Park Ha Biological Technology Co., Ltd.

Park Ha Biological Technology Co., Ltd. is a Cayman Islands holding company that conducts its operations in China through its PRC subsidiaries, primarily focusing on developing its private skincare label, direct skincare product sales, and franchise alliances promotions [49, 52]. The "Park Ha" brand, established in 2016 with its first store launched in 2017, specializes in providing solutions for problematic skin ⁵². The company's business model is centered on a retail and franchise system, where Park Ha Jiangsu develops proprietary beauty products and offers complimentary after-sales beauty services in physical stores, while Xinzhan manages marketing, promotions, and the franchising business ⁵². Park Ha Jiangsu also serves as the research and development center, focusing on skincare products for sensitive skin and providing training to franchisee staff ⁵².

The company's core business model generates revenue primarily from product sales and franchise fees ⁵². Under the retail model, Park Ha Jiangsu supplies products to franchisees and directly operated stores, and provides training to franchisee staff ⁵³. The franchise strategy allows franchisees to determine product purchase quantities and timing, aiming to lower their inventory pressure ⁵³. Xinzhan is responsible for experiential marketing, including one-on-one after-sales service via phone or WeChat, and managing franchisees and directly-owned stores ⁵³. Park Ha Jiangsu focuses on staff training for franchise stores and collaborates with third-party training agencies ⁵³.

The company's product line, under the "Park Ha" brand, includes nearly 70 products across 10 series, covering various skincare categories from basic physical protection to anti-aging, with a focus on small molecule peptide compositions ⁵⁸. Signature products include "Little Blue Injection Serum" and freeze-dried powders ⁵⁸. All products, except for one third-party brand product, are classified as "ordinary cosmetics" and have completed NMPA record-filing before being marketed ⁵⁸. The company relies on third-party manufacturers for product production, who are required to purchase raw materials from designated suppliers and provide product formulas ⁶⁵.

For the fiscal year ended October 31, 2025, total revenue was $2,524,843 ¹. Gross profit amounted to $2,382,317 ⁴, resulting in a gross profit margin of 94% ¹⁰. Operating loss for the period was $(24,148,901) ⁷. Net loss for the fiscal year was $(24,364,753) ⁹. As of October 31, 2025, the company had cash and cash equivalents of $3,787,678 ¹². Total operating lease liabilities were $180,169 ¹⁷, with current operating lease liabilities of $104,254 ¹⁵ and non-current operating lease liabilities of $75,915 ¹⁶.

Comparing fiscal year 2025 to 2024, total revenue increased by $142,992, or 6%, from $2,381,851 to $2,524,843 [1, 18]. Product sales revenue increased by $306,803, or 43%, from $707,231 in 2024 to $1,014,034 in 2025 ¹⁹. Conversely, franchise fees revenue decreased by $163,811, or 10%, from $1,674,620 in 2024 to $1,510,809 in 2025 ²⁰. The gross profit margin for product sales to non-franchisees increased from 94% in 2024 to 96% in 2025 ¹⁰, while for franchisees, it decreased from 81% to 78% ¹⁰. The overall gross profit margin increased from 92% in 2024 to 94% in 2025 ¹⁰. The company shifted from a net income of $478,561 in 2024 to a net loss of $(24,364,753) in 2025, representing a decrease of $24,843,314 or 5,191% [9, 21].

During the fiscal year ended October 31, 2025, the company experienced several significant operational developments. It increased its number of directly-operated stores, contributing to a 51% increase in product sales revenue from non-franchisees ⁸⁹. The company also issued a total of 7,500,000 Ordinary Shares to consultants under two equity incentive plans approved in February and July 2025 ⁵⁰. In October 2025, the company's authorized share capital was increased and re-classified to a dual-class structure, introducing Class A and Class B Ordinary Shares with different voting rights ⁵⁰. The trading symbol for its ordinary shares was changed from "PHH" to "BYAH" effective October 28, 2025 ⁵¹. Furthermore, in December 2025, shareholders approved another increase in authorized share capital and a 1-for-250 reverse stock split to regain compliance with Nasdaq's minimum bid price requirement, which became effective on February 20, 2026 ⁵¹. The company also closed a follow-on public offering in January 2026, raising gross proceeds of US$2.45 million for the expansion of directly operated stores in China ⁵¹.

Park Ha Biological Technology Co., Ltd. intends to continually enhance its services and cross-sell new services to existing customers, while also acquiring new customers by increasing market penetration with deeper market coverage and broader geographical reach ⁸⁶. The company plans to expand its marketing and sales team with a focus on increasing sales in targeted geographies and customer segments, which is expected to play a pivotal role in driving growth in both sales revenue and franchise fee revenue ⁸⁶.

A major growth area for the company is strengthening the development of its own products. This involves expanding partnerships with scientific research institutions to develop new skincare raw materials and products ⁵⁶. The company plans to make significant investments in R&D to improve and expand its product and service offerings, with a specific focus on developing small molecule peptide hydration penetration technology and other solutions for skin moisture loss ⁵⁶. Additionally, the company collaborates with third-party professional institutions to explore the application and market potential of plant exosomes in beauty and anti-aging ⁵⁵.

Another key growth vector is intensifying training practices. The company plans to open vocational training schools in inland China and western provinces, such as Guizhou Province and Ningxia Province, to provide professional training to franchisee staff ⁵⁶. An internal training institute on beauty treatment will also be established to advance existing talents at the headquarters, and a complete on-the-job training system will be set up in partnership with vocational and technical colleges to help students obtain professional beautician qualification certificates ⁵⁶.

The company aims to enhance its social media-based sales and marketing capabilities by continuing to use platforms like Douyin, RED, and WeChat video to promote its brand and attract potential customers and franchisees ⁵⁶. This digital strategy includes launching VR product trials, live online sales, and social app advertising to engage with customers and provide instant, customized content ⁵⁵.

To support its rapidly growing customer demand, Park Ha Jiangsu has partnered with additional third-party manufacturers to increase production and shorten wait times ⁵⁷. The company also plans to establish partnerships with third-party warehouse and distribution centers to improve supply chain capacity ⁵⁷.

The company plans to evaluate and selectively seek strategic alliances, investment, and acquisition opportunities within the beauty industry across China ⁵⁷. This includes investing in incubating product patents and acquiring supply chain partners and manufacturers, with the long-term goal of lowering production costs and increasing future profit margins ⁵⁷.

The company faces material risks stemming from its operations in the PRC, including potential government interventions or restrictions on cash and asset transfers out of China or Hong Kong, and uncertainties within the rapidly evolving PRC legal system, which could lead to material changes in operations or a decline in securities value ⁵. Regulatory oversight by the Cyberspace Administration of China (CAC) on data security, particularly for companies seeking foreign listings, could adversely impact the business, despite the company not currently being subject to cybersecurity review for possessing personal information of more than one million users [1, 12]. The Holding Foreign Companies Accountable Act (HFCAA) poses a delisting risk if the PCAOB is unable to inspect the company's auditor for two consecutive years, potentially affecting the market price of its Ordinary Shares ⁵. The company relies on dividends from its PRC subsidiaries, which are subject to PRC regulations on profit distribution and foreign exchange controls, potentially limiting its ability to fund operations or pay dividends ⁵. Operational risks include intense competition in the beauty industry, dependence on the continued popularity and safety of its products, and the ability to anticipate and respond to changing consumer preferences ⁶. The franchise business model, while critical for growth, carries risks such as potential liability from franchisee actions, disputes, and the need for sufficient incentives to attract and retain franchisees ⁶. The company also faces concentration risks with a limited number of suppliers, with two suppliers accounting for approximately 26% and 11% of total purchases in fiscal year 2025 ³⁷, and a significant portion of revenue derived from a few major customers, with the top five customers accounting for 25% of revenue in fiscal year 2025 ³⁷. Non-payments or delayed payments from customers, particularly franchisees, pose a risk, as evidenced by an increase in allowance for loans receivables from franchisees from $55,520 in 2024 to $232,876 in 2025 due to financial difficulties ³⁸. Furthermore, the company does not own the formulas for its products, relying on third-party manufacturers, which could lead to competitive disadvantages if these manufacturers supply similar products to competitors at lower prices ⁶⁵.

Management emphasizes a commitment to continuous growth through strategic initiatives, including enhancing existing services, cross-selling new offerings, and expanding market penetration through deeper coverage and broader geographical reach ⁸⁶. A key strategic priority is strengthening the development of proprietary products, supported by increased R&D investments and partnerships with scientific research institutions, with a specific focus on small molecule peptide hydration penetration technology and plant exosomes for beauty and anti-aging [56, 55]. Management also prioritizes intensifying training practices by establishing vocational training schools in inland and western China and an internal training institute to professionalize franchisee staff and advance existing talent ⁵⁶. Enhancing social media-based sales and marketing capabilities through platforms like Douyin, RED, and WeChat video, including VR product trials and live online sales, is another core strategic focus to boost brand awareness and attract customers and franchisees [56, 55]. Finally, management aims to improve supply chain capacity by partnering with additional third-party manufacturers and establishing relationships with third-party warehouse and distribution centers to meet growing demand ⁵⁷. The company's management believes that cash generated from operations will be sufficient to meet normal working capital needs and debt obligations for at least the next 12 months ⁹⁵.