Company Summary - Hong Yuan Holding Group

Business Focus

Hong Yuan Holding Group primarily specializes in supply chain management services and the wholesale and internet sales of fast-moving consumer goods (FMCG). Their product offerings span multiple categories including:

• Food products (pre-packaged food, agricultural by-products)
• Daily necessities
• Electronic products
• Beverages (including Baijiu, red wine brands, tea, and popular beverages)
• Cigarettes
• Local specialties
• Mid-to-high-end gifts (notably luxury cosmetics such as Chanel, Lancome, La Mer, SK-II)

Business Operations

• The Company operates offline stores that develop their own branded products (registered in March 2025) and partners with well-known liquor manufacturers for contract manufacturing.
• Current stores are operative in Chongqing and Jiangyou, with the Leshan store in development.
• The business model shifted in June 2025, where the Company no longer holds shares in the stores but funds their opening as loans, recovering investment from store profits.
• The Company provides funds to service regional partners responsible for sourcing store partners and members, and develops customer loyalty through dividends, quality, price, and after-sales commitments.

Supply Chain and Market Strategy

• The Company helps optimize procurement, logistics, storage, sales, and shipping by utilizing technology such as AI, IoT, blockchain, and robots.
• It collaborates with first- and second-tier brand manufacturers, and directly procures from third-tier brands, reducing costs and creating a stable profit foundation.
• Active in developing private label products through OEM partnerships with high-quality manufacturers.

Market Context

• Operates in a highly competitive alcohol and FMCG market facing channel transformation, price system pressures, and industry shift toward consolidation.
• Recognizes ongoing trends like the “volume reduction and price increase” in the liquor industry, with leading brands monopolizing market share.
• The Company is transitioning from traditional retail to a more integrated supply chain and O2O (online-to-offline) model.

Financials

• The Company has 10 employees (1 executive, 2 in finance, 7 in operations, sales, and marketing).
• Revenue for the year ended December 31, 2024, was $245,572 (compared to nil in 2023).
• Operating expenses in 2024 amounted to $189,198; net loss was $96,437 (improved from a loss of $154,464 in 2023).
• The Company had $46,291 in cash as of December 31, 2024, up from $5,983 in 2023.
• The Company's operations are primarily funded by its majority shareholder, who provided loans and capital contributions.
• The Company has an accumulated deficit of $97,784,280 and a net working capital deficit of $243,326, raising concerns about sustainability as a going concern.

Ownership & Staff

• The majority shareholder, Xudong Li, owns 67% of common stock (50 million shares) and 100% of Series A-1 Preferred Stock (5 million shares).
• Zhang Haosong is a director.
• The Company does not currently operate a formal audit or compensation committee; the full Board handles those functions.

Legal and Corporate Structure

• The Company’s legal structure includes controlled subsidiaries and entities in China, with past reorganizations and control via common control under corporate agreements.
• It is listed on OTC Pink Sheets under the symbol "HGYN."
• No legal proceedings or mine safety disclosures apply.

Note: The Company emphasizes that all efforts are focused on establishing a sustainable business, but it is still in development and incurs ongoing losses.