Once regarded as one of China’s earliest and most recognizable brands in portable massage devices, BREO (倍轻松) is now facing the most severe crisis since its establishment.

Founded in 2000, BREO built its reputation on portable massage products targeting the head, eyes, neck, shoulders and scalp, positioning itself at the intersection of traditional Chinese medicine concepts and modern industrial design.

Through years of heavy investment in airport and high-speed rail station retail stores, the company successfully created a “premium, gift-oriented, white-collar health” brand image.

In 2021, BREO was listed on Shanghai’s STAR Market (Sci-Tech Innovation Board) under stock code 688793, earning labels such as “China’s first listed portable massage device company” and “smart health hardware pioneer”.

Four years later, that halo has largely faded.

1. Regulatory Investigations and a Collapsing Market Value

In December 2025, BREO was hit by two major events in quick succession:

• December 24, 2025: the company was sued for patent infringement, with claimed damages of RMB 10 million (≈ USD 1.4 million).

• December 25, 2025: BREO and its actual controller and chairman, Ma Xuejun, received a formal investigation notice from the China Securities Regulatory Commission (CSRC) for suspected information disclosure violations.

What intensified market shock was timing: one month before the investigation, Ma Xuejun had completed a personal share reduction, cashing out nearly RMB 60 million (≈ USD 8.5 million).

The day after the investigation was announced, BREO’s share price plunged nearly 15%. From its yearly peak, market capitalization has almost been cut in half.

Zooming out further, since its 2021 IPO, the stock has lost nearly 90% of its value.

This sharp repricing reflects not a single incident, but years of accumulated governance and operational concerns.

2. Long-Term Governance Failure: When Regulatory Patience Runs Out

The investigation did not come out of nowhere.

Between 2022 and the first half of 2025, BREO received regulatory letters or inquiry notices almost every time it released annual or interim financial statements.

Key issues repeatedly raised by the Shanghai Stock Exchange included:

• Revenue recognition authenticity

• Cost and expense allocation

• Related-party transactions

• Non-operating fund occupation by controlling shareholders

In China’s A-share market, such high-frequency, multi-year regulatory scrutiny is rare and typically signals that a company has been placed on a “watch list.”

In July 2025, BREO issued a financial correction announcement, acknowledging serious errors in previously disclosed information:

• Funds occupied by the actual controller were revised from RMB 54 million (≈ USD 7.6 million) to RMB 85.93 million (≈ USD 12.1 million)

• Non-operating related-party fund transactions showed discrepancies approaching RMB 10 million (≈ USD 1.4 million)

These revisions revealed not only disclosure failures, but also a near breakdown of internal controls.

In its 2024 annual report, auditors issued an unqualified opinion with an emphasis-of-matter paragraph, explicitly highlighting risks related to non-operating fund occupation and irregular guarantees. The problems, however, remained unresolved.

3. “One-Man Control” and the Collapse of Internal Checks

At the core of BREO’s troubles lies an extremely centralized governance structure.

Since listing, the company has experienced frequent executive turnover:

• The CFO resigned after just four months

• Board secretaries and key technical staff changed repeatedly

• Of the six senior executives disclosed in the IPO prospectus, half resigned before completing their terms

Meanwhile, Ma Xuejun simultaneously held multiple critical roles, including:

• Chairman

• CEO

• Board Secretary

• Financial Controller (at different periods)

This concentration of strategic, operational, financial and disclosure authority in a single individual severely weakened internal checks and balances, creating structural conditions for fund misappropriation and disclosure violations, while also causing strategic inconsistency and organizational instability.

4. Financial Performance: A Classic “IPO Peak” Pattern

BREO’s financial data mirrors its governance issues:

Revenue

• 2022: RMB 896 million (≈ USD 126 million), –24.7% YoY

• 2023: RMB 1.275 billion (≈ USD 180 million), +42.3% YoY

• 2024: RMB 1.085 billion (≈ USD 153 million), –14.9% YoY

Profitability

• Core profits turned negative immediately after listing

• 2024: brief net profit of RMB 10.25 million (≈ USD 1.4 million)

• First three quarters of 2025: net loss of RMB 65.63 million (≈ USD 9.2 million), a 600%+ deterioration YoY

This trajectory fits the increasingly familiar pattern of “listing as the peak” among some consumer hardware companies in China.

5. Apple-Level Gross Margins — but No Net Profits

Ironically, BREO’s gross margins have long hovered around 60%, comparable to premium consumer electronics brands.

So where did the profits go?

Heavy Marketing Burn

After listing, BREO adopted an increasingly aggressive marketing strategy.

Its selling expense ratio rose from ~40% to over 50%, meaning:

For every RMB 100 of revenue, more than RMB 50 was spent on sales and marketing.

The company continuously hired top-tier celebrities as brand ambassadors, culminating in Olympic table tennis champion Sun Yingsha signing on in late 2025.

Rigid Channel Cost Structure

The deeper issue lies in channel strategy.

Unlike its key competitor SKG, which relies on a light-asset, distributor-led, online-first model, BREO insisted on premium offline direct retail:

• Airports and high-speed rail stations

• High rents and labor costs

• Heavy fixed expenses

As of mid-2025, BREO still operated 125 self-owned stores.

When revenue declines, this cost structure acts as a loss amplifier rather than a buffer.

By contrast, SKG’s parent company Future Wearables maintained stable profitability with similar revenues, highlighting how channel strategy — not just marketing spend — determines financial outcomes.

6. Product Homogenization: The Real Strategic Bottleneck

From an industry perspective, massage devices suffer from inherently weak moats:

• Mature technologies (mechanical massage, TENS/EMS)

• High substitutability

• Low repurchase frequency

Although BREO promotes narratives such as “TCM + AI” and has launched AI-enabled scalp diagnostics and health apps, real market traction remains limited:

• App downloads far lag behind competitors

• Excessive SKU fragmentation diluted R&D efficiency

• Core categories (neck, shoulder, head, eye) declined 20–60% YoY in 1H 2025

• Quality complaints are widespread on Chinese e-commerce and social platforms

In essence, BREO has yet to build a product-driven moat beyond branding and pricing.

Real Recovery Starts with Governance, Not Storytelling

BREO’s ongoing experiments with service-based models (in-store massage experiences) and AI health narratives are not illogical.

However, without resolving governance dysfunction, rigid cost structures and product competitiveness, no new narrative can sustainably deliver growth.

For a company once seen as a category pioneer, the real inflection point lies not in what story it tells next, but in whether it can:

Restore governance discipline, rebuild organizational trust, and refocus on genuine product value.

Until then, most “turnaround strategies” risk becoming tactical delays rather than a true reset of the business.

Source: Qingchen Finance