cost content category expansion.

In summary, Keep has completed a profound transformation from a single “traffic-based fitness app” to a composite fitness technology ecosystem “based on industry and centered around intelligence.” Looking to the future, as the dual-driven effect of “industry + AI” continues to be released, Keep is gradually shedding the valuation labels of traditional internet companies, instead anchoring itself to a new coordinate of “data intelligence-driven sports technology giant.” This signifies the start of a new cycle of high-quality value reassessment supported by intrinsic blood-generating capabilities and defined by data intelligence.