HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Fujian Lemo IoT Technology / Equity Capital Markets

<ul>
<li>Lemo can replicate on a large scale through offline outlets to reduce operating costs.But this model is characterized by heavy assets, with a single profit model of limited risk resistance.</li>
<li>Insufficient rigid demand is a major challenge for the industry.The declining revenue growth reflects the ineffective business expansion of Lemo, and the Company may have already encountered a growth ceiling. </li>
<li>Valuation of Lemo would be lower than peers due to the concerns of business expansion and slowing revenue. For example, 12-15x P/E may provide more safety margin for investors.</li>
</ul>


Lemo can replicate on a large scale through offline outlets to reduce operating costs.But this model is characterized by heavy assets, with a single profit model of limited risk resistance.
Insufficient rigid demand is a major challenge for the industry.The declining revenue growth reflects the ineffective business expansion of Lemo, and the Company may have already encountered a growth ceiling. 
Valuation of Lemo would be lower than peers due to the concerns of business expansion and slowing revenue. For example, 12-15x P/E may provide more safety margin for investors.


Pre-IPO Lemo Services Co., Ltd (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>Lemo increased the number of massage equipment in the cinemas significantly, but the transaction value has reflected its ineffective business expansion. The Company may have already encountered a growth ceiling.</li>
<li>Lemo’s business model requires high occupancy fee and maintenance costs, which is hard to decrease. However, if revenue growth slows down, Lemo’s profits would be “eroded” due to high costs.</li>
<li>In Sep. 2024, valuation of Lemo reached RMB750 million. We think valuation of Lemo could be lower than that of peers in the future due to concerns on the outlook. </li>
</ul>


Lemo increased the number of massage equipment in the cinemas significantly, but the transaction value has reflected its ineffective business expansion. The Company may have already encountered a growth ceiling.
Lemo’s business model requires high occupancy fee and maintenance costs, which is hard to decrease. However, if revenue growth slows down, Lemo’s profits would be “eroded” due to high costs.
In Sep. 2024, valuation of Lemo reached RMB750 million. We think valuation of Lemo could be lower than that of peers in the future due to concerns on the outlook. 


Pre-IPO Fujian Lemo IoT Technology - The Outlook for Growth and Profit Margins Is Not Optimistic

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Fujian Lemo IoT Technology (FLI HK)

Pre-IPO Lemo Services Co., Ltd (PHIP Updates) - Some Points Worth the Attention

Insufficient rigid demand is a major challenge for the industry. Lemo's offline expansion faces challenges with heavy assets/limited profit models,...

Xinyao (Criss) Wang

Pre-IPO Fujian Lemo IoT Technology - The Outlook for Growth and Profit Margins Is Not Optimistic

Lemo's expansion of massage equipment in cinemas fails to bring expected transaction value, leading to concerns about Lemo's future outlook for...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO Lemo Services Co., Ltd (PHIP Updates) - Some Points Worth the Attention

Insufficient rigid demand is a major challenge for the industry. Lemo's offline expansion faces challenges with heavy assets/limited profit models,...

Xinyao (Criss) Wang

Pre-IPO Fujian Lemo IoT Technology - The Outlook for Growth and Profit Margins Is Not Optimistic

​Lemo's expansion of massage equipment in cinemas fails to bring expected transaction value, leading to concerns about ​Lemo's future outlook for...

Xinyao (Criss) Wang

Lemo's expansion of massage equipment in cinemas fails to bring expected transaction value, leading to concerns about Lemo's future outlook for...