Product and Service

Companies included in fitness equipment sector in personal care industry primarily are designers, developers, and marketers of cardio and strength fitness products and accessories.


Demand for Product and Service

As indicated by typical sales data, the demand for fitness products seems to be solid and may gain increasing support from individual consumers’ market as people’s lifestyle changes and household income increase.

The Sector

Sector’s Current, Trend, Causes behind trend, and Future

Current and Trend
  1. Generally, the demand for cardio and strength wellness equipment has been solid and fluctuated with different stages in a normal cycle of product while there is no clear sign indicating that demand for fitness equipment will boom in a short future.
  2. In the increasing competition, products renovation seems to be more and more important in helping companies maintain their market share and ease downturn pressure on price.
Causes behind the trend
  1. Demand for products in this sector should have been determined by general economic development, growth in household income, and change in consumers’ lifestyle.
Industry Future
  1. As consumers’ awareness of healthy lifestyle increases, demand for fitness product should be able to gain more support from individual consumers’ market.


General Financial Performance of Companies In the Sector

It seems that demand, from consumers by direct selling channels, for cardio products has been strong as new cardio products were launched in 2013 by some of typical company in this sector, while the total demand has been generally declining in the past two years. However, offset by quickly increasing demand for strength products, the organic sales in this sector had been basically kept stable.
Declining demand, especially from its direct selling of cardio products, seems to put huge pressure on the price as indicated by the increasing discounting activities for those products.
We have seen a slight declining in typical companies ‘gross margin (about 50% in 2017). However, the spending in SG&A has been leveraged due to increased sales as a result of acquisition. Therefore, the typical operating margin has been flat at about 11% since 2014.
The typical average stock price/cash flow ratio is about 15.

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