Executive Summary / Key Takeaways

• Longduoduo Company Limited (LDDD) operates as a Nevada holding company, with its core business in China's preventive healthcare sector, primarily through commissioned sales of specialized health maintenance services.
• The company's revenue model has significantly shifted, with over 97% of its gross revenue in fiscal year 2025 derived from a single agency relationship with Inner Mongolia Honghai Health Management Co., Ltd., presenting a substantial concentration risk as the agreement expires in June 2026.
• LDDD differentiates itself through specialized therapeutic approaches for cardiovascular and cerebrovascular diseases, aiming to leverage a growing network and customer base to expand its service offerings and market presence in China.
• Recent financial performance shows a significant 42% decline in total revenue and a 64% drop in net income attributable to common stockholders in fiscal year 2025, primarily due to a post-pandemic surge in the prior year and a challenging economic environment impacting customer health expenditures.
• Significant operational and regulatory risks, including heavy reliance on third-party providers, extensive PRC government oversight, and material weaknesses in internal controls, pose considerable challenges to LDDD's growth and its ability to raise capital through a U.S. listing.

A Deep Dive into China's Preventive Healthcare Landscape

Longduoduo Company Limited (LDDD) is strategically positioned within China's burgeoning preventive healthcare market, a sector increasingly vital as the nation's population ages and health consciousness grows. Operating through a Nevada-based holding structure, LDDD's entire business is conducted via its seven subsidiaries in the People's Republic of China (PRC). The company's foundational strategy centers on offering comprehensive preventive healthcare solutions, with a particular focus on mitigating the risks of myocardial infarction, cerebral infarction, hemiplegia, and other cardiovascular and cerebrovascular diseases. This approach addresses a critical health need in China, where these conditions represent significant public health challenges.

LDDD's journey in the healthcare sector began with a focus on principal sales, purchasing and reselling services and products from third-party healthcare providers across Inner Mongolia. However, a pivotal strategic shift occurred in June 2023, when the company transitioned primarily to a commissioned sales model. This involved entering into Sales Agency Agreements with Inner Mongolia Honghai Health Management Co., Ltd. (Honghai), where LDDD's subsidiaries act as sales agents for Honghai's health maintenance services. This strategic pivot rapidly transformed LDDD's revenue composition, with commissioned sales accounting for over 97% of its gross revenue by the fiscal year ended June 30, 2025. This move allowed LDDD to scale its offerings without the direct operational burden and capital expenditure associated with being a principal provider, though it introduced new dependencies.

The broader industry landscape in China is highly competitive, characterized by the presence of medical examination departments within major public hospitals and a diverse array of private medical examination companies. These private entities range from large national franchises to regional providers and numerous local independent centers. LDDD aims to carve out its niche by emphasizing strong sales and marketing, an innovative approach to the healthcare market, and a flexible management mechanism. However, it faces formidable competitors, some with longer operating histories, greater brand recognition, more extensive geographical coverage, and superior financial and technical resources. Notably, many government-owned hospitals benefit from income tax exemptions on medical income, providing them with a significant competitive advantage over private entities like LDDD.

Specialized Therapeutic Approaches: LDDD's Differentiated Edge

LDDD's core differentiation lies not in proprietary hardware or software technology, but in its specialized therapeutic approaches and comprehensive preventive healthcare solutions offered through its network of third-party providers. These include a range of treatments aimed at preventing and managing cardiovascular and cerebrovascular diseases. Specific services marketed through its agency relationship with Honghai encompass trioxygen autotransfusion, awakening brain and dredging collaterals, double blood purification in German technology, hyperbaric trioxygen, colon hydrotherapy, intestinal flora transplantation, and custom-made Juncao.

Beyond these, LDDD's principal sales model, though currently a smaller revenue contributor, offers treatments such as Meridian-regulating and Consciousness-restoring Iatrotechnics (a traditional Chinese medicine treatment for anti-thrombotic effects), Double Blood Purification (for removing pathogens and toxins from blood), Immunological Ozonated Autohemotherapy (using ozone therapy for blood purification), PRP (platelet-rich plasma for joint issues), Relaxation therapy, Vegetative Nerve Regulation, and Microwave Therapy (for inflammation and pain relief). The tangible benefits of these specialized services, as described, are their targeted efficacy in disease prevention and treatment, particularly for complex conditions like cardiovascular and cerebrovascular ailments. While specific quantitative performance metrics (e.g., "X% improvement in patient outcomes" or "Y% reduction in disease recurrence") for these treatments are not detailed, their strategic intent is to offer advanced, high-quality solutions that address specific health needs.

For investors, this specialization represents a potential competitive moat. By focusing on niche, high-value preventive treatments, LDDD can attract a dedicated customer base seeking alternatives or complements to conventional medical care. This focus could support premium pricing and foster customer loyalty, contributing to more stable revenue streams in its targeted segments. However, the absence of explicit R&D initiatives with quantifiable targets or new technological developments beyond Honghai's service expansion suggests that LDDD's innovation strategy is currently centered on leveraging and distributing existing specialized treatments rather than developing new proprietary technologies. This approach positions LDDD as a service aggregator and distributor of specialized care, rather than a technology innovator in the traditional sense.

Financial Performance and Liquidity: A Mixed Picture

LDDD's financial performance for the fiscal year ended June 30, 2025, reflects a period of significant adjustment and external headwinds. Total revenue declined by 42% to $4.26 million, down from $7.39 million in the prior fiscal year. This decrease is primarily attributed to two factors: a temporary surge in revenue during fiscal year 2024 as Inner Mongolia emerged from the pandemic, leading to a backlog of services being delivered, and a more recent impact from the challenging economic environment, which has curtailed customer health expenditures.

The shift to commissioned sales has dramatically altered the revenue mix. In fiscal year 2025, $4.14 million of the total revenue was generated from commissions, underscoring the company's heavy reliance on its agency relationship with Honghai. Conversely, service revenue from principal sales, the company's historical focus, plummeted by almost 63% in the same period to $120,866. This indicates a successful, albeit concentrated, pivot in business model.

Profitability metrics also saw a notable decline. Income from operations decreased by 73% to $552,679 in fiscal year 2025, compared to $2.03 million in fiscal year 2024. This reduction was primarily driven by significant marketing expenses incurred to establish the company's brand in its new operational phase. Net income attributable to common stockholders followed a similar trend, falling 64% to $460,435, or $0.01 per share, from $1.26 million in the previous year. Despite these declines, the company's TTM gross profit margin remains robust at 97.86%, largely due to the high-margin nature of commission revenue which has no associated cost of revenue. The operating profit margin stands at 12.97%, and the net profit margin at 10.80%.

From a liquidity perspective, LDDD reported $1.64 million in cash and cash equivalents and a working capital of $983,123 as of June 30, 2025. While the company received $335,484 in deferred revenue from customer prepayments, a significant portion was utilized for ongoing expenses, leaving $133,610 in prepayments on the balance sheet. Net cash provided by operating activities decreased to $277,365 in fiscal year 2025 from $582,282 in the prior year. Free cash flow for the trailing twelve months was $217,990. Management acknowledges the need to achieve a better balance of customer deposits and prepayments, which is contingent on improved operational profits and successful financing efforts. The company anticipates future liquidity requirements will stem from funding growth and capital expenditures, with primary funding sources expected from operations, public offerings, and debt financing. The majority shareholder, Zhang Liang, is expected to provide support if necessary.

Strategic Outlook and Critical Risks

LDDD's long-term strategy is ambitious: to expand its service offerings, achieve nationwide network coverage, and elevate service standards, ultimately aiming to become a leading health management service provider and sales agency in China. This plan leverages its existing network of medical centers, customer base, and demographic/disease information database. Management believes that recent government policies to promote economic recovery will eventually improve the operating environment, though they anticipate this will take time. The company intends to continue investing heavily in advertising and promotion to establish and expand its brand.

However, the investment thesis for LDDD is tempered by several critical risks. The most immediate concern is the overwhelming dependence on Inner Mongolia Honghai Health Management Co., Ltd. for over 97% of its gross revenue. The Sales Agency Agreements with Honghai are set to expire in June 2026, and there is no guarantee of their renewal, which could severely impact LDDD's financial results. Furthermore, LDDD's reliance on third-party healthcare service providers exposes it to potential liability and reputational harm if these providers deliver substandard care or engage in malpractice, as LDDD generally lacks direct control over their service quality.

The extensive oversight and control exerted by the PRC government over businesses operating in China represent a pervasive risk. Agencies such as the China Securities Regulatory Commission (CSRC), State Administration of Foreign Exchange (SAFE), Cyberspace Administration of China (CAC), and the Ministry of Commerce (MOFCOM) possess broad authority that could significantly interfere with LDDD's operations and its ability to act in the best interests of its shareholders. This includes the requirement for CSRC approval for any U.S. stock exchange listing, which, if denied, would severely limit LDDD's ability to raise capital and fund its growth initiatives. While LDDD believes it is not subject to CAC's cybersecurity review, the evolving regulatory landscape in China introduces uncertainty.

Internally, LDDD faces material weaknesses in its internal control over financial reporting, identified as of June 30, 2025. These include a small accounting staff hindering segregation of duties, a lack of U.S. Generally Accepted Accounting Principles (GAAP) expertise within the financial team, the Chief Financial Officer's unfamiliarity with U.S. public company reporting requirements, and insufficient documentation of financial processes. While management does not believe the current operational scale warrants immediate remediation, these weaknesses could lead to financial misstatements or regulatory scrutiny, impacting investor confidence. The potential expansion of government-sponsored social medical insurance to cover medical examinations also poses a risk; if LDDD's partner institutions are not qualified for such coverage, it could lead to customer attrition.

Conclusion

Longduoduo Company Limited presents a compelling, albeit high-risk, investment opportunity within China's specialized preventive healthcare market. Its strategic pivot to a commission-based model has streamlined operations and yielded high gross margins, focusing on critical health needs like cardiovascular and cerebrovascular disease prevention. The company's differentiated approach, centered on a network of specialized therapeutic services, positions it uniquely against broader digital health platforms like Ping An Good Doctor (1833.HK), Alibaba Health (241.HK), and JD Health (6618.HK), which often prioritize scale and digital accessibility. LDDD's strength lies in its niche expertise and ability to foster customer loyalty in targeted segments, potentially allowing for premium service pricing and stable cash flow generation from its service contracts.

However, the company's financial trajectory in fiscal year 2025 highlights the vulnerabilities inherent in its concentrated revenue streams and sensitivity to the broader economic environment. The looming expiration of its primary agency agreement, coupled with the pervasive and unpredictable nature of PRC government oversight and identified internal control weaknesses, underscore the significant challenges ahead. For LDDD to realize its ambitious growth plans of expanding service offerings and achieving nationwide coverage, it must effectively manage these risks, secure its key partnerships, and navigate the complex regulatory landscape. Investors considering LDDD must weigh the potential for growth in a vital healthcare sector against the substantial operational, financial, and geopolitical uncertainties that define its current investment profile.