The smart garden ecosystem maker boasts strong double-digit revenue growth

image credit: Bamboo Works

Key Takeaways:

• Fairland Corp. has submitted its IPO application to China's securities regulator, bringing it closer to a Hong Kong listing after filing its preliminary prospectus in April
• The company is using its expertise as a leading smart swimming pool equipment maker to expand into the adjacent and much larger market for smart garden equipment

Outdoor living spaces are fast becoming the next frontier for smart homes, with traditional devices like pool cleaners, swim jets and even lawnmowers getting major upgrades using AI and internet connections to create smart gardens of the future. That process goes beyond simply linking devices, with the potential to reshape the way homeowners interact with their outdoor environs.

That's the proposition being made to investors by Fairland Corp. Ltd., whose plans for a Hong Kong IPO moved ahead on May 27 when its listing application was officially accepted by the China Securities Regulatory Commission (CSRC), according to the regulator's website. That step follows Fairland's submission of its original preliminary prospectus to the Hong Kong Stock Exchange on April 17, followed by an updated filing on April 30.

Both the CSRC and the Hong Kong Stock Exchange must vet the listing plan and give their separate approvals before an IPO can occur, which could happen later this year.

The company hasn't disclosed any fundraising plans just yet. But any proceeds would be used for additional development of its existing ecosystem of interconnected equipment and devices, as well as new devices in its pipeline. Its current stable of pool-related devices includes smart heat and water pumps, salt chlorinators, pool-cleaning robots, swim jets and multiport valves.

Fairland acknowledges its smart product aspirations don't come at a low cost, reflected in its climbing R&D costs. What's more, competition is heating up in the global market for integrated smart garden robot ecosystems, as more companies enter the rapidly growing space. That's putting pressure on Fairland's margins and bottom line, which it's trying to counter by developing its own brand, rather than manufacture for other brands; and by selling more products directly to consumers, rather than through costly distributors.

The company and its peers are chasing a global integrated smart garden robot ecosystem market that was worth nearly $20 billion last year is growing at double-digit rates. The global smart pool equipment market that is Fairland's core business was worth $3.1 billion in 2024 and is forecast to grow 15.4% annually to $6.34 billion in 2029, according to third-party research in the preliminary prospectus. The smart garden equipment market is even larger, expected to grow 17.3% annually from $15.9 billion in 2024 to $35.3 billion in 2029.

Fairland was the largest China-based pool equipment maker in 2024 with 3.4% of the global market. Its strongest suits were smart pool heat pumps, where it controlled 15% of the global market, and smart pool water pumps, where it controlled 6.6%. Many of its devices are connected to the internet of things (IoT), allowing owners to access and use them remotely using the company's iGarden app.

Fast growth

There are many ways to parse Fairland's revenue, including by product type, geography and direct sales versus sales through distributors. But at the highest level, the company's revenue is growing quite rapidly. It rose 33% last year to 1.02 billion yuan ($151 million) from 765 million yuan a year earlier. The latest annual figure is also more than double the 488 million yuan Fairland reported in 2023, showing it's finding a growing audience for its products.

Founded in 2004, the company started off making traditional pool equipment before moving into its more automated, connected smart portfolio of devices – a transition it likens to going from feature phones of the early cellphone era to today's smartphones that can do much more. It points to its launch of a binocular-vision AI pool cleaning robot earlier this year as one of its latest cutting-edge achievements. Such robots use the technology to actually "see" the pool environment around them to do things like avoiding obstacles and targeting areas with higher dirt accumulation for more intensive cleaning.

Such robots are the company's second biggest breadwinner, logging 18% year-on-year growth last year to reach 104 million yuan, accounting for about 10% of its revenue. Its biggest category – and one of its strongest performers – is its core smart pool heat and water pumps, which it groups together as "energy management products." Sales for that segment rose 31% year-on-year last year to 823 million yuan, accounting for about 80% of its revenue.

The company made its first big move beyond the pool with its launch of smart lawnmowers in 2023. That segment has recorded explosive growth since then, rising from just 167,000 yuan in 2024 to 1.43 million yuan last year, though it still accounts for less than 2% of overall revenue.

Despite the healthy increases, growing competition and high product development costs are weighing on the company's profitability. The former element shows up in Fairland's gross margin, which fell to 33.0% last year from 36.1% in 2024. The latter shows up in its R&D spending, which rose to 14% of revenue last year from 12% in 2024.

Its sales and distribution costs also rose to 21.2% of revenue last year from 10.8% in 2024, as it began cultivating more direct sales using its own and third-party e-commerce websites. Such efforts should ultimately help the company's profitability by cutting out costly distributors that still account for the vast majority of its sales. Another effort at boosting its profitability comes from Fairland's development of its own brands, including iGarden, Fairland, Aquark and Aquagem. Such higher-margin branded sales surpassed its original ODM business for the first time last year.

The bottom line for Fairland is that smart product ecosystems are clearly the wave of the future, both for swimming pools and the yards where it hopes to enter new terrain. But such efforts take both time and money, and Fairland isn't the only company looking for a place in a global market with such strong growth potential.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.