20-F: WINS Finance Holdings Inc. Reports Fiscal Year 2024 Results, Focuses on Medical Equipment Sales

WINS Finance Holdings Inc. files its 20-F for the fiscal year ended June 30, 2024, highlighting a shift towards medical equipment sales and away from financial leasing.

Summary

• WINS Finance Holdings Inc. has filed its Form 20-F for the fiscal year ended June 30, 2024.
• The company is transitioning its business focus to medical equipment sales, aiming for higher profit margins compared to its previous financial leasing business.
• Net revenue increased by $3.2 million, or 603%, to $3.7 million for the year ended June 30, 2024, compared to $0.5 million for the year ended June 30, 2023, mainly due to the acquisition of Shiyuegongtu.
• The revenue of Shiyuegongtu was $1.9 million.
• The company incurred a net loss of $753,040 for the year ended June 30, 2024.
• The company plans to establish regional cancer diagnosis and treatment centers in China.
• The company is selling PET-CT products, crema ultrasound, B-ultrasound, orthopedic consumables and other products.
• The company is subject to risks related to the Chinese economy, regulations, and potential government intervention.
• The company is also subject to the Holding Foreign Companies Accountable Act (HFCAA) which could impact its ability to trade in the U.S.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While revenue increased significantly, the company still incurred a net loss and faces several risks. The shift to a new business line is a positive development, but its success is not guaranteed.

Positives

• The company is transitioning to a new business line with higher profit potential.
• Net revenue increased significantly due to the acquisition of Shiyuegongtu.
• The company is expanding into cancer diagnosis and treatment centers.
• The company has established a sales agent system covering the whole country.

Negatives

• The company incurred a net loss of $753,040 for the year ended June 30, 2024.
• The company is subject to the Holding Foreign Companies Accountable Act (HFCAA) which could impact its ability to trade in the U.S.

Risks

• The company faces risks related to the Chinese economy, regulations, and potential government intervention.
• The company is transitioning its business to medical equipment, a business with which it does not have any experience historically.
• The company is subject to the Holding Foreign Companies Accountable Act (HFCAA) which could impact its ability to trade in the U.S.
• The company may face difficulties in protecting shareholder interests and exercising rights due to conducting operations in China and executive officers residing outside the U.S.

Future Outlook

Wins plans to further develop its medical business and improve its revenues and profit margin over the next 5-10 years, while continuing to provide financing services for listed companies and large state-owned enterprises.

Industry Context

The company is shifting its focus to the medical equipment sales industry, which has maintained strong growth in China despite the global economic recession.

Legal Proceedings

• The Company is involved in various legal actions arising in the ordinary course of its business.
• As of June 30, 2024, the Company was involved in 1 lawsuits in China, which the Company is a defendant in relation to its financing lease business.
• On October 31, 2014, King & Wood Mallesons filed a complaint in Xicheng District Peoples Court of Beijing on behalf of its client for breach of contract against Jinshang Leasing, our subsidiary.
• As of June 30, 2018, the Company and certain of its executive officers have been named as defendants in one civil securities lawsuit filed in U.S. District Courts.
• On July 24, 2020, Samuel Kamau filed a shareholder class action complaint in the District Court for the Central District of California seeking unspecified monetary damages for alleged violations of the United States Securities Exchange Act of 1934 during the period from October 31, 2018 to July 6, 2020 against Wins Finance Holdings Inc., Renhui Mu, and Junfeng Zhao.

Stakeholder Impact

• Shareholders may experience difficulties in effecting service of legal process and enforcing judgments against the company, its directors, or senior management.
• The company's ability to pay upstream dividends may be restricted due to foreign exchange controls and other Chinese regulations.
• Additional financing may result in dilution to shareholders.
• Future resales of the company's ordinary shares may cause the market price of its securities to drop significantly.

Next Steps

• The company plans to continue to acquire private medical groups, medical equipment and consumables manufacturers.
• The company plans to increase the sales of medical equipment and consumables.
• The company plans to continue to do financial business and provide financing services for listed companies and large state-owned enterprises.

Key Dates