Good News on Listing | Frost & Sullivan Assists Lemco Technology Co., Ltd. to Successfully List on the Hong Kong Stock Exchange (2539.HK)

LEMO Technology Co., Ltd. (hereinafter referred to as 'LEMO Technology') successfully went public on December 3, 2025. The company plans to issue 5.5556 million H shares, of which 90% will be international offerings and 10% public offerings. The maximum offering price per share is HK$40.00, and the net proceeds are expected to be approximately HK$222 million.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), assisting the issuer in communicating with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.

Frost & Sullivan has always been a leader in helping companies go public in Hong Kong. According to LiveReport big data (statistical data as of September 30, 2025), from January to September 2025, as well as during the past 12 and 36 months, Frost & Sullivan provided listing industry advisory services to 47 (market share 72%), 62 (market share 69%), and 162 (market share 70%) Hong Kong-listed IPOs respectively, ranking first in terms of number. It has a wealth of industry experience and communication skills with regulatory authorities, exchanges, investment and financing institutions, and various related agencies.

• The company is an absolute leader in the Chinese machine massage service market, ranking first both in terms of transaction volume and revenue in 2024;

• The company owns the largest machine massage service network in China, covering a wide range of scenarios, and its brand 'Lemo Bar' enjoys a high reputation.

• The company has achieved a balance between rapid business expansion and operational efficiency through the dual-line approach of 'direct operation model + franchise model';

• Relying on its self-developed LMB Links digital platform, the company has achieved large-scale and efficient operation and maintenance of tens of thousands of service outlets and hundreds of thousands of devices across the country.

• The company has a vast and continuously growing customer base, serving over 174 million consumers in total, with more than 40 million registered members, indicating high user stickiness;

• The company is led by a visionary and experienced management team, dedicated to driving continuous growth through technological innovation and strategic cooperation.

According to the Frost & Sullivan report, in terms of retail sales in 2024, the company:

• Ranked first in the Chinese machine massage service market (in terms of transaction volume), with a market share as high as 42.9%;

• Ranked first in the Chinese machine massage market (in terms of revenue), with a market share exceeding 50.0%;

• It also occupies about 0.2% of the overall massage market (in terms of transaction volume) in China.

The big health market is a comprehensive industry centered around health, covering multiple fields such as healthcare, medical services, pharmaceuticals, health products, elderly care services, health insurance, and more. With the improvement of people's living standards and enhanced health awareness, the big health market has gradually become a focal point of attention, demonstrating tremendous market potential. In the big health market, healthcare is an important component, especially with the increasing number of sub-healthy individuals among the younger population. The healthcare sector focuses on maintaining and improving personal health through prevention, monitoring, and treatment. It encompasses various products and services aimed at enhancing overall health, reducing fatigue, and promoting relaxation, including physical examinations, conditioning and rehabilitation, fitness, massage, etc. To meet people's pursuit of high-quality and sustainable wellness needs, the healthcare sector can provide convenient, affordable, and effective health products and services, with broad prospects for future development.

In terms of scale, China's large health market has entered a stage of rapid expansion. The market size increased from RMB 845 billion in 2020 to RMB 1228.63 billion in 2024, with an average annual compound growth rate of 9.8%. Driven by multiple factors such as policy support, increased capital investment, and technological innovation, China's large health industry structure has been continuously upgraded. Innovative drugs and intelligent medical services continue to emerge, and the industry is moving towards a new stage of more standardized, innovative development, and high-quality growth. It is expected that by 2029, the market size will further expand to RMB 2062.85 billion, with a CAGR of 10.9%, indicating that the industry's long-term growth momentum is very solid.

Data source: Frost & Sullivan analysis, IMF

Massage refers to a treatment method that applies pressure, friction, or vibration to the body to relieve pain, reduce stress, improve blood circulation, and promote overall health. The massage market can be broadly divided into two main categories: massage products and massage services. Massage products include tools and small pieces designed for personal use, such as home massage equipment, handheld massagers, and foot massagers. Massage services refer to professional massage provided by certified therapists or automated systems and can be further divided into traditional massage services and machine massage services. According to a Frost & Sullivan report, calculated by transaction volume, the market size of China's massage industry grew from RMB 315.4 billion in 2020 to RMB 536.2 billion in 2024, with a compound annual growth rate of 14.2%. The market size is estimated to continue growing at a compound annual rate of 5.4% from 2025 to the estimated period of 2029, and is expected to reach RMB 676.9 billion by 2029.

Traditional massage services mainly rely on manual operation, offering highly customized and diverse services and occupying a dominant market position. Machine massage services integrate technology to enhance the massage experience, providing more intelligent, stable, and customized services through smart devices, and have seen significant growth in recent years. There are a wide variety of massage products, but the level of customization is relatively low. According to a Frost & Sullivan report, calculated by transaction volume, the market size of traditional Chinese massage services grew from RMB 289.8 billion in 2020 to RMB 512.3 billion in 2024, with a compound annual growth rate of 15.4%. It is expected to further grow at a compound annual growth rate of 5.3% to reach RMB 660.7 billion by 2029. The market size of machine massage services grew from RMB 1.5 billion in 2020 to RMB 2.7 billion in 2024, with a compound annual growth rate of 12.0%. It is expected to grow significantly at a compound annual growth rate of 15.9% from 2025 to 2029, reaching RMB 5.6 billion by 2029.

According to consumption scenarios, machine massage services can widely cover various public places such as commercial complexes, cinemas, transportation hubs (such as airports and high-speed railway stations), office buildings, and highway service areas. Driven by consumers' increasing health awareness and pursuit of convenient and efficient services, the penetration rate of machine massage services in scenarios such as commercial complexes and transportation hubs continues to rise. According to a Frost & Sullivan report, machine massage services are becoming an important emerging force driving the growth of the overall massage market due to their advantages such as high cost-effectiveness, wide coverage of scenarios, and standardized services. Traditional massage services mainly cover professional venues such as massage parlors, with relatively concentrated coverage of scenarios. In the future, with technological progress and continuous expansion of application scenarios, the breadth and depth of machine massage service coverage are expected to be further deepened.

Data source: Analysis by Frost & Sullivan

Machine massage services refer to professional massage services provided by devices integrated with sensors and automation technology, achieving customized and automated experiences. This includes both device intelligence and service intelligence to improve massage efficiency and quality. According to a Frost & Sullivan report, the market size of China's machine massage service market increased from RMB 172.1 million in 2020 to RMB 270.7 million in 2024, with a compound annual growth rate of 12.0%. The market is expected to continue growing at a compound annual growth rate of 15.9% from 2025 to the estimated period of 2029, reaching RMB 56.06 billion by 2029. The rapid growth of the machine massage service market is mainly due to the increasing public health awareness, consumers' demand for stress relief and relaxation, as well as technological progress in device intelligence and scenario diversification, which has promoted the widespread penetration of services in commercial complexes, cinemas, transportation hubs, and other scenarios.

Data source: Analysis by Frost & Sullivan

According to brand positioning, the Chinese machine massage industry can be divided into high-end machine massage services and mass-market machine massage services. High-end machine massage services typically refer to services provided using independent massage equipment, deployed in scenarios such as airports and high-end commercial complexes, offering more personalized and comfortable experiences with higher equipment costs. Mass-market machine massage services mainly use massage mat equipment, focusing on scenarios like cinemas and train stations, providing convenient services at affordable prices. According to a Frost & Sullivan report, calculated by transaction volume, the market scale of high-end machine massage services (mainly independent massage equipment) increased from RMB 22 million in 2020 to RMB 4.39 billion in 2024, with a compound annual growth rate of 18.8%. The market scale of mass-market machine massage services (mainly massage mats) increased from RMB 7.23 billion in 2020 to RMB 15.27 billion in 2024, with a compound annual growth rate of 20.4%.

According to sales channels, the Chinese machine massage industry can be divided into online and offline channels. Online channels mainly involve transactions completed through electronic methods such as mobile payment and digital wallets, and promotion relies on social media and platforms; offline channels refer to services provided directly in physical scenarios such as commercial complexes, cinemas, airports, train stations, etc. Although online channels do not directly involve service delivery, they promote transaction convenience through mobile payment and digital platforms, and their role in marketing and user interaction is expected to further strengthen in the future. Among offline channels, the commercial complex segment is the largest market, with a market size reaching 11.48 billion yuan in 2024, with a compound annual growth rate of 18.0% during this period.

The Chinese machine massage service market is highly concentrated, with a few leading companies occupying most of the market share. These top enterprises have captured a large consumer base by virtue of their extensive service network distributed in crowded places such as commercial complexes, cinemas, airports, and train stations. Their competitive advantages come from economies of scale, outstanding brand recognition, and attention to technological innovation, such as application-based payments and customized massage experiences. Therefore, smaller competitors face significant entry barriers, which consolidate the existing positions of these major companies in the market.

According to a Frost & Sullivan report, calculated based on transaction volume in 2024, the top five machine massage service providers in China collectively account for more than 86% of the market share, forming a highly concentrated competitive landscape. Lemo Technology is a leading enterprise in the Chinese machine massage service market. Based on transaction volume in 2024, Lemo Technology ranks first among all machine massage service providers, with a market share of 42.9%, far exceeding other competitors.

Data source: Analysis by Frost & Sullivan

● Increase penetration efforts and develop the low-end market

According to operational data provided by official sources such as the Ministry of Transport and preliminary research by Frost & Sullivan, there are significant differences in the comprehensive penetration rate of robotic massage services across cities of different sizes: by 2024, it was about 60% in first- and second-tier cities, and about 38% in third- and fourth-tier cities. Although the penetration rate in third- and fourth-tier cities still lags far behind that in first- and second-tier cities, these emerging markets still maintain considerable growth potential. The continuous growth in income levels and market penetration indicates that they have transitioned into a more dynamic development stage. In terms of application scenarios, the growth momentum in emerging areas is particularly strong: robotic massage equipment is rapidly expanding to new application scenarios such as hospital rehabilitation therapy and e-sports training bases, providing precise rehabilitation assistance while alleviating muscle strains and nerve fatigue. In contrast, the recovery of traditional transportation hubs is slower: the railway station recorded revenue of 6 billion yuan during this period, with a CAGR of -1.2%. At the same time, market growth is fundamentally driven by the consumption upgrade in lower-tier cities. From 2020 to 2024, the proportion of middle-class families in these regions increased from 19% to 28%, driving continuous growth in health consumption.

● Achieve market growth through diversified scenario expansion

Through strategic expansion in emerging and traditional business areas, the machine massage service market is experiencing strong growth. Service providers are actively entering highly potential non-traditional venues (such as esports venues, office complexes, and electric vehicle charging stations), capitalizing on durable, space-saving equipment design and innovative partnership models to capture consumers' demand for accessible health solutions during transitional periods. At the same time, with increasing market acceptance, mature venues with high foot traffic such as shopping malls and airports are strengthening their deployments. Massage stations have evolved from novel products to standard facilities, driving an increase in unit density within existing locations and the expansion of new properties in this category.

● Operational Intelligence and Refinement

With continuous technological progress, machine massage services are increasingly utilizing IoT and big data to improve operational efficiency. The maturity of these technologies enables real-time monitoring of devices, predictive maintenance, and digital decision management, thereby providing more services and opportunities. The transformation towards mechanization and refined operations allows machine massage service providers to optimize service quality, reduce downtime, and better match supply and demand. Advanced data analysis can also help customize consumer experiences, ensuring that services meet individual preferences and maximizing consumer satisfaction.

●Market integration

With the maturity of the machine massage service industry, market integration has become a major trend. Leading brands are increasingly concentrating, driving the integration of existing service scenarios, improving the service quality provided by these scenarios, and expanding into unexploited service areas. Headquartered machine massage service providers expand their market share through mergers and acquisitions, strategic partnerships, and enhancing their brand image, while smaller and less competitive providers are gradually being phased out. This integration creates economies of scale, reduces market competition, and enables large brands to optimize the operation of existing scenarios, improve service quality, and more effectively explore new application areas.

● Accelerated international expansion

Leading machine massage service providers in the industry are accelerating their international expansion, especially in regions with strong economic growth and a widespread acceptance of the machine economy model such as Southeast Asia. Traditional massage culture, combined with lower labor and operational costs, provides strategic advantages for machine massage service providers entering these markets. As industry leaders, these brands are well-positioned to take advantage of the growing demand in international markets, providing new profit growth points and enhancing their global competitiveness.

●Increased demand for massage services on machines

The emphasis on privacy and immersive experiences has driven the market towards more enclosed and tranquil environments, allowing consumers to enjoy more focused and undisturbed experiences. What people seek is not only quick relaxation but also comprehensive health care services consistent with their pursuit of a healthier lifestyle. This has prompted machine massage service providers to integrate big data and IoT technology to offer customized health experiences. These trends highlight consumers' growing expectations for health-centered smart services in their daily lives, laying the foundation for the next wave of innovation in the machine massage service industry.

● Brand barriers

Compared to small machine massage service providers, large brands in the market typically occupy a significant number of gold service locations, such as crowded areas like Wanda commercial complexes. These points have been pre-occupied by large machine massage service providers. Due to these high consumer traffic locations being not only attractive for attracting a large number of consumers but also enhancing brand exposure and influence, it is difficult for small machine massage service providers to find the same market opportunities. Moreover, large brands have established strong trust and recognition in the minds of consumers through long-term market accumulation. Consumers tend to prefer well-known large or chain brands because these brands usually represent higher service quality and reliability. The lack of brand awareness and market influence among small machine massage service providers puts them at a disadvantage in competing for consumer trust and loyalty. Therefore, to compete in this market dominated by large machine massage service providers, small service providers face significant brand barriers and entry difficulties.

●Channel barriers

In the machine massage service market, the relationship with channel partners is crucial, especially when it comes to collaborating with core consumer scenarios such as well-known commercial complexes, cinemas, airports, and railway stations. For example, establishing solid cooperative relationships with large commercial complexes like Wanda can bring stable foot traffic and high brand exposure to the enterprise. These cooperative relationships are not easily established; large channel partners like Wanda typically only cooperate with machine massage service providers that have already built a strong brand reputation and reliable services. Finding and establishing key channels requires tremendous effort in marketing, relationship building, and continuous product improvement, which poses a significant obstacle for machine massage service providers hoping to enter this highly competitive market.

●Technical barriers

Massage equipment is a highly technical product that integrates mechanical and electronic technology, modern control technology, sensor technology, new material technology, ergonomic principles, as well as traditional Chinese massage and meridian acupoint therapy. New market entrants who wish to achieve technological breakthroughs need to invest a large amount of research and development funds and time, as well as possess a high-quality research and development team.

●Manage operational barriers

The management and operation of machine massage services require efficient logistics distribution, a professional maintenance team, and a mature consumer service system. New market entrants need to establish a complete set of operational systems within a short period, which is a huge challenge for others.