Relying on marketing to get out of the circle, selling well and restarting IPO

In 2024, SKG, which hired top celebrities as its spokesperson in China, expanded its overseas business. In 2025, its parent company moved to the Beijing Stock Exchange to restart its IPO.

SKG's success has always seemed to rely on heavy marketing, with fluctuating revenue and insufficient R&D. The IPO process has been full of twists and turns, and there are still uncertainties in this listing.

SKG's parent company moves to Beijing Stock Exchange

At present, SKG's parent company, Future Wearable Health Technology Co., Ltd. (hereinafter referred to as "Future Health") has completed the listing guidance filing, and the company has officially entered the guidance stage and plans to IPO on the Beijing Stock Exchange. The guidance institution is CICC Securities.

Before this round of IPO, Future Health had launched four attacks on the GEM, but ultimately failed.

In June 2022, Future Wear submitted its application to the Shenzhen Stock Exchange for the first time. After two rounds of inquiries, there was no update on the review status. After that, it updated its materials three times in December 2022 , March 2023 , and June 2023. Finally, after the inquiry, it failed to enter the GEM. In July 2023, Future Health submitted an application to withdraw its order to the Shenzhen Stock Exchange, and in August, the IPO review status changed to terminated.

After withdrawing its order from the ChiNext, Future Health turned to the New Third Board. In August 2024, Future Health was listed on the New Third Board, and no equity transaction has been completed since its listing.

Future Health was founded in 2007, and its main business in the early days was white goods. In 2016, it launched its first cervical massager, which became a best-selling product, and began to gradually focus on the research and development, design, production and sales of wearable health products. Comparable companies in the same industry include Beurer, Ecovacs, and Roborock.

Today, Future Health has established companies in many countries around the world, including Singapore, the United States, the Netherlands, etc., and its products are sold in more than 50 countries and regions around the world, realizing a global strategic layout.

In 2019, Future Health moved its headquarters to Nanshan, Shenzhen. In that year, its cervical massagers shipped a total of 10 million units, ranking first in sales in the industry. So far, SKG's products have been sold in more than 50 countries and regions, with cumulative global sales exceeding 27 million.

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 the company's total revenue. In the second half of 2024, SKG accelerated its overseas layout and obtained an exclusive investment of 100 million yuan from Morgan Stanley's private equity department in July , further accelerating the speed of its global strategic layout.

SKG has increased its investment in cross-border e-commerce platforms such as Amazon, TikTok, eBay, Lazada and Shopee. Since entering TikTok, it has established partnerships with more than 100 social influencers and has further joined hands with Musk's mother, Maye Musk, to serve as SKG's global health ambassador.

Thanks to Musk's extremely high global popularity and hot topics, SKG gained a lot of publicity on overseas social media and quickly increased its brand awareness overseas.

On Amazon and Walmart, SKG is one of the best-selling brands of massager products. SKG's K6 series of smart cervical massagers once took the top spot in the health care category sales list during Amazon's PD, with sales exceeding the 10 million US dollar mark.

Insufficient R&D and marketing out of the circle

SKG has adopted the same domestic strategy as it did in its overseas expansion , relying on large-scale marketing to gain brand exposure.

SKG's domestic marketing is obvious to all. In 2020, it paid a lot of money to sign the then top star Wang Yibo as its spokesperson. During the "Double Eleven" period of that year, Wang Yibo's customized SKG K5 sold 20,000 units in just one minute. Later, Yang Yang, Guli Nazha, Zhang Linghe and others have also served as SKG's spokespersons.

Not only that, the brand has also won sponsorship of popular variety shows such as "This! Is Street Dance 3" , "Sisters Riding the Wind and Waves" , and "China's New Rap 2020" to advertise its products. With a series of heavy marketing efforts, in 2020, Future Health's cervical massagers achieved sales of 4.7108 million units .

While product sales are increasing, SKG is also labeled as "focusing on marketing and neglecting R&D."

In the first half of 2024, Future Health's revenue was 595 million yuan, a year-on-year increase of 8.81%; the net profit attributable to shareholders of the listed company after deducting non-recurring items was 105 million yuan, a year-on-year increase of 24.93%.

In the first half of the year, the company's sales expenses were 118 million yuan, accounting for 19.80% of operating income, a year-on-year increase of 35.88%; R&D expenses were only 42 million yuan, accounting for 7.07% of revenue, a year-on-year decrease of 9.99%.

Prior to this, Future Health's R&D expenses had been below 100 million yuan for a long time, accounting for less than 10% of its revenue.

In order to get rid of the label of insufficient R&D, Future Technology's R&D expenses increased from 47 million yuan in 2020 to 98 million yuan in 2022, with an overall increase of 108%.

However, compared with sales expenses, it is still a drop in the bucket. From 2020 to 2022, the company's sales expenses totaled nearly 590 million yuan, while R&D expenses were less than 220 million yuan, less than 40% of sales expenses.

Among the 1,571 patents owned by Future Wear , 1,148 are utility model patents, accounting for more than 70%. Of the 69 invention patents owned by the company, the vast majority were applied for and approved before July 2020, which means that the increased investment in research and development since 2020 has not achieved any actual results.

Large dividends lead to inquiries

The lack of research and development also casts a question mark on the company's future sustainable profitability.

SKG's wearable health products contribute the majority of its revenue, including massagers for the cervical spine, shoulders and neck, eyes, waist, head, legs and knees, among which the cervical spine massager is the most important key brand.

In 2020, the company sold 855 million yuan of its main products, but by 2022, it only sold 454 million yuan, almost halved. In this regard, the Shenzhen Stock Exchange also asked whether it is possible to continue to make profits.

In 2022, the revenue share of the key product cervical massager dropped by more than 30%, and the gross profit margin also declined year by year.

While its profitability was questioned, Future Health had distributed huge dividends. The dividends in 2021 and 2022 even exceeded the net profit of that year.

From 2020 to 2022, Future Health's revenue will be RMB 991 million, RMB 1.06 billion and RMB 905 million respectively, and its net profit attributable to the parent company will be RMB 143 million, RMB 132 million and RMB 119 million respectively. Sales expenses will be RMB 210 million, RMB 215 million and RMB 165 million respectively.

In 2021 and 2022, the company's surprise dividends were 155 million yuan and 160 million yuan respectively, and the company's earnings were not enough to pay dividends to shareholders. In 2022 and 2023, Future Health paid dividends twice more, 50 million yuan and 30 million yuan respectively.

From 2021 to 2023, Future Health's dividends will total 395 million yuan.

In its response to the inquiry, Future Health stated that the company's dividends were based on a comprehensive consideration of capital increase and shareholder funding needs. The dividend plan was determined by the company based on actual operating needs, characteristics of the development stage and financial conditions. There is no situation that harms the company's interests or has a significant adverse impact on the company's daily production and operations and subsequent business expansion.

Insufficient R&D, questionable profitability, and large dividends to shareholders ... This company, which relies on marketing to become popular, cannot avoid these key factors if it wants to go public. Whether Future Health can successfully pass the test remains to be verified.

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