HONG YUAN HOLDING GROUP SEC 10-Q Report

Hong Yuan Holding Group, a company engaged in the wholesale and internet sales of fast-moving consumer goods including food, daily necessities, and electronic products, has released its Form 10-Q report for the second quarter of 2025. The report highlights a remarkable financial turnaround driven by the ramp-up of operations in its Chinese Variable Interest Entities (VIEs).

Financial Highlights

Revenue: The company reported revenue of $112.812 million for the three months ended June 30, 2025, a substantial increase from $15.205 million in the same period last year. This growth was primarily attributed to the enhanced operations of its Chinese VIEs.

Gross Profit: Gross profit for the quarter was $95.560 million, compared to $9.056 million in the same period last year, reflecting significant improvements in operational efficiency.

Operating Income from Continuing Operations: The company achieved an operating income of $37.884 million, a notable turnaround from an operating loss of $23.070 million in the same period last year.

Net Income: Net income for the quarter was $29.679 million, compared to a net loss of $22.911 million in the same period last year. This improvement was driven by increased revenue and operational enhancements.

Basic and Dilutive Net Income (Loss) Per Common Share: The company reported a basic and dilutive net income per common share of $0.00 for the three months ended June 30, 2025, compared to $(0.00) in the same period last year, indicating improved financial performance.

Business Highlights

Revenue Segments: The significant increase in revenue was driven by the operations of the company's Chinese VIEs, which have been ramping up since the second quarter of 2024. These entities are involved in the wholesale and internet sales of fast-moving consumer goods, including food, daily necessities, and electronic products.

Geographical Performance: The company's operations in China, through its VIEs, have been a major contributor to the revenue increase. The Chinese market has shown strong performance as the VIEs have expanded their operations.

Business Model Change: In April 2025, the company changed its business model by relinquishing its 55% ownership in Xuchang, a subsidiary, while still funding the opening of stores operated by Xuchang. This strategic shift aims to recover investment funds as loans from the stores' profits.

Future Outlook: The company plans to continue expanding its operations in the Chinese market, leveraging its VIEs to increase revenue from the sale of consumer goods. Management is focused on achieving profitability and positive cash flows, although there is substantial doubt about the company's ability to continue as a going concern without additional financing.

SEC Filing: HONG YUAN HOLDING GROUP [ HGYN ] - 10-Q - Aug. 19, 2025