Longduoduo Co Ltd, a Nevada-based holding company operating through subsidiaries in the People's Republic of China (PRC), has released its annual 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the healthcare industry. Longduoduo primarily functions as a sales agent and distributor for third-party healthcare service providers, focusing on preventive healthcare solutions.
Financial Highlights
- Total Revenue: $4.26 million, a decrease of 42% compared to the previous year, primarily due to the economic environment and the impact of the pandemic recovery.
- Gross Profit: $4.17 million, reflecting a gross margin of 25% from service revenue and no cost of revenue for commission revenue.
- Income from Operations: $0.55 million, a significant decrease due to high marketing expenses aimed at brand establishment.
- Net Income: $0.49 million, decreased by 64% from the previous year, influenced by reduced revenue and high operating expenses.
- Basic and Diluted Income Per Share: $0.015, reflecting the overall decrease in net income attributable to common stockholders.
Business Highlights
- Corporate Structure: Longduoduo Company Limited is a Nevada corporation functioning as a holding company, with all business operations conducted through seven subsidiaries located in the PRC. These subsidiaries are owned through an intermediary holding company registered in Hong Kong.
- Business Operations: The company operates primarily as a sales agent for third-party healthcare service providers and as a distributor of services provided by these providers. The focus is on preventive healthcare solutions, including disease screening and treatments for cardiovascular and cerebrovascular diseases.
- Commissioned Sales: Since June 2023, Longduoduo's subsidiaries have been engaged in selling health maintenance services provided by Inner Mongolia Honghai Health Management Co., Ltd. Over 97% of gross revenue for the year ended June 30, 2025, came from commissions earned through this agency relationship.
- Principal Sales: Prior to the agency agreements, the subsidiaries marketed healthcare services and products as principals, purchasing and reselling services from third-party providers. Service revenue from these principal sales fell by almost 63% in the year ended June 30, 2025, compared to the previous year.
- Geographical Performance: The company's operations are concentrated in Inner Mongolia, China, with subsidiaries established in major cities such as Hohhot, Ulanqab, Baotou, and Ordos.
- Future Outlook: Longduoduo plans to expand its product offerings, continue expanding its network coverage nationwide, and upgrade service standards to enhance customer experience. The company aims to establish itself as a leading health management service provider and sales agency in China.
- Regulatory Considerations: The company is subject to various regulations under Chinese law, which could impact its ability to conduct business, accept foreign investments, or list on a U.S. or other foreign exchange. Changes in regulatory mandates, such as the M&A rules and Data Security Law, may affect the company's operations.
- Operational Challenges: The company faces significant competition from public hospitals and private medical examination companies. It relies on third-party healthcare service providers for service delivery, which poses risks related to service quality and regulatory compliance.
- Employee Overview: Longduoduo employs 52 full-time employees, all located in the PRC, with roles spanning management, administrative, operations, and customer services.
Strategic Initiatives
- Strategic Initiatives: The company has been focusing on expanding its operations by engaging in agent sales of preventive healthcare solutions, which began in June 2023. This strategic move is aimed at diversifying revenue streams and leveraging partnerships with third-party providers like Honghai. Additionally, the company is implementing plans to improve operations by adjusting its operational policies in response to economic conditions.
- Capital Management: The company has not declared or paid any cash dividends since its inception, opting to retain earnings for business use. A 1-for-10 reverse stock split was executed on September 26, 2023, to consolidate shares and potentially enhance marketability. The company did not engage in any equity repurchase activities during the fiscal year ended June 30, 2025. As of June 30, 2025, the company had $1,642,721 in cash and cash equivalents, with a working capital of $983,123, primarily due to deferred revenue from customer prepayments.
- Future Outlook: The company anticipates future liquidity requirements will arise from the need to fund growth, pay current obligations, and support capital expenditures. It plans to meet these needs through cash generated from operations and potential public offerings or debt financing. The company expects continued support from its majority shareholder, Zhang Liang, if necessary. Additionally, the company is preparing to invest heavily in advertising and promotion to establish and expand its brand and services.
Challenges and Risks
- Revenue Concentration Risk: 97% of revenue comes from a single source, Inner Mongolia Honghai Health Management Co., Ltd. Termination of this relationship could severely impact financial results.
- Third-Party Reliance: Dependence on third-party healthcare service providers poses risks of reputational harm and liability if services are substandard.
- Cybersecurity and Data Privacy: The company is vulnerable to cyber-attacks and data breaches, which could disrupt operations and damage reputation.
- Regulatory Risks in China: The PRC government exercises significant control over business operations, which could interfere with the company's ability to conduct operations and finance its subsidiaries.
- Market Competition: The company operates in a competitive environment with numerous hospitals and private clinics, which could erode its market position.
- Growth Management: Limited resources may hinder the company's ability to manage planned growth effectively.
- Capital and Financing Risks: Additional capital may not be available on favorable terms, potentially limiting growth and operational flexibility.
- Management Risks: Loss of key personnel could negatively impact product development and sales.
- PRC Legal and Regulatory Environment: Changes in U.S.-China relations and PRC regulations could adversely impact business operations and the ability to raise capital.
- HFCAA Exposure: The company is subject to potential sanctions under the Holding Foreign Companies Accountable Act, which could lead to delisting if PCAOB inspections are not possible.
SEC Filing: