AI commercialization realization + B-end industry empowerment Keep (03650) growth logic fully switched.

Against the backdrop of a mild recovery in the macro consumption environment and the ongoing deepening competition in the sports and health sector, Keep (03650) officially disclosed its performance report for the first half of 2026 on August 24. During the reporting period, the company achieved operating revenue of 825 million yuan, a year-on-year increase of 0.4%; with a Non-IFRS adjusted net profit of 5.88 million yuan. Notably, the performance of its own-brand fitness products was particularly impressive, with revenue reaching 483 million yuan, a substantial year-on-year growth of 21.7%, and a significant increase of 5.3 percentage points in gross profit margin compared to the same period last year, demonstrating the strong profitability resilience and growth momentum of its core business. Behind the financial report data lies, on one hand, a revenue growth decline and net profit contraction resulting from Keep's continued investment in AI, and on the other hand, it reflects a shift in Keep's growth paradigm: while MAU decreased from 22.5 million to 18.6 million, the average monthly revenue per MAU surged by 21.3% year-on-year to 7.4 yuan. This structural breakthrough not only signifies that Keep has moved beyond the traditional phase of scale expansion but also confirms that its strategic path towards "value-driven" transformation has entered a virtuous development track. At this key juncture in mid-2026, Keep's strategic intentions are clearer: to reconstruct the underlying logic of sports services with AI technology, solidify its commercialization foundation with high-margin consumer products, and leverage large-scale vertical models to export industrial capabilities. Proactive Evolution: Strategic Focus Shifts to High-Value Demographics In the first half of 2026, Keep's MAU decreased from 22.5 million to 18.6 million, accompanied by a phase of revenue pressure. This is not a business stall, but an inevitable result of the company shifting from "scale expansion" to "high-quality profitability." By decisively reducing ineffective marketing expenditure, Keep is accelerating its transition from a "content-centric platform" to an "AI-driven sports and health ecosystem." The "subtraction" of user scale is yielding a "multiplication" of user value. In the process of actively optimizing customer acquisition costs, the platform has successfully retained a core user group with high stickiness and willingness to pay, resulting in a significant increase in the proportion of high-value users. During the reporting period, the average monthly revenue per MAU surged by 21.3% year-on-year to 7.4 yuan, and the monthly average exercise duration per MAU increased by 15.3% year-on-year. This set of data profoundly confirms that the ultimate barrier in the sports and health sector lies in the depth of the user lifecycle, rather than merely in the breadth of traffic. Positive feedback from product performance further validates the correctness of the strategy. Centered around the "development of the leading sports model Keepace.ai and its integration into the app" and "driving the consumer products business back to high growth," the App 9.0 has been comprehensively upgraded to an "AI-native" platform, significantly enhancing completion rates and retention. The release of App 9.1 in August further enriches membership tiers and begins to bring in incremental AI membership revenue. With the comprehensive rollout of the AI product matrix in the second half of the year, the platform is expected to stabilize and recover MAU while maintaining high-quality profitability. Keep is reconstructing user relationships with AI, firmly rooting true growth quality in the deep exploration of each unit of user value. If the optimization of user structure and the shift in growth paradigm are Keep's proactive evolution's "internal cultivation," then this strategic resolve of "value-driven" must ultimately be fulfilled by the hard data of its core business. In the first half of 2026's financial report, the dual increase in the volume and profit of the consumer products business, along with the gradual approach of AI commercialization, are the two strongest responses Keep has presented to the market. Strong Momentum: Dual Increase in Consumer Products and the Approaching AI Validation Period The dual increase in volume and profit for the consumer products business, along with the gradual progression of AI commercialization, constitutes Keep's most critical growth engine currently. During the reporting period, revenue from proprietary brand fitness products reached 483 million yuan, a year-on-year increase of 21.7%, and gross profit margin improved by 5.3 percentage points year-on-year. Against the backdrop of under pressure consumer spending, this "dual increase" powerfully verifies the correctness of the company's category focus and channel optimization strategy. If consumer products are Keep's "ballast," then AI is the "new engine" unlocking valuation space. On the path to commercialization, Keep's AI strategy is steadily implemented following a rigorous logic of "cost reduction efficiency enhancement revenue increase," with its core DRIVE based on the systematic reconstruction of three major strategies. The first is the restructuring of the underlying architecture, upgrading from "tool invocation" to "AI-native system." This generational leap in infrastructure breaks the traditional hard-coded model, endowing the system with closed-loop capabilities for perception and execution, providing fundamental support for the deep productization of AI functions. The second is the accelerated productization, evolving from "functional aggregation" to "continuously evolving AI Agent." Leveraging the vertical model of sports health, Keep integrates dispersed functions into a proactive AI coach and bridges the gap from a responsive tool to full-scene companionship through the introduction of high-value value-added services such as "super AI members." The third is to validate user long-term value, deepening from "random access" to "long-term participation loop." In alignment with industry norms, the implementation of AI commercialization typically requires a transmission cycle of 2-3 quarters. Keep commenced productization in April 2026, and the positive changes to financial metrics in the second half of the year fully align with the expected rhythm. As the AI Agent continues to evolve and paid services deepen, ARPU values and subscription conversion rates are expected to accelerate their release in the second half of the year and beyond. The synergistic resonance of consumer products and AI is propelling Keep to accelerate its march into a new cycle of high-quality development driven by value. Exploring B-End Commercialization: Vertical Large Models Breaking Boundaries and Empowering After Keep's AI capabilities have achieved scalable validation on the C-end, the spillover of these capabilities to the B-end is no longer a distant narrative, but a clear path grounded in reality. On August 19, Keepace.ai officially completed national large model filing. This compliance milestone marks that Keep's AI services have formally qualified to output to the industrial side, transitioning from consumer-facing applications. From an industrial logic perspective, Keep's value extension to the B-end is a natural spillover of "sports professional layer" capabilities. General large models are incapable of addressing the vertical domain of sports and health, which emphasizes safety boundaries and scientific standards. The output of Keep's "sports professional layer," ranging from data interpretation and program adjustment to motion correction and risk prediction, precisely embodies the most scarce capabilities in the B-end industry. This capability layer is Keep's true core barrier and the value origin for its output to the B-end. The direction for external output to the B-end has clearly emerged. In the fields of sports equipment and wearable devices, hardware manufacturers have solved data collection yet still lack the "sports service layer" that can understand data, make judgments, and continuously guide users. Existing wearable manufacturers have actively inquired about integration, highlighting urgent and genuine demand. In the enterprise health management sector, Keep has previously formed alliances with well-known companies to help employees and users perform scientifically effective exercise at home. These experiences indicate that customized exercise plans and data tracking capabilities can effectively enhance employee health participation levels. In the scenario where insurance and health management intersect, Keep's collaboration with Ping An Health has validated the feasibility of embedding "intelligent exercise + health services" into the health management chain. From a broader perspective, Keep's B-end narrative serves as a typical case of "vertical ability industrialization" in the era of AI. In the context of increasingly saturated competition among general large models, it is precisely the capabilities deeply rooted in vertical industries that carry real commercial value. C-end subscriptions and sales of consumer products determine Keep's foundational base, while the gradual realization of B-end commercialization has the potential to reshape the market valuation frameworkfrom an "exercise content platform" to "sports health AI infrastructure." In the first half of 2026, Keep has completed "compliance foundational work" and "scene exploration"; in the second half and longer term, the substantial realization of B-end commercialization will present the market with a Keep characterized by more industrial depth and valuation flexibility. In summary, in the first half of 2026, the dual increase in the volume and profit of Keep's consumer products solidified its performance foundation, while the logic of the AI strategy driving "cost reduction, efficiency enhancement, and revenue increase" is steadily progressing, accumulating for stable long-term growth in the future. With C-end AI commercialization entering the harvest phase, along with the output of B-end "sports professional layer" capabilities, Keep is accelerating its evolution from a single sports content platform to the AI infrastructure in the sports health sector.