AiXin Life International, Inc. (AIXN)
AiXin Life International, Inc. is a Colorado holding company whose PRC subsidiaries develop, manufacture and sell health and wellness products via four segments: direct sales, company-owned pharmacies, hotel operations and its Yunnan Runcangsheng manufacturing facility. After acquiring nine Cheng...
A Deep Dive into AiXin Life Internationals FY 2024 10-K
In this comprehensive review, we break down the most important elements of AiXin Life International, Inc.s 2024 Annual Report on Form 10-K. From its origins as a Colorado holding company to its evolving portfolio of health and wellness brands in China, we explore the business model, segment performance, financial results and looming risks. At the end of this post, we assign a data-driven investment score that captures the companys potential and challenges.
Warren.AI 💰 3.0 / 10
Table of Contents
- Company Background and Structure
- Business Model and Operating Segments
- Direct Sales
- Pharmacy Chain
- Hotel Operations
- Manufacturing & Sale
- Key Acquisitions During FY 2024
- Revenue and Segment Analysis
- Cost Structure & Gross Margins
- Profitability & Cash Flow
- Balance Sheet & Going-Concern
- Material Risks Highlighted in Item 1A
- Corporate Governance & Related-Party Transactions
- Investment Score & Outlook
Company Background and Structure
- Incorporation: Founded December 30, 1987, as a Colorado corporation.
- Reverse Merger: On December 12, 2017, completed the acquisition of AiXin (BVI) International Group Co., Ltd. (AiXin BVI), becoming a holding company with substantial operations in the PRC.
- Corporate Structure: Today's structure includes four PRC-based operating subsidiaries:
- AiXin Zhonghong (direct marketing of nutritional supplements)
- Aixin Shangyan Hotel (hotel lease and operations)
- Chengdu Aixintang Pharmacies (nine pharmacies in Chengdu)
- Yunnan Runcangsheng (plant-derived supplement manufacturing)
All four operate under the umbrella of two intermediate holding companies: AiXin Hong Kong (AiXin HK) and AiXin BVI (British Virgin Islands).
Business Model and Operating Segments
Aixin Lifes strategy is an omni-channel approach in Chinas booming health & wellness market:
- Direct Sales: Nutrition exhibits and in-home sessions
- Pharmacy Chain: Company-owned outlets for retail sales and education
- Hotel Operations: Hospitality venue for workshops & lodging
- Manufacturing & Sale: Vertical integration via Runcangshengs plant and R&D facility
Direct Sales
- One-on-one consultative selling of premium supplements.
- Group events and educational marketing to build customer loyalty.
Pharmacy Chain
- Acquired nine Chengdu pharmacies in mid-2021.
- Eight are company-brand stores, boosting foot traffic and cross-sales.
- Serves as product showcase and health coaching center.
Hotel Operations
- Previously acquired one hotel in Jinniu District (2021).
- Terminated that lease in March 2024 and moved to a new Xindu District property in February 2024.
- The new 18,000 sqm lease expires in 2034.
- Revenue derived from room rentals, F&B and recreation services.
Manufacturing & Sale
- Yunnan Runcangsheng (acquired Sept. 2022) operates a 13,000 sqm facility:
- R&D labs, extraction, packaging workshop
- Plantation sites for key herbs
- Focus on plant extracts, TCM derivatives, custom wellness formulas.
Key Acquisitions During FY 2024
- Hotel Lease (Feb. 6, 2024): Moved from Jinniu to Xindu District hotel, 18,000 sqm.
- No new major acquisitions; continued integration of Runcangsheng and pharmacy chain.
Revenue and Segment Analysis
| Segment | 2024 Revenue | 2023 Revenue | YoY Change | % of Total 2024 |
|---|---|---|---|---|
| Direct Sales | $504,097 | $1,159,134 | -57.5% | 13.2% |
| Pharmacies | $822,958 | $937,655 | -12.2% | 21.5% |
| Hotel | $585,634 | $1,194,829 | -51.0% | 15.3% |
| Manufacturing & Sale | $1,911,612 | $798,181 | +139.5% | 50.0% |
| Total Revenue | $3,824,301 | $4,089,799 | -6.4% | 100.0% |
- Manufacturing & Sale grew by 139%, driven by Runcangshengs ramp-up.
- Direct Sales and Hospitality declined heavily due to event slowdowns, hotel relocation.
- Pharmacy sales dipped 12% in a challenging retail environment.
Cost Structure & Gross Margins
| Segment | 2024 Cost of Sales | 2024 Gross Margin |
|---|---|---|
| Direct Sales | 173,950 | 65.5% |
| Pharmacies | 262,276 | 68.1% |
| Manufacturing & Sale | 1,331,138 | 30.4% |
| Hotel | 1,447,599 | -147.0% (Loss) |
- Direct Sales and Pharmacy show healthy >65% gross margins.
- Manufacturing sits at ~30% margins, typical for herbal extractions.
- Hotel operations ran at a heavy loss during relocation and FG&A.
Profitability & Cash Flow
| Metric | 2024 | 2023 |
|---|---|---|
| Operating Loss | $(2,588,191) | $(2,498,807) |
| Net Loss | $(2,768,341) | $(2,090,694) |
| Operating Cash Flow | $(1,628,834) | $(1,392,259) |
| Net Cash Decrease (all) | $(404,656) | $(152,934) |
- Recurring operating losses of $2.6M in 2024 vs. $2.5M in 2023.
- Net loss widened to $2.8M (vs. $2.1M in 2023).
- Negative operating cash flow of $1.63M reflects buildup in working capital and under-performing segments.
Balance Sheet & Going-Concern
| Balance Sheet Item | Dec 31, 2024 | Dec 31, 2023 |
|---|---|---|
| Cash & Equivalents | $62,310 | $443,758 |
| Total Assets | $4.41M | $4.84M |
| Total Liabilities | $8.69M | $6.75M |
| Stockholders Deficit | $(4.28M) | $(1.91M) |
| Working Capital Deficit | $(6.02M) | $(4.47M) |
- Working Capital Deficit tripled to $6.0M, signaling a liquidity crunch.
- Total Liabilities exceed assets by $4.28M.
- Management issues a going-concern warning in Note 1.
Material Risks Highlighted in Item 1A
- Fragmented & Competitive market for supplements in China.
- Significant regulatory uncertainty in the PRC.
- No profitability track record; unproven business model.
- Dependence on related parties, especially CEO Mr. Lin.
- Going-Concern: recurring losses, cash burn, stockholders deficit.
- Exposure to PCAOB inspection requirements & U.S. accounting/regulatory scrutiny.
Corporate Governance & Related-Party Transactions
- Major Shareholder: Mr. Quanzhong Lin holds ~58% of common stock.
- Four directors; three are independent.
- Intense related-party activity: AriXin HK leases, receivables/payables from entities controlled by Mr. Lin and other insiders.
- Audit, Compensation, Nominating committees in place.
Investment Score & Outlook
Investment Potential Score: 3.0 / 10
Upside Drivers:
- Vertical integration with Runcangshengs manufacturing.
- Fast-growing Chinese health & wellness sector.
- Omnichannel model combining direct sales, pharmacies & e-commerce.
Downside Risks:
- Heavy and growing operating losses & cash burn.
- $6M working capital deficit; going-concern warning.
- Regulatory & geopolitical risk in the PRC market.
- Key-person risk: major shareholder also CEO.
Bottom Line: While AiXin Life International has assembled an interesting array of assets in Chinas booming wellness landscape, recurring losses, a stressed balance sheet and significant regulatory uncertainties make it a highly speculative play. Potential investors should proceed with caution.
Full 10-K review & financial scorecard: [Read the deep dive]