LEMO SERVICES, the operator of scan-and-use massage chairs commonly found in cinema lobbies, is making a final push for its IPO. The company recently launched its Hong Kong listing process, despite slowing revenue growth and a net profit decline in 2024.
**Slowing Growth Trajectory** Founded in 2014, LEMO SERVICES introduced its "LEMO Bar" brand in 2016, deploying massage chairs in commercial complexes, cinemas, and transport hubs. While revenue grew from RMB 330 million in 2022 to RMB 798 million in 2024, the growth rate dropped sharply from 77.75% to 35.98%. In the first eight months of 2025, revenue reached RMB 631 million, with growth further slowing to 13.8%.
Net profit turned negative in 2024 (-1.76%) and worsened in 2025 (-5.68%), reflecting intensifying profitability pressures. The company relies heavily on its direct-operation model, which contributes 83.49% of revenue but suffers from low gross margins (30.38%). In contrast, the higher-margin partner model (70%+ gross margin) has been shrinking, with partner numbers dropping from 68 in 2022 to 41 by 2025.
**Cinema Overconcentration, Low Efficiency** LEMO SERVICES aggressively expanded its device count from 167,100 in 2022 to 536,400 by August 2025, with over 80% (446,600) deployed in cinemas. However, cinema locations contributed just 26.28% of revenue, with per-device daily transactions falling to 0.11—far below other venues like shopping malls and airports.
Analysts note a severe mismatch between deployment and returns, as cinema-goers prioritize viewing films over massage services. The company defends its strategy by citing lower installation costs in cinemas, but the oversupply has diluted per-unit utilization.
**Industry Challenges** China’s machine-based massage market remains niche, accounting for just 0.5% (RMB 2.7 billion) of the broader massage industry in 2024. Growth is constrained by non-essential demand, with consumers often opting for social activities or professional massage services instead. Competitors like "Momoda" have already exited the space, while LEMO SERVICES plans to use 60% of its IPO proceeds (HKD 147 million) for further expansion.
With 446,600 idle chairs in cinemas and shrinking margins, the company’s capital-driven growth faces skepticism. Whether it can escape the "scale without profit" trap remains uncertain.
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