Executive Summary / Key Takeaways

• Longduoduo Company Limited ($LDDD) operates as a Nevada holding company with a network of seven subsidiaries in the People's Republic of China, primarily focused on preventive healthcare solutions for cardiovascular and cerebrovascular diseases. The company has strategically shifted its revenue model, with commissioned sales now accounting for over 97% of its gross revenue.
• The Chinese preventive healthcare market is experiencing significant growth, projected to reach US$53,877.1 million by 2031 with an 11.3% CAGR from 2025-2031, driven by an aging population, rising chronic disease rates, and government initiatives like 'Healthy China 2030'. The AI in healthcare market in China is also expanding rapidly, with projections of reaching US$18,883.6 million by 2030 at a 42.5% CAGR from 2024-2030, presenting both opportunities and competitive pressures.
• For the fiscal year ended June 30, 2025, LDDD reported total revenue of $4.26 million, a 42% decrease year-over-year, primarily due to a post-pandemic surge in the prior year and reduced customer health expenditures in the current economic environment. Despite this, the company maintained a strong gross profit margin of 97.86% (TTM) but saw operating income decline to $552,679 from $2.03 million.
• LDDD's competitive advantages lie in its specialized preventive therapies and flexible management, but it faces intense competition from larger public hospitals and private medical examination companies with greater resources and brand recognition. The company's reliance on a single major client for over 97% of its revenue presents a significant risk.
• Significant regulatory and governance risks persist, including potential PRC government intervention in operations and capital raising, evolving data security laws, and identified material weaknesses in internal controls over financial reporting. These factors could impact the company's ability to fund growth and affect investor confidence.

A Niche Player in China's Expanding Preventive Healthcare Market

Longduoduo Company Limited ($LDDD) operates as a Nevada-based holding company, with its entire business conducted through a network of seven subsidiaries in the People's Republic of China. The company's core mission revolves around providing comprehensive preventive healthcare solutions, with a specialized focus on mitigating the risks of myocardial infarction, cerebral infarction, hemiplegia, and broader cardiovascular and cerebrovascular diseases. This strategic emphasis positions LDDD within China's rapidly expanding preventive healthcare market, which was valued at US$25,464.7 million in 2024 and is projected to reach US$53,877.1 million by 2031, growing at a significant compound annual growth rate (CAGR) of 11.3% from 2025-2031.

The broader Chinese healthcare landscape is characterized by an aging population, rising chronic disease rates, and increasing health consciousness among consumers, all of which are powerful tailwinds for preventive care. Government initiatives, such as the 'Healthy China 2030' plan, further underscore the national commitment to promoting preventive health and fostering digitalization within the sector. This environment creates substantial opportunities for companies like LDDD that can offer targeted and effective health management services.

LDDD's business model has undergone a notable evolution. Historically, its operating subsidiaries functioned as principals, purchasing and reselling healthcare services and products from third-party providers. However, a significant strategic pivot occurred around June 2023, shifting the primary revenue generation to commissioned sales. The company now largely acts as a sales agent for health maintenance services provided by Inner Mongolia Honghai Health Management Co., Ltd. This agency relationship has rapidly become the dominant revenue stream, accounting for over 97% of LDDD's gross revenue for the fiscal year ended June 30, 2025. This shift highlights a strategic move to leverage partnerships for market reach and service delivery, while reducing direct operational overhead associated with principal sales.

Technological Edge in Specialized Preventive Therapies

Longduoduo differentiates itself through a suite of specialized preventive healthcare solutions, which form the bedrock of its service offerings. These include Meridian-regulating and Consciousness-restoring Iatrotechnics, a traditional Chinese medicine treatment designed to be anti-thrombotic and prevent/treat cardiovascular and cerebrovascular diseases. The company also offers Double Blood Purification, a treatment that physically removes pathogens and toxins from the blood, and Immunological Ozonated Autohemotherapy, which utilizes an ozone therapy device for similar detoxification purposes.

Further specialized treatments include PRP (platelet-rich plasma) for joint inflammation and injury, Relaxation therapy for soft tissue adhesion, Vegetative Nerve Regulation for pain management, and Microwave Therapy to reduce inflammation and improve blood circulation. These therapies provide tangible benefits by targeting specific physiological mechanisms related to chronic and degenerative conditions, aiming for early detection, prevention, and mitigation of serious health issues. While specific quantifiable performance metrics for these technologies are not publicly detailed, their strategic intent is to offer effective, specialized care that addresses critical health concerns in China.

The company's plan for growth includes further expanding its product offerings and network coverage nationwide, alongside upgrading service standards to enhance customer experience. This strategy implicitly involves continuous development and refinement of its specialized therapies, or the integration of new, complementary services. The "so what" for investors is that LDDD's focus on these differentiated, therapy-driven solutions could create a competitive moat, fostering customer loyalty and potentially enabling stronger margins in niche segments of the preventive healthcare market. This specialized approach allows LDDD to carve out a distinct position, particularly against more generalized healthcare providers.

Financial Performance: A Year of Transition and Economic Headwinds

Longduoduo's financial performance for the fiscal year ended June 30, 2025, reflects a period of significant transition and external economic pressures. Total revenue for the year was $4.26 million, marking a 42% decrease from $7.39 million in the prior fiscal year. This decline is primarily attributed to two factors: a surge in revenue during fiscal year 2024 as Inner Mongolia emerged from the pandemic, which saw a large number of customers receiving previously paid-for services, and a subsequent decrease in customer health expenditures in fiscal year 2025 due to the prevailing economic environment. Management acknowledges that while government policies aim to promote economic recovery, a true improvement may take time.

The shift to a commissioned sales model is evident in the revenue breakdown. Commission revenue, primarily from the agency relationship with Honghai, constituted $4.14 million of the total revenue in fiscal year 2025, representing over 97% of gross revenue. In contrast, service revenue from principal sales fell by almost 63% to $120,866 in fiscal year 2025 from $327,599 in fiscal year 2024.

Despite the revenue contraction, the company maintained a robust gross profit of $4.17 million for the year ended June 30, 2025. The gross margin from service revenue, however, decreased to 25% ($29,767) in fiscal year 2025 from 47% ($154,250) in fiscal year 2024. The company's overall gross profit margin (TTM) stands at an impressive 97.86%. However, income from operations significantly declined to $552,679 in fiscal year 2025 from $2.03 million in fiscal year 2024. This was largely due to substantial marketing expenses incurred to establish the company's brand, with $1.94 million in advertising and promotion expenses in fiscal year 2025, down from $3.34 million in fiscal year 2024. Management intends to continue heavy investment in advertising and promotion to expand its brand and service offerings. Net income for the year was $492,260, a decrease from $1.36 million in the prior year.

Liquidity and Capital Resources

As of June 30, 2025, Longduoduo reported $1.64 million in cash and cash equivalents and a working capital of $983,123. The working capital position is influenced by $335,484 in deferred revenue from customer prepayments, with the majority of these funds used for ongoing expenses, leaving $133,610 in prepayments on the balance sheet. The company aims to achieve a better balance between customer deposits and prepayments as profits and financing become adequate for expansion.

Net cash provided by operating activities for fiscal year 2025 was $277,365, a decrease from $582,282 in fiscal year 2024. Future liquidity requirements are expected to stem from funding growth, current obligations, and capital expenditures. The company anticipates relying on cash generated from operations, public offerings, and debt financing, with potential support from its majority shareholder, Zhang Liang. LDDD has not paid cash dividends and intends to retain all future earnings for business operations and expansion.

Competitive Landscape and Strategic Positioning

Longduoduo operates in a highly competitive Chinese preventive healthcare market, facing two primary types of rivals: the medical examination departments of major public hospitals and private medical examination companies. The private market itself is fragmented, including large national franchises, regional providers, and numerous local independent centers.

Against this backdrop, LDDD positions itself with perceived competitive advantages in strong sales and marketing efforts, an innovative approach to the healthcare market, and a flexible management mechanism. Its specialized preventive therapies, such as Meridian-regulating and Double Blood Purification, offer a unique value proposition, potentially leading to greater depth in personalized care compared to broader digital platforms. This therapeutic specialization could foster stronger customer loyalty and enable LDDD to compete effectively in high-value niche segments, potentially enhancing pricing power in targeted markets.

However, LDDD also contends with significant competitive disadvantages. Many rivals, particularly government-owned hospitals, benefit from income tax exemptions on medical income, providing a substantial cost advantage. Larger competitors often possess longer operating histories, greater brand recognition, superior supplier relationships, larger customer bases, and more extensive financial, technical, or marketing resources. LDDD also acknowledges a lack of equipment for certain highly technical medical tests.

When comparing LDDD to major digital healthcare platforms like Ping An Good Doctor (PINGY), WeDoctor, Alibaba Health (ALHBY), and JD Health (JDHYY), LDDD's focused, therapy-driven model contrasts with their broader, more scalable digital ecosystems. While LDDD's specialized treatments could offer superior efficacy in specific preventive care areas, these larger platforms often excel in market positioning through extensive user networks, integrated services, and efficient logistics. For instance, Ping An Good Doctor's broad digital network and integration with financial services may offer greater accessibility, potentially outpacing LDDD in market reach. Alibaba Health and JD Health leverage e-commerce and supply chain efficiencies, which could challenge LDDD on pricing and speed of service delivery. LDDD's reliance on third-party providers for service delivery also introduces a vulnerability regarding quality control and potential reputational harm if these partners underperform.

The broader industry trend towards AI in healthcare, with China's AI healthcare market projected to grow significantly, presents both opportunities and challenges. While AI could enable advanced diagnostics for LDDD, larger competitors with robust technology infrastructures may integrate these innovations faster, potentially impacting LDDD's cost structures and profitability if it cannot keep pace.

Outlook and Strategic Initiatives

Longduoduo's long-term strategy is centered on expanding its service offerings, achieving nationwide network coverage, and upgrading service standards to enhance customer experience. This involves building upon its current agency sales foundation and eventually re-emphasizing principal sales to offer a broader array of products and services through an expanded network of third-party providers. The company plans to continue investing heavily in advertising and promotion to establish and expand its brand.

The successful execution of this strategy hinges on several factors, including the ability to maintain brand recognition, effectively compete, manage growth, provide superior customer experience, manage supplier relationships, and retain qualified personnel. The company's outlook is also tied to the broader economic recovery in China and potential changes in government-sponsored social medical insurance, which could impact customer demand if LDDD does not become a qualified institution for such coverage.

Key Risks and Challenges

Investing in Longduoduo carries several significant risks, particularly given its operational structure and the regulatory environment in China. As a Nevada holding company, LDDD is entirely dependent on distributions from its PRC subsidiaries, which Chinese regulatory authorities could restrict, potentially causing the value of its securities to decline. The evolving PRC legal system, including uncertainties in law enforcement and sudden regulatory changes, poses a continuous threat to operations and legal protections.

The company faces substantial concentration risk, with over 97% of its fiscal year 2025 revenue derived from a single source, Inner Mongolia Honghai Health Management Co., Ltd. The Sales Agency Agreements with Honghai expire in June 2026, and there is no certainty of renewal, which could severely impact financial results. Furthermore, LDDD's reliance on third-party healthcare providers means it has limited control over service quality and could face reputational harm or liability from unsatisfactory performance.

Regulatory hurdles for capital raising are also prominent. The China Securities Regulatory Commission (CSRC) requires extensive applications and approval for offshore securities listings, with broad discretion to limit financing activities deemed to risk Chinese interests. This could restrict LDDD's ability to raise capital in the U.S. and fund its growth. Additionally, evolving cybersecurity and data protection regulations in China, particularly for companies holding significant user data, could subject LDDD to cybersecurity reviews and potential penalties, despite its current belief that it is not subject to such regulations.

Finally, LDDD's management identified material weaknesses in its internal controls over financial reporting as of June 30, 2025. These include insufficient segregation of duties, a lack of U.S. GAAP expertise among internal financial staff, and inadequate documentation of financial processes. Management currently does not believe the level of operations warrants remediation of these weaknesses, which could lead to materially misstated financial results or regulatory scrutiny.

Conclusion

Longduoduo Company Limited presents an intriguing investment proposition rooted in China's growing preventive healthcare market, driven by an aging population and increasing health awareness. The company's strategic pivot to a commissioned sales model has solidified its revenue base, albeit with significant concentration risk. Its portfolio of specialized preventive therapies offers a distinct competitive edge, providing targeted solutions for cardiovascular and cerebrovascular diseases.

However, the investment thesis is tempered by substantial operational and regulatory challenges. The heavy reliance on a single partner for revenue, coupled with the inherent complexities and uncertainties of operating under evolving PRC government oversight and capital controls, introduces considerable risk. While LDDD aims to expand its offerings and network, its ability to execute these strategies and compete effectively against larger, better-resourced rivals will be critical. Investors must carefully weigh the potential for growth in a high-demand sector against the company's concentrated revenue, internal control weaknesses, and the unpredictable nature of the Chinese regulatory environment. The long-term success of LDDD will depend on its ability to diversify its revenue streams, strengthen its internal governance, and effectively leverage its specialized technological offerings to capture market share amidst intense competition.