Executive Summary / Key Takeaways

• Longduoduo Company Limited (LDDD) operates as a Nevada holding company with specialized preventive healthcare solutions in China, focusing on cardiovascular and cerebrovascular diseases through a hybrid agency and principal sales model.
• The company experienced a significant 42% decline in total revenue to $4.26 million in fiscal year 2025, primarily due to a post-pandemic surge in the prior year and a challenging economic environment impacting customer health expenditures.
• LDDD's business model is heavily concentrated, with over 97% of its gross revenue in fiscal year 2025 derived from a single sales agency agreement with Inner Mongolia Honghai Health Management Co., Ltd., which expires in June 2026.
• The company possesses a competitive edge through its specialized, non-invasive therapies and established network of third-party providers, but faces vulnerabilities from its smaller scale, lower brand recognition compared to large public hospitals, and the dynamic PRC regulatory landscape.
• Despite recent financial headwinds, management plans to expand service offerings, increase nationwide network coverage, and enhance service standards, while continuing substantial investments in advertising and promotion to build its brand.

Longduoduo's Strategic Foundation in China's Preventive Healthcare

Longduoduo Company Limited (LDDD) is a Nevada-incorporated holding company whose entire operational footprint is rooted in the People's Republic of China (PRC) through a network of seven subsidiaries. The company has strategically positioned itself within China's burgeoning preventive healthcare sector, with a core mission to offer comprehensive, high-quality solutions aimed at preventing critical conditions such as myocardial infarction, cerebral infarction, hemiplegia, and various cardiovascular and cerebrovascular diseases. This focus aligns with a broader industry trend of increasing demand for proactive health management in China, driven by an aging population and rising health awareness.

LDDD's overarching strategy has evolved into a hybrid model, combining commissioned sales as an agent for third-party providers with direct principal sales of healthcare services and products. This dual approach allows the company to leverage established partnerships while maintaining a direct connection to service delivery. The company's historical journey, beginning with the establishment of its earliest operating entities in Inner Mongolia in 2020, underscores a foundational commitment to building a localized, provider-centric network. A pivotal shift occurred in June 2023, when LDDD's operating subsidiaries primarily transitioned to acting as sales agents for Inner Mongolia Honghai Health Management Co., Ltd. (Honghai), a move that has profoundly shaped its current revenue profile.

The Technological Edge: Differentiated Therapies for Advanced Prevention

LDDD distinguishes itself through a portfolio of specialized preventive healthcare solutions, many of which leverage unique therapeutic approaches. These offerings are foundational to the company's competitive strategy, providing a differentiated value proposition in a crowded market. The core services include Meridian-regulating and Consciousness-restoring Iatrotechnics, a traditional Chinese medicine treatment with anti-thrombotic properties, and Double Blood Purification, a German-technology-based treatment for cardiovascular and cerebrovascular diseases that physically removes pathogens and toxins from the blood. Other key offerings include Immunological Ozonated Autohemotherapy, PRP (platelet-rich plasma) for joint issues, Relaxation therapy, Vegetative Nerve Regulation for pain management, and Microwave Therapy to reduce inflammation and improve circulation.

While specific quantitative performance metrics for these technologies are not publicly detailed, the tangible benefits articulated by the company are clear. These therapies are designed to offer targeted, often non-invasive, interventions for complex health conditions, potentially leading to improved patient outcomes in preventive care. For instance, the anti-thrombotic nature of Meridian-regulating Iatrotechnics directly addresses a critical aspect of cardiovascular disease prevention. The strategic intent behind these specialized services is to cultivate a niche market, attract patients seeking advanced and specific interventions, and potentially command premium pricing due to their perceived efficacy and unique nature. This specialization contributes to LDDD's competitive moat by making its services distinct from more generalized healthcare offerings.

In terms of research and development, LDDD's sales agency agreements with Honghai include an option to market new services developed by Honghai, indicating a pathway for technological expansion through partnerships. LDDD's long-term plan to "further expanding our product offerings" and "upgrading our service standards to enhance the customer experience" suggests an ongoing commitment to innovation and service refinement, which is crucial for maintaining its differentiated position and driving future growth.

A Dual Business Model: Agency Dominance and Principal Ambitions

LDDD's business model currently operates with a significant reliance on its commissioned sales segment. Since June 2023, the company's operating subsidiaries have primarily functioned as sales agents for health maintenance services provided by Inner Mongolia Honghai Health Management Co., Ltd. This agency relationship proved to be the overwhelming revenue driver in the most recent fiscal year, accounting for over 97% of LDDD's gross revenue for the year ended June 30, 2025. In this arrangement, LDDD's subsidiaries are responsible for promoting and selling Honghai's services, collecting payments, and forwarding them to Honghai net of a pre-approved commission. Honghai, in turn, bears the responsibility for service development, provision, quality, and customer liability.

Concurrently, LDDD maintains a principal sales segment where its subsidiaries act as distributors, purchasing and reselling healthcare services and products from third-party licensed medical institutions. These services, including specialized therapies like Double Blood Purification, are provided directly to customers by the healthcare providers, who also bear the associated medical liability. While this segment was the company's initial focus, service revenue from principal sales experienced a substantial decline of almost 63% in fiscal year 2025 compared to the prior year. Despite this contraction, management has articulated a clear long-term intention to "return our attention to principal sales and build a network of third-party healthcare service providers, product suppliers and our sales agents so that we can offer a broader array of products and services to potential customers" once the agency sales business has a firm foundation. This indicates a strategic ambition to diversify revenue streams and enhance control over the service offering in the future.

Financial Performance: Navigating Headwinds and Strategic Investments

Longduoduo's financial performance in the fiscal year ended June 30, 2025, reflects a period of significant transition and economic headwinds. The company reported total revenue of $4.26 million, marking a substantial 42% decrease from $7.39 million in the prior fiscal year. This decline was primarily attributed to two factors: a surge in revenue during fiscal year 2024 as Inner Mongolia emerged from the pandemic, leading to a backlog of services being delivered, and a subsequent decrease in customer health expenditures influenced by the prevailing economic environment.

Gross profit for the year ended June 30, 2025, mirrored the revenue trend, falling by 42% to $4.17 million from $7.22 million in the previous year. The cost of revenue, which relates solely to healthcare service revenue from principal sales, was $91,099 in fiscal year 2025, resulting in a gross margin of 25% for that segment, a notable decrease from 47% in fiscal year 2024. However, when combined with commission revenue, which carries no direct cost of revenue, the overall gross profit margin for the company remained high at 97.86% on a trailing twelve-month (TTM) basis.

Operating expenses decreased by 30% to $3.62 million in fiscal year 2025 from $5.19 million in fiscal year 2024. This reduction was largely driven by a decrease in advertising and promotion expenses, which were $1.94 million in fiscal year 2025 compared to $3.34 million in the prior year. Despite this reduction, management intends to "continue to invest heavily in advertising and promotion expenses in the near future as it continues to establish and expand its brand and products and services". The company's income from operations consequently saw a sharp 73% decline, settling at $552,679 for fiscal year 2025, down from $2.03 million in fiscal year 2024, primarily due to significant marketing investments aimed at brand establishment. Net income attributable to common stockholders also decreased by 64% to $460,435 in fiscal year 2025 from $1.26 million in the previous year.

From a liquidity perspective, LDDD held $1.64 million in cash and cash equivalents as of June 30, 2025, with a working capital of $983,123.

The working capital position was influenced by $335,484 in deferred revenue from customer prepayments, much of which was used for ongoing expenses. The company anticipates future liquidity requirements will stem from funding growth and capital expenditures, expecting to rely on cash generated from operations, public offerings, and debt financing. Critically, LDDD expects its majority shareholder, Zhang Liang, "to continue to provide support in the future, if needed". Operating cash flow for fiscal year 2025 was $277,365, primarily driven by net income partially offset by deferred revenue.

Competitive Landscape: Niche Strengths Against Broad Platforms

Longduoduo operates in a highly competitive Chinese preventive healthcare market, facing significant competition from both established players and emerging models. Its primary competitors are broadly categorized into the medical examination departments of major public hospitals and a diverse array of private medical examination companies, which include large national franchises, regional providers, and numerous local independent centers.

LDDD's competitive advantages stem from its "strong sales and marketing efforts, our innovative approach to the health care market and Our flexible management mechanism". The company's specialized therapies, such as Double Blood Purification and Immunological Ozonated Autohemotherapy, provide a niche focus that differentiates it from more generalized offerings. However, LDDD acknowledges several competitive disadvantages, including lower brand recognition compared to large public hospitals, less extensive geographical coverage than some private competitors, and a lack of equipment for certain highly technical medical tests. Government-owned hospitals also benefit from a significant competitive advantage by being exempt from income taxes on their medical income.

Comparing LDDD to identified competitors reveals distinct positioning:

• Ping An Good Doctor (PNGYF): LDDD's strength lies in its hands-on, specialized therapeutic depth, contrasting with Ping An's scalable digital health platform. While Ping An excels in accessibility and digital integration, LDDD's unique therapies could attract patients seeking advanced, targeted interventions, potentially leading to stronger customer loyalty in its niche. However, LDDD may lag in overall scalability and digital-driven financial efficiencies.
• Alibaba Health Information Technology (ALBHF): LDDD's physical therapies and third-party collaborations offer specialized treatment efficiency, but Alibaba Health's tech-driven approach, leveraging data analytics for preventive care, provides a broader ecosystem integration. Alibaba Health's diversified e-commerce revenue streams likely contribute to more robust cash flow generation, suggesting LDDD might face challenges in matching its growth rates and overall financial health.
• Fosun Pharma (FOSUY): LDDD's emphasis on innovative, non-invasive therapies for cardiovascular prevention provides a unique value proposition, potentially addressing unmet needs. This contrasts with Fosun Pharma's broader product-focused model and vertically integrated pharmaceutical operations. While LDDD leads in niche therapeutic innovation, Fosun's established distribution networks and diversified revenue sources offer greater operational scale and financial stability.

Indirect competitors, such as telemedicine platforms (e.g., Tencent's (TCEHY) WeChat-based health services) and AI-driven diagnostics, pose an additional threat. These alternatives could capture market share by offering more accessible and potentially lower-cost options, amplifying pressure on LDDD's revenue opportunities and potentially impacting profitability if adoption of digital solutions grows rapidly.

Barriers to entry in China's preventive healthcare industry, such as stringent regulatory approvals and high R&D requirements, generally favor established players. While these barriers could protect LDDD's existing market position by limiting new entrants, they also intensify competition with well-capitalized rivals who can navigate these complexities effectively.

Outlook and Strategic Trajectory: Expansion Amidst Uncertainty

Longduoduo's management is keenly aware of the current economic environment impacting customer health expenditures and is implementing plans to improve operations by adjusting its policies. The company's long-term strategic trajectory is ambitious, aiming to "expand the scope of our service offerings and ultimately establish our company as a leading health management service provider and sales agency in China". This goal is underpinned by a three-pronged strategy: "further expanding our product offerings, continuing to expand our network coverage nationwide and further upgrading our service standards to enhance the customer experience".

Management believes that "the government has recently introduced policies to promote economic recovery, but it may take some time for the situation to truly improve". In the interim, LDDD intends to "continue to invest heavily in advertising and promotion expenses in the near future as it continues to establish and expand its brand and products and services". While specific quantitative guidance figures for future revenue or profitability are not available, the strategic intent is clear: to build a stronger brand and broader market presence, eventually shifting attention back to principal sales to offer a wider array of products and services.

Key Risks to the Investment Thesis

Investing in Longduoduo carries several significant risks that warrant careful consideration. Foremost among these is the company's extreme dependence on a single revenue source, Inner Mongolia Honghai Health Management Co., Ltd., which accounted for over 97% of gross revenue in fiscal year 2025. The Sales Agency Agreements with Honghai expire in June 2026, and there is "no certainty that our relationship with Honghai will continue past that date," posing a severe threat to LDDD's financial results if the relationship terminates.

Furthermore, LDDD's reliance on third-party healthcare service providers for service delivery exposes it to reputational harm and potential liability if these providers offer inferior service or engage in malpractice, as LDDD "generally do not have control over the quality of service or medical care that these third-parties provide". The dynamic and extensive control of the PRC government over business operations presents a pervasive risk. Chinese regulatory authorities could intervene or influence LDDD's operations at any time, potentially restricting its ability to conduct business or accept foreign investments, which "could cause the value of our common stock to decline and limit or prevent our efforts to finance the operations of our Chinese subsidiaries". This includes uncertainties regarding the enforcement of laws, sudden changes in regulations, and the requirement for CSRC approval for offshore listings, which could "restrict, delay or eliminate" LDDD's financing efforts abroad.

While LDDD's auditor is subject to PCAOB inspections, there remains a risk of future PRC government restrictions on information flow to auditors, which could lead to the SEC barring trading of LDDD's securities. Additionally, as of June 30, 2025, management identified material weaknesses in internal control over financial reporting, including a small accounting staff, lack of U.S. GAAP expertise, and insufficient documentation, which could lead to misstated financial results and regulatory scrutiny. The prevailing economic environment in China, leading to decreased customer health expenditures, also poses a continued challenge to revenue growth.

Conclusion

Longduoduo Company Limited presents a compelling, albeit high-risk, investment narrative centered on its specialized approach to China's preventive healthcare market. The company's core investment thesis hinges on its ability to leverage a unique portfolio of differentiated, non-invasive therapies for cardiovascular and cerebrovascular diseases, supported by a growing network of third-party providers. While the recent 42% revenue decline in fiscal year 2025 and the heavy reliance on a single agency partner highlight significant operational and concentration risks, LDDD's strategic commitment to expanding its service offerings and nationwide presence signals a clear path for future growth.

The company's technological differentiation provides a foundational competitive moat, allowing it to carve out a niche against broader digital health platforms and large public hospitals. However, sustained success will depend on its capacity to mitigate the substantial risks associated with its concentrated revenue streams, the unpredictable PRC regulatory environment, and the need to strengthen internal controls. For discerning investors, LDDD represents an opportunity to participate in China's expanding preventive health sector, provided the company can effectively execute its growth strategies while adeptly managing its unique set of operational and geopolitical challenges.