SKG's IPO Sprint: With the Top Market Share, Why Is Its Growth Becoming More and More Costly?

The internet-famous brand SKG is once again approaching the IPO gate.

In August 2026, after its first listing application lapsed, Future Wearable Health Technology Co., Ltd. (hereinafter referred to as "SKG Future Health") submitted a new prospectus to the Hong Kong Stock Exchange, planning to list on the Main Board. Previously, the company had filed for a GEM IPO and once planned to list on the Beijing Stock Exchange, but both attempts ended in failure.

Judging from financial data, SKG Future Health has the confidence to open the door to the capital market. Calculated by GMV, in 2025, SKG Future Health ranked first in China's smart soothing wearable device industry with a market share of 21.6%. From 2023 to 2025, the revenue of SKG Future Health increased from 1.046 billion yuan to 1.218 billion yuan, with a compound annual growth rate of 7.91%.

However, it should be noted that the capital market not only pays attention to the market influence of enterprises, but also cares more about whether the company has strong profitability. In sharp contrast to the steady growth of revenue, the profit of SKG Future Health has not increased at the same rate as its revenue, as the newly added revenue mainly comes from businesses with relatively low gross profit margins and sales and marketing expenses have kept rising all the way.

In this context, even if it successfully lands in the capital market, SKG Future Health can hardly win the favor of investors and obtain a high valuation.

After ranking first in market share, SKG replaces its growth engine

Although it has taken the leading position in China's smart soothing wearable device industry, SKG Future Health's core products have not further expanded market influence with the advantage of scale, but have encountered the problem of stagnant growth.

Source: SKG Future Health prospectus

The prospectus shows that from 2023 to 2025, the revenue of SKG Future Health's smart soothing wearable devices was 888 million yuan, 856 million yuan and 856 million yuan respectively, which not only did not rise steadily, but even showed signs of decline.

In this context, the reason why SKG Future Health's revenue has climbed steadily is mainly that it has found a new growth curve. From 2023 to 2025, the revenue of SKG Future Health's fitness recovery and shaping equipment increased from 97.21 million yuan to 292 million yuan, and its proportion in the sales revenue of products rose from 9.4% to 24.2%.

Source: SKG Future Health prospectus

However, the profit margin of fitness recovery and shaping equipment is far lower than that of smart soothing wearable devices. Taking 2025 as an example, the gross profit margin of SKG Future Health's smart soothing wearable devices was 53.2%, while that of fitness recovery and shaping equipment was only 42.1%, 11.1 percentage points lower than the former.

SKG Future Health explained that "the gross profit margin of fitness recovery and shaping equipment is relatively low, mainly due to fierce competition and our relatively late entry into this field, which requires us to adopt a more aggressive pricing strategy."

Although fitness recovery and shaping equipment took over the baton from smart soothing wearable devices in time and became the company's new growth engine, the limited profit of this business led to the problem of "revenue growth without profit growth" for SKG Future Health as its influence expanded. From 2023 to 2025, the net profit of SKG Future Health was 127 million yuan, 135 million yuan and 132 million yuan respectively, remaining stagnant for three consecutive years.

In the first 5 months of 2026, although the net profit of SKG Future Health increased by 30.1% year on year, it was lower than the revenue growth rate, resulting in a net profit margin of only 9.5%, down 1.7 percentage points year on year.

Against the backdrop of stagnant growth in main business, enterprises should indeed actively explore new businesses. However, the brand new growth curve built by SKG Future Health has not replicated the profitability of its core smart soothing wearable devices. With the further rise of the performance of fitness recovery and shaping equipment, there is a possibility that the profit of SKG Future Health will further decline.

Heavy on marketing, light on R&D, SKG falls into path dependence

Similar to many internet-famous brands, the rapid rise of SKG Future Health is also inseparable from its large-scale marketing strategy.

The prospectus shows that from 2023 to 2025, SKG Future Health's sales and marketing expenses were 216 million yuan, 226 million yuan and 288 million yuan respectively, with the expense ratio reaching 20.6%, 21.6% and 23.7% respectively. Among them, publicity and advertising expenses were 155 million yuan, 157 million yuan and 190 million yuan respectively.

Source: SKG Future Health

Supported by hundreds of millions of yuan in sales expenses every year, SKG Future Health has successively signed first-line stars such as Yang Yang, Guli Nazha and Wang Yibo, and sponsored popular variety shows such as "Street Dance of China", "Sisters Who Make Waves" and "The Rap of China".

In the early stage of the development of the smart soothing wearable device market, SKG Future Health seized the shoulder and neck anxiety of young people, turned traditional massagers into portable and fashionable consumer electronic products, and completed market education with the help of marketing strategies such as celebrities and variety shows, which is indeed an important means to quickly open up the market.

However, as the smart soothing wearable device market enters a brand new development stage, SKG Future Health is increasingly unable to persuade consumers to pay with its large-scale marketing strategy.

Source: SKG Future Health prospectus

Statistics from Frost & Sullivan show that from 2020 to 2025, the global smart soothing wearable device market size increased from 4.9 billion US dollars to 9.1 billion US dollars, with a compound annual growth rate of 13.1%. It is expected to further grow to 18.6 billion US dollars by 2030.

Although the smart soothing wearable device market is still booming, under the influence of factors such as differentiated demand and technological upgrading, the focus of competition no longer revolves around product form, portability and industrial design, but begins to develop towards higher-precision sensors, AI health algorithms, IoT collaboration and personalized health services.

Source: Counterpoint Research

For example, Counterpoint Research pointed out in its research report that the on-device AI penetration rate in wearable devices is expected to keep rising, increasing from 30% in 2025 to nearly 80% in 2032.

After the industry enters the stage of refined operation, only by increasing R&D investment and forging differentiated competitiveness can enterprises in this sector possibly survive through the cycle. However, SKG Future Health has fallen into the path dependence of "heavy on marketing, light on R&D".

In sharp contrast to the rising sales and marketing expenses, SKG Future Health's R&D expenses have been decreasing all the way. From 2023 to 2025, SKG Future Health's R&D expenditure was 95.51 million yuan, 79.18 million yuan and 73.28 million yuan respectively, with the expense ratio reaching 9.1%, 7.6% and 6% respectively.

In the first five months of 2026, although SKG Future Health's R&D expenditure increased by 33.1% year on year to 38.36 million yuan, the R&D expense ratio further dropped to 5.9% because it was lower than the revenue growth rate.

On the one hand, due to limited R&D investment, SKG Future Health lacks cutting-edge technologies that can attract consumers' attention; on the other hand, due to increasingly serious product homogenization, the conversion rate of large-scale marketing strategies continues to decline, so SKG Future Health naturally has to face the challenge of eroded profits.

Outsourced manufacturing and third-party distribution, how can SKG survive through the cycle?

The reason why SKG Future Health falls into the path dependence of "heavy on marketing, light on R&D" is directly related to its business strategy of outsourced manufacturing and relying on distributors to deliver products.

In terms of manufacturing, SKG Future Health mainly produces goods through outsourcing. From 2023 to 2025 and the first 5 months of 2026, the proportion of outsourced goods in the total sales volume of SKG Future Health was 27.8%, 43.6%, 53.8% and 66.1% respectively.

Source: SKG Future Health prospectus

In terms of sales, distribution is the main delivery channel for SKG Future Health. From 2023 to 2025 and the first 5 months of 2026, the proportion of distribution channels in SKG Future Health's product sales revenue was 90.8%, 88.1%, 80.9% and 78.4% respectively.

Generally speaking, the core assets of consumer electronics enterprises are mainly products, brands and user relationships. If products are outsourced to third-party enterprises and user relationships are separated by distributors, the brand will become extremely important. And the simplest and most direct way to maintain the brand is marketing.

From this perspective, the continuous growth of sales expenses is largely an inevitable result of the declining conversion efficiency of SKG Future Health's existing business model.

However, simply increasing sales expenses is not enough to push SKG Future Health to survive through the cycle. Because as competition intensifies, if products lack core competitiveness, enterprises will face the challenge of declining return on marketing investment.

Source: Breo 2025 annual report

Taking Breo as an example, its annual report shows that in 2025, its sales expenses were 413 million yuan, with an expense ratio of 53%, up 2.8 percentage points year on year. Due to the declining efficiency of marketing input and output and high sales expenses, Breo's revenue in the same period was 779 million yuan, down 28.2% year on year, and the net profit attributable to shareholders was 97.2622 million yuan, turning from profit to loss year on year.

Admittedly, the performance of SKG Future Health is better than that of Breo, but the latter's experience has sounded the alarm for the former. In the massage health hardware industry, if brand growth increasingly relies on continuous traffic investment, once the marginal efficiency of marketing declines, it may backfire on revenue and profits.

For SKG Future Health, the real question this IPO needs to answer is not whether the company can still expand its revenue, but how to achieve high-quality growth after the industry enters a brand new cycle.

In the early stage of the smart soothing wearable device market, enterprises only need to complete tasks such as industrial design, celebrity marketing and channel coverage to achieve category education and quickly build brands.

However, as the industry enters the mature period, the standards by which the capital market measures enterprise value will also change. Compared with winning temporary sales scale by relying on huge marketing investment, investors are more concerned about whether enterprises have mastered core technologies, user relationships and continuous service capabilities.

At present, SKG Future Health is still living in the "old era". Against the backdrop of stagnant growth in its core soothing wearable business, although diversified categories have become a new growth engine, their profitability has declined. In order to persuade consumers to pay, SKG Future Health has to increase investment in publicity and promotion. All these factors have led to the continuous narrowing of the company's profit margin.

If it wants to successfully open the door to the capital market and win the favor of investors, SKG Future Health needs to reshape its business model in response to changes in the consumption environment, and transform one-time hardware transactions into long-term user relationships supported by sensors, algorithms, health data and services.

If it fails to complete the transformation for a long time, the title of "No.1 in market share" is more like a footnote to the previous extensive growth model, rather than a guarantee of future valuation.

This article is from the WeChat official account "Farsight Insight", written by the Farsight Team, and published by 36Kr with authorization.