Hong Yuan Holding Group Reports Revenue Growth to $245,572 Amid Ongoing Financial Challenges

Hong Yuan Holding Group reported a significant increase in revenue for the fiscal year ending December 31, 2024, generating $245,572 compared to no revenue in the previous year. This growth is attributed to the consolidation of its Chinese variable interest entities (VIEs), which began generating revenue in the second quarter of 2024. Despite this positive development, the company continues to face challenges, including an accumulated deficit of $97.8 million and a net working capital deficit of $243,326, raising concerns about its ability to continue as a going concern.

Operating expenses for the year rose to $189,198, up 22.5% from $154,476 in 2023, primarily due to increased general and administrative costs, including rent and personnel expenses. The company reported a net loss of $96,437 for 2024, a decrease of 37.6% from the previous year's loss of $154,464. This reduction in net loss was largely driven by the increase in gross profit from the newly consolidated entities, although it was partially offset by rising operating expenses.

In terms of strategic developments, Hong Yuan Holding Group completed a significant acquisition on October 1, 2024, acquiring 100% equity interest in Hongyuan International Holding Group Co., Ltd. for approximately $64,103. This acquisition is part of a broader strategy to enhance its supply chain management services, focusing on the wholesale and internet sales of fast-moving consumer goods, including food and household items. The company has also established operational control over Fengcuiyuan Chang Technology Development Co., Ltd., which owns a majority stake in Rongcheng (Sichuan) Supply Chain Management Co., Ltd.

As of December 31, 2024, Hong Yuan employed 10 full-time staff members, including one executive and two finance personnel. The company has opened operational stores in Chongqing and Jiangyou, with plans for further expansion. The business model has evolved to focus on customer acquisition through partnerships, where the company funds store openings and operations while regional partners attract consumers. This model aims to build a loyal customer base through various incentives.

Looking ahead, Hong Yuan Holding Group acknowledges the need for additional financing to sustain operations and achieve profitability. The management plans to seek equity or debt financing but has not secured any arrangements as of now. The company’s future performance remains uncertain, and it may continue to incur losses in the foreseeable future, highlighting the importance of strategic execution and financial management in navigating its operational challenges.