China Foods Holdings Reports Significant Revenue Decline and Increased Net Loss in Q1 2025

China Foods Holdings Ltd. reported a significant decline in financial performance for the first quarter of 2025, with net revenue dropping to $41,000 from $23.9 million in the same period of 2024. The company attributed this decrease to temporary operational adjustments and challenging market conditions that impacted sales. The cost of revenue also decreased to $16, resulting in a gross profit of $25, compared to $17.9 million in the previous year. The gross profit margin fell to 61% from 75%, reflecting the adverse effects of reduced sales volume.

The company's total operating expenses increased to $103.8 million from $95.4 million year-over-year, primarily due to general inflation in operational costs. Consequently, China Foods Holdings recorded a net loss of $103.6 million for the three months ended March 31, 2025, compared to a net loss of $61.7 million in the same quarter of 2024. The increase in net loss was largely driven by the decline in revenue, which was insufficient to cover the company's operating expenses.

In terms of operational metrics, the company reported a cash balance of $23.6 million as of March 31, 2025, down from $39.2 million at the end of 2024. Current liabilities exceeded current assets by approximately $989.5 million, and the accumulated deficit increased to $2.24 billion. Customer deposits rose to $459.2 million from $415.8 million, indicating ongoing customer commitments despite the revenue decline. The company continues to rely on financial support from its controlling shareholder to meet its obligations.

China Foods Holdings operates primarily in two segments: healthcare and wine. The healthcare segment generated $41,000 in revenue during the first quarter of 2025, while the wine segment, which had previously contributed significantly to revenue, reported no sales. The company is actively reviewing its strategies to address the challenges faced in the market and is optimistic about improving performance in future periods. Management has indicated that they expect to continue relying on cash generated through financing from existing stockholders and private placements to support operations and potential acquisitions.

Looking ahead, China Foods Holdings remains focused on enhancing its product offerings and customer engagement strategies. The company is committed to providing customized health and wellness solutions and is monitoring market conditions closely to adapt its operations accordingly. Despite the current challenges, management believes that the company has sufficient resources to fund its operations for at least the next 12 months, supported by ongoing contracts and customer payments.