Park Ha Biological Technology Co., Ltd.

What they do

Park Ha operates a franchise-based business selling cosmetics and personal care products in China. The company generates revenue primarily through franchise fees and product sales to its franchise network. It is incorporated in the Cayman Islands and conducts its main operations through variable interest entities (VIEs) in China.

Revenue drivers

• Franchise fees — The company generates revenue from fees charged to franchisees; disclosed in the amendment to provide additional disclosure on franchise fees.
• Product sales to franchisees — Revenue from selling cosmetics and personal care products to its franchise network; overall annual revenue was $2.5M in 2025.
• Other product sales — Likely includes direct sales or sales through non-franchise channels, though specific breakdowns are not provided in the excerpts.

Recent performance

For fiscal year 2025 (ended October 31, 2025), annual revenue was $2.5 million, roughly flat versus $2.4 million in 2024 and $2.5 million in 2023. Net income swung to a loss of $24.4 million in 2025, compared to a profit of $478,561 in 2024 and $852,042 in 2023. Diluted EPS was -$41.38 in 2025. Operating cash flow remained positive but fell sharply to $85,852 in 2025 from $960,470 in 2024. As of October 31, 2025, the company held $3.8 million in cash and equivalents, with total assets of $6.0 million and shareholder equity of $4.0 million.

Strategy

The company is focused on expanding its franchise network in China's cosmetics market. The amendment to the 20-F was filed to respond to SEC comments, indicating a priority on improving disclosure transparency around VIE agreements, franchise fees, share-based compensation, and credit losses. No explicit strategic initiatives are detailed in the provided excerpts beyond maintaining its franchise-based business model.

Risks

• Key person dependence — The company's operations rely heavily on CEO Xiaoqiu Zhang; loss of her services could disrupt business.
• VIE structure risk — The company operates through VIE agreements in China; changes in PRC regulations or enforcement could affect control and financial consolidation.
• Franchisee credit risk — The company may face credit losses from franchisees, as disclosed in the amended filing; a default could impact revenue and cash flow.
• Share-based compensation expense — The 2025 net loss of $24.4 million may include significant share-based compensation; such expenses could recur and pressure future profitability.

Outlook

Management did not provide quantitative forward guidance in the excerpts. The company's outlook appears focused on regulatory compliance and enhancing disclosure quality in response to SEC comments. The sustainability of revenue growth will depend on franchise network expansion and managing credit losses.