Amid a steady yet modest consumer spending recovery and intensifying competition in the fitness and wellness sector, KEEP (03650) released its first-half 2026 earnings report on August 24. During the period, the company generated total revenue of RMB 825 million, a year-on-year increase of 0.4%, with an adjusted net profit of RMB 5.88 million under Non-IFRS measures. Notably, its proprietary fitness products delivered standout performance, with revenue reaching RMB 483 million, surging 21.7% year-on-year, while gross margins improved significantly by 5.3 percentage points, showcasing the robust profitability and growth momentum of its core operations.

The financial results reveal two key dynamics: on one hand, KEEP's substantial investments in AI across all fronts have led to a temporary slowdown in revenue growth and a contraction in net profit; on the other hand, they reflect a fundamental shift in KEEP's growth model. While monthly active users (MAU) declined from 22.5 million to 18.6 million, average monthly revenue per MAU jumped 21.3% year-on-year to RMB 7.4. This structural breakthrough not only signals that KEEP has moved beyond the traditional phase of scale expansion but also validates that its strategic pivot toward a value-driven approach is now on a healthy trajectory.

Looking at the midpoint of 2026, KEEP's strategic direction is increasingly clear: leveraging AI technology to rebuild the foundational logic of fitness services, solidifying its commercial base with high-margin consumer goods, and exporting industry capabilities through its vertical large language model.

Proactive Evolution: Strategic Focus Shifts Toward High-Value Users

In the first half of 2026, KEEP's MAU declined from 22.5 million to 18.6 million, accompanied by temporary revenue pressure. This is not a sign of business slowdown, but rather the inevitable result of a deliberate shift from scale expansion to high-quality profitability. By decisively reducing inefficient marketing spend, KEEP is accelerating its transition from a content-centric platform to an AI-driven fitness and wellness ecosystem.

The reduction in user numbers has been offset by a multiplication in user value. Through proactive optimization of customer acquisition costs, the platform has successfully retained a core user base characterized by high engagement and strong willingness to pay, with the proportion of high-value users rising significantly. During the reporting period, average monthly revenue per MAU surged 21.3% year-on-year to RMB 7.4, while average monthly exercise duration per MAU grew 15.3%. These metrics underscore that the ultimate moat in the fitness and wellness sector lies in the depth of user lifecycle value, rather than sheer traffic volume.

Positive feedback from the product side further validates the strategic direction. Centered on two main pillars—developing the leading fitness large language model Keepace.ai and integrating it into the app, and driving the consumer goods business back to high growth—the App 9.0 has been fully upgraded to an agent-native platform, significantly improving workout completion rates and user retention. The App 9.1 released in August further enriched membership tiers and began generating incremental AI membership revenue. As the AI product matrix expands in the second half of the year, the platform is expected to maintain high-quality profitability while stabilizing and recovering MAU.

KEEP is using AI to redefine its relationship with users, embedding true growth quality deep into the monetization of each user's value. If optimizing user structure and shifting the growth paradigm represent KEEP's internal cultivation of proactive evolution, then this value-driven strategic determination must ultimately be validated through hard metrics in its core businesses. In the first-half 2026 earnings, the simultaneous growth in volume and profit of its consumer goods segment, alongside the approaching commercialization of AI, stand as the two most compelling proof points KEEP has delivered to the market.

Strong Momentum: Consumer Goods Achieve Volume-Profit Growth as AI Validation Nears

The simultaneous volume-profit growth in consumer goods and the advancing commercialization of AI form KEEP's most critical growth engines at present. During the reporting period, proprietary fitness product revenue reached RMB 483 million, up 21.7% year-on-year, with gross margins improving by 5.3 percentage points. Against a backdrop of consumer spending headwinds, this dual growth in volume and profitability strongly validates the effectiveness of the company's category focus and channel optimization strategies.

If consumer goods serve as KEEP's ballast, AI is the new engine unlocking valuation upside. On the path to commercial monetization, KEEP's AI strategy is being implemented in a disciplined sequence of cost reduction, efficiency enhancement, and revenue generation, driven by systematic restructuring across three key areas.

The first is foundational architecture overhaul, upgrading from tool invocation to an agent-native system. This generational leap in infrastructure moves beyond traditional hard-coded models, enabling a closed loop of perception and execution, and providing the underlying support for deep productization of AI capabilities.

The second is accelerated productization, evolving from a collection of features to a continuously evolving AI Agent. Leveraging its vertical fitness and wellness model Keepace.ai, KEEP is integrating disparate functions into a proactive AI coach, and through premium value-added services like the Super AI Membership, it has advanced from a reactive tool to an all-scenario companion.

The third is validating long-term user value, deepening the transition from random visits to long-term engagement cycles. Benchmarking industry norms, AI commercialization typically requires a transmission period of two to three quarters. KEEP initiated productization in April 2026, and the positive changes in financial metrics in the second half of the year are fully consistent with this expected timeline. As the AI Agent continues to evolve and paid services deepen, ARPU and subscription conversion rates are poised to accelerate in the second half and beyond.

The synergy between consumer goods and AI is propelling KEEP into a new cycle of value-driven, high-quality development.

B2B Commercial Exploration: Vertical Large Model Expands Industry Empowerment

Once KEEP's AI capabilities have been validated at scale on the consumer side, the spillover of these capabilities to the B2B sector is no longer a distant narrative but a clear, actionable path with a realistic foundation. On August 19, Keepace.ai officially completed national large language model filing, a compliance milestone that formally qualifies KEEP's AI services for deployment beyond consumer applications into industrial applications.

From an industry logic perspective, KEEP's B2B value extension is a natural outflow of its sports-specialized expertise layer. General-purpose large language models are ill-suited for the fitness and wellness sector, which demands strict safety boundaries and scientific standards. What KEEP offers to the B2B market—the sports-specialized layer encompassing data interpretation, program adjustment, movement correction, and risk prediction—is precisely the capability most scarce in the industry. This capability layer constitutes KEEP's true core moat and serves as the foundational value proposition for its B2B expansion.

The direction of B2B output is already coming into focus. In the fitness equipment and wearable device space, hardware manufacturers have solved data collection but lack the service layer capable of interpreting data, making judgments, and providing ongoing user guidance. Several wearable device makers have already proactively reached out to inquire about integration, indicating genuine and urgent demand. In the corporate wellness management segment, KEEP has previously formed alliances with well-known enterprises to help employees and users engage in scientifically effective exercise at home. These experiences demonstrate that customized exercise programs and data tracking capabilities can effectively boost employee health participation. In the insurance and health management convergence scenario, KEEP's collaboration with Ping An Health has already validated the feasibility of embedding smart exercise and health services into the health management value chain.

On a broader scale, KEEP's B2B narrative is a representative case of vertical capability industrialization in the AI era. As competition among general-purpose large language models becomes increasingly saturated, the true commercial value lies in capability layers that are deeply entrenched in specific vertical industries. C-end subscriptions and consumer goods sales determine KEEP's baseline, while the gradual realization of B2B commercialization has the potential to reshape the market's valuation framework—elevating the company from a fitness content platform to a fitness and wellness AI infrastructure provider.

In the first half of 2026, KEEP completed its compliance groundwork and explored key scenarios; in the second half and over the longer term, the substantive realization of B2B commercialization will allow the market to see a KEEP with greater industrial depth and valuation flexibility.

In summary, during the first half of 2026, KEEP's consumer goods segment achieved simultaneous growth in volume and profit, solidifying its performance foundation, while its AI strategy of cost reduction, efficiency enhancement, and revenue generation is progressing steadily, building a strong foundation for long-term growth. As C-end AI commercialization enters its harvest phase and the sports-specialized capability layer is exported to the B2B market, KEEP is accelerating its transformation from a single fitness content platform into the AI infrastructure of the fitness and wellness industry.