Summary of Key Issues
Keep is currently facing multiple challenges: a continuous loss of users (a 38% decrease in two and a half years), a deteriorating revenue structure (a decline in high-profit membership services and an increase in the proportion of low-profit proprietary products), and a lack of tangible support for its AI initiatives (a continuous reduction in R&D expenses), which has led to a more than 90% reduction in its market value. In contrast, a similar platform, Mint Health, was able to secure strategic investment from Ant Group by leveraging its accumulated data on Chinese cuisine nutrition, demonstrating a possible path for Keep to be acquired by a larger company. However, Keep must first address issues such as user loss and competitive pressures before it can seize this opportunity.
Keep's Current Situation
Keep's current situation can be described as bleak:
1. Severe User Loss: The average monthly active users (MAU) dropped from 29.92 million in 2024 to 18.58 million in the first half of 2026, a decrease of over 11 million users (38%). Users are the lifeblood of a platform, and with fewer users, revenue from advertising and membership services is naturally affected.
2. Reversal in Revenue Structure: Revenue from high-profit online membership and paid content services decreased by 26.9% year-on-year, while the revenue from low-profit proprietary sports products (such as fitness equipment and clothing) increased to 58.5%. In other words, while the revenue from selling products has increased, the profit margin has decreased, resulting in only a 0.4% increase in total revenue and a 21.4% decrease in net profit.
3. Near-Zero Market Value: The company's market value peaked at HK$22.2 billion at the time of its listing but has now dropped to HK$887 million, a reduction of over 90%. The stock price of HK$1.76 is on the verge of becoming a "penny stock" (below HK$1). Existing shareholders (such as SoftBank and Tencent) invested heavily at the beginning but are now unable to sell their shares and see no new prospects.
The Challenge of AI Initiatives
At the beginning of 2025, Keep announced a focus on AI, launching over 8,000 AI-customized courses. However, the problems are:
- Reduced R&D Investment: R&D expenses decreased by 29.4% in 2025 and another 23.2% in the first half of 2026. Keep explains this as a cost-cutting measure to replace traditional content production with AI, but the market is skeptical because AI models require substantial investment, and such cuts only make it seem like the company is making empty promises.
- Fading Momentum in the Health Tech Sector: The entire online health technology sector has seen a slowdown, with platforms like Gudong and Yuepaoquan not raising funds for years. Only Keep is struggling to survive in the secondary market. Users have lost interest in fitness apps, and free content on platforms like TikTok (with influencers like Pamela and Liu Guohong) has diverted their willingness to pay for fitness services, making it difficult for Keep to attract investment in AI initiatives.
Mint Health's Success Story
Mint Health's experience offers a lesson for Keep:
- The Limitations of Utility Apps: Mint Health, a calorie-tracking app with 200 million registered users but only 30 million annual active users, faced difficulties in monetization (losses in weight loss programs and e-commerce). It only became profitable with meal replacement services, but the meal replacement market has since become highly competitive, putting Mint Health back in a difficult position.
- The Value of Data Assets: Ant Group's investment in Mint Health (holding more than 28% of the shares) was driven by Mint Health's 20-year database of Chinese cuisine nutrition data. AI models require real data as fuel, and Mint Health's database complements Ant Group's health ecosystem. By leveraging this data, Mint Health was able to secure a strategic investment and resolve its financial and ecosystem challenges.
Can Keep Follow Mint Health's Path?
Keep does have valuable assets, such as data on the exercise habits of 400 million registered users, which could be crucial for a health technology company looking to create a complete ecosystem. However, it faces several obstacles:
1. Profound User Loss: The MAU has dropped from a peak of 36.39 million to 21.77 million, indicating a significant user decline. Acquiring such a company would require the acquiring firm to invest in retaining users, which may not be cost-effective.
2. Fierce Competition: Free fitness content on platforms like TikTok and REDnote has attracted many users, reducing the appeal of Keep's paid membership services.
3. Data Integration Challenges: Exercise data is more complex to integrate with broader ecosystems (such as e-commerce and lifestyle services) compared to diet data, requiring advanced technology and operational capabilities.
Conclusion
To be acquired by a larger company, Keep needs to first regain user engagement. It can either develop truly differentiated AI-based content (e.g., more precise personalized training programs) or improve user loyalty. Otherwise, even valuable data will be of little use if users do not return.
The Best Outcome: Being Acquired by a Larger Company?
For Keep, being acquired by a larger company could be the best outcome for several reasons:
1. Financial Relief: With historical losses of HK$2.7 billion, Keep is barely profitable and would benefit from sustained financial support.
2. Breaking Out of the Utility App Limitations: A larger company's ecosystem (e.g., e-commerce or local services) could help Convert Keep's exercise data into actual revenue, such as by promoting related products.
3. Exit Strategy for Existing Shareholders: With no new funding in the primary market and limited liquidity in the secondary market, a merger with a larger company provides the only exit option for existing shareholders.
However, this would only be possible if Keep can demonstrate its value—users need to be willing to return, and the data must be effectively integrated into the larger company's ecosystem. Otherwise, even a merger may not be considered worthwhile by the acquiring firm.