Shineco Reports 32.15% Revenue Increase to $5.2 Million Amid Strategic Shift

Shineco, Inc. reported a significant increase in revenue for the six months ended December 31, 2024, achieving $5.2 million, a 32.15% rise from $4.0 million in the same period of the previous year. The company's gross profit remained relatively stable, increasing slightly to $413,301 from $411,273. However, the company experienced a net loss of $4.8 million, a notable improvement from the $8.6 million loss reported in the prior year, primarily due to reduced general and administrative expenses.

The financial performance reflects a strategic shift following the acquisition of Wintus, which has allowed Shineco to expand its agricultural product offerings. Revenue from agricultural products surged to $5.0 million, up 37.42% from $3.6 million, driven by increased sales of fresh fruits. Conversely, revenue from the rapid diagnostic segment decreased by 27.41% to $217,120, attributed to a decline in customer orders. The healthy meals segment saw a drastic reduction in revenue, dropping to $949 from $11,104, as the company temporarily suspended this line due to low market acceptance.

Operationally, Shineco's total current assets rose to $36.2 million as of December 31, 2024, compared to $20.9 million at the end of June 2024. This increase was largely due to a significant rise in advances to suppliers, which reached $20.2 million, up from $10.0 million. The company's current liabilities also increased to $42.2 million, resulting in a working capital deficit of $6.0 million. The company’s management has expressed concerns regarding its ability to continue as a going concern, given the accumulated deficit of $58.0 million and negative working capital.

In terms of strategic developments, Shineco has engaged in several financing activities, including a securities purchase agreement that raised approximately $7.0 million from non-U.S. investors and a public offering that generated about $2.0 million. Additionally, the company completed a reverse stock split at a ratio of 1-for-24, effective November 12, 2024, aimed at improving its stock price and market perception. The company also plans to continue exploring mergers and acquisitions to enhance its market position.

Looking ahead, Shineco's management remains focused on improving liquidity and operational efficiency while navigating the challenges posed by market conditions and regulatory environments in China. The company is optimistic about its ability to leverage its recent acquisitions to drive growth and stabilize its financial performance in the coming months.