According to the "Star Daily" on March 3 (reporter Xu Cihou, researcher Liang Youyun), Future Wearable Health Technology Co., Ltd. (hereinafter referred to as "Future Health") recently completed its listing guidance filing and plans to IPO on the BSE, with CSC as the guiding institution.

Future Health was established in 2007, initially focusing on White Appliances as its main business. In 2016, it launched its first cervical massager, which became a best-selling product, and gradually began to focus on the field of wearable health products.

It is reported that "Future Health" is the parent company of the small massager SKG brand. Future Health primarily engages in the independent design, commissioned production, and multi-channel marketing of wearable and portable health products, specifically including cervical massagers, eye massagers, waist massagers, fascia guns, knee massagers, health watches, and more.

Due to the low penetration rate of massagers in China and inconsistent quality control, both leading brands and private labels are facing certain growth dilemmas and demand controversies. Different manufacturers find it difficult to distinguish themselves significantly, and market competition is extremely fierce. This may make the IPO path for Future Wearable more complicated.

Revenue fluctuations have rebounded, yet it remains on the "cold bench" of the National Equities Exchange and Quotations.

Before this round of listing attempts, Future Health had previously aimed for an IPO on the GEM. On June 27, 2022, the Shenzhen Stock Exchange accepted its IPO application, issued its first round of inquiries on July 22, and sent a second round of inquiries on December 21, after which there were no updates on the review status.

On July 28, 2023, Future Health and the sponsoring institution submitted a withdrawal application to the Shenzhen Stock Exchange, and on August 2, 2023, the company's IPO review status was changed to terminated.

After withdrawing from GEM, Future Health turned to the National Equities Exchange and Quotations. In August 2024, Future Health was listed on the Innovation tier of the National Equities Exchange and Quotations and completed the disclosure of the annual and semi-annual reports. However, from historical trading records, Future Health has not achieved any equity transactions since its listing.

According to the data disclosed in the public transfer documentation at the time of listing, from 2021 to 2022 and from January to September 2023, Future Health achieved revenues of 1.054 billion yuan, 0.904 billion yuan, and 0.75 billion yuan, with net income excluding non-recurring items of 0.15 billion yuan, 0.107 billion yuan, and 0.093 billion yuan.

Among its products, the neck massager is Future Health's flagship product. According to the B2C channel retail sales in 2021, the SKG brand neck massager had the highest sales nationwide. However, in recent years, the proportion of revenue from neck massagers has declined year by year, with 70.07%, 50.12%, and 47.21% for 2021-2022 and January to September 2023 respectively.

According to the latest disclosed data, Future Health's revenue for the first half of 2024 was 0.595 billion yuan, an increase of 8.81% year-on-year; the net income attributable to the shareholders of the listed company, excluding non-recurring items, was 0.105 billion yuan, a year-on-year increase of 24.93%.

According to Future Health's earnings reports, the increase in product sales year-on-year was mainly due to the rise in sales revenue from neck massagers.

In terms of domestic market share, SKG has a significant proportion, mainly through online channels. According to a report by the Head Leopard Research Institute, in 2022, SKG's market share was 11%, ranking second, while Beiqinglong ranked first with a market share of 14%.

Data from the Head Leopard Research Institute shows that from 2021 to 2023, the market size of the massage equipment industry decreased from 55.509 billion yuan to 45.203 billion yuan, with a compound annual growth rate of -9.76% during this period. With the recovery of economic demand, it is expected that from 2024 to 2028, the market size of the massage equipment industry will grow from 49.19 billion yuan to 72.689 billion yuan, with a compound annual growth rate of 10.26%.

Accelerating overseas expansion, SKG has raised over 100 million yuan and received bullish sentiments from Morgan Stanley?

Apart from domestic Business, Future Health is also expanding into overseas markets. In the first half of 2024, the company achieved overseas revenue of 28.5494 million yuan, a year-on-year decline of 14.18%, accounting for 4.87% of total revenue. In response to sluggish overseas revenue, Future Health stated that this was mainly due to a year-on-year decline in revenue from health wearable watches.

Although the proportion of overseas Business is low, SKG's strategy for expansion abroad is accelerating in the second half of 2024.

According to the public transfer announcement, in March 2024, Liu Jie, Future Health, Future Group, and Hangzhou Changjin Private Equity Investment Partnership (Limited Partnership) signed the "Share Purchase Agreement," stipulating that Future Group would transfer its 3.06% stake to Hangzhou Changjin for 55 million yuan, and Liu Jie would transfer his 2.5% stake to Hangzhou Changjin for 45 million yuan. The total investment in this transaction by Hangzhou Changjin was 0.1 billion yuan, with a transfer valuation of approximately 1.8 billion yuan.

Hangzhou Changjin Private Equity Investment Partnership (Limited Partnership) is the only external Institutional Shareholder introduced by the company, managed by a private fund under Morgan Stanley (China) Private Equity Management Co., Ltd.

After completing the aforementioned financing, SKG stated that with the support of Morgan Stanley, the brand would accelerate its Global Strategy. As of August 2024, SKG's products have been exported to over 50 countries and regions, with total global sales exceeding 27 million.

During an interview with the Star Daily, senior researcher Jiang Han from the Pangu Think Tank stated that with the continuous improvement of people's health awareness and the acceleration of lifestyle, the demand for smart wearable health products is continuously growing. Especially in the context of the deep integration of Technology and the Health Industry, Future Health's products meet modern health needs and lifestyles, presenting significant market potential.

However, Jiang Han also pointed out that SKG's success comes from marketing. High marketing expenses have driven its growth, but whether this can be sustained becomes the biggest issue. "Currently, market competition has become fierce; these internet celebrity brands are facing intense market competition and an increasingly competitive pricing war."

It is worth noting that Future Health was frequently discussed in the market during the initial submission of its prospectus due to issues such as lack of growth, large dividends for management, excessive compensation for some executives, and low "gold content" in R&D technology.

Recent Earnings Reports indicate that Future Health's revenue and Net income have resumed growth, and there have been no significant dividends in recent years. However, the issue of high executive compensation still exists. In the first three quarters of 2023, the total compensation for key management personnel at Future Health was 14.5108 million yuan, accounting for 14.67% of the company's Net income. According to disclosures, the company's core executives include the founding couple and 9 others.

Shareholder information shows that Liu Jie and Xu Siying together hold 88.94% of the equity, making them the actual controllers of Future Health.