CITIC Securities: The intelligent transformation of the fitness equipment industry is accelerating, recommending leading brands that can benefit

According to the Zhitong Finance APP, Guotai Junan has released a research report stating that although the number of fitness venues has shrunk in the short term, the long-term growth in per capita income will support demand; at the same time, China's comparative manufacturing advantages will continue to drive export growth, and AI technology empowerment will further strengthen the competitive advantages of leading brands. It recommends top brands with strong branding, channels, and manufacturing foundations that are expected to benefit from the rising industry concentration under the wave of intelligence, including IMPULSE (002899.SZ), SHUHUA SPORTS (605299.SH), SPORTSOUL (001300.SZ), and KLY SPORTS (301287.SZ). These companies are expected to benefit from the increase in industry concentration amid the wave of intelligence. Guotai Junan's main points are as follows: Changes in downstream formats, demand for commercial fitness venues is shrinking, but long-term trends are positive Various fitness venues, studios, etc., are the main demand markets for equipment. Since 2023, although the pandemic has been effectively controlled, the number of various offline fitness venues in China has still shown a shrinking trend. According to the 2023 China Fitness Industry Data Report, the number of broadly defined fitness venues in China in 2023 is 117,000, a decrease of 13% compared to 2022. Among various fitness venues, the decline in fitness studios is the smallest at 7.36%, while the decline in general fitness venues is the largest at 22%. At the same time, the number of fitness members and the penetration rate of fitness populations, which are closely related to fitness venues, have continued to decline after reaching a peak in 2021. According to data from the China Bodybuilding Association, by 2023, the number of fitness members has fallen to less than 70 million, with a coverage rate of less than 5%. On the other hand, from a long-term perspective, considering the stable growth of per capita disposable income in China and the increasing pursuit of high-quality living standards by the public, downstream demand is expected to maintain long-term steady growth. China's manufacturing comparative advantages are prominent, and the export market scale for fitness training equipment is sufficient According to data from the General Administration of Customs, benefiting from the rapid recovery of production in China at the beginning of the pandemic, the export value of treadmills and other fitness training equipment grew rapidly in 2020 and 2021. In 2021, the export value of treadmills reached 11.12 billion yuan, while the export value of general sports activities, gymnastics, or competitive goods reached 20.79 billion yuan, and the total export value of other fitness and rehabilitation equipment was 45.85 billion yuan. In 2022, the corresponding export values of these projects declined, but a recovery growth trend is expected in 2023. Overall, the domestic fitness equipment industry chain has achieved comparative advantages in comprehensive production capacity and cost through industrial cluster effects, fully opening up the export market. AI-enabled products, leading brands' competitive advantages are expected to expand Leading companies such as SHUHUA SPORTS have made significant progress in the layout of AI products, with applications of AI technology mainly focused on smart fitness equipment, software applications, and full-scene smart fitness systems. In 2022, SHUHUA's outdoor smart aerobic fitness station was selected as one of China's ninth batch of innovative consumer products in the light industry; in May 2024, the company will showcase at the 41st China International Sporting Goods Expo, winning multiple awards, including the "Innovation Promotion Award" at the 2024 Sports Expo for its independently developed "i5 Smart Treadmill" and "Speed and Strength Feedback System 2.0." Risk Warning: Downstream consumer demand is lower than expected, raw material prices continue to rise, and industry price competition is intensifying