ATPC — Q2 2026 Financial Report Analysis

A first quarterly profit, made entirely by a currency move

Agape ATP Corporation, a Malaysian seller of health supplements and wellness programs, reported net income attributable to shareholders of $153,003 for the quarter ended June 30, 2026, against a $617,078 loss a year earlier. That profit came from outside the business. Revenue fell 93.4% to just $13,693, the company lost $550,975 running its operations, and a $645,027 foreign-exchange gain turned that loss into a profit. The gain came from the paper rise in value of a $23 million Chinese-yuan deposit that the company sent to an outside investment manager in March 2025 and that, more than a year later, still has not been put into any investment.

At a glance

• Revenue of $13,693, down 93.4%. The green-energy unit, which supplied about two-thirds of revenue a year ago ($135,434), booked nothing because it "did not secure any new projects." The core supplement business is also shrinking.
• $645,027 FX gain against a $550,975 operating loss. Take out the currency gain and the company is still losing roughly half a million dollars a quarter.
• $24.5 million of the company's $25.0 million in assets (98%) is one deposit held by Bi Cheng Investment Management, with no investment identified. Cash on hand was $45,480, and the company says there is "substantial doubt" about its ability to keep operating (a "going concern" warning).

Key figures — Q2 2026 (three months to June 30)

All figures are in US dollars (the company reports in USD; its operations are in Malaysian ringgit). Share figures reflect the 1-for-50 reverse stock split of February 20, 2026.

"n/m" = not meaningful. Percentage changes from a loss to a profit don't mean anything, and an operating margin of minus 4,000% on $13,693 of sales says more about how small the revenue is than about cost control. Operating margin is the share of revenue left after running the business, before interest and tax.

First half of 2026 (six months to June 30): revenue $35,281 (-85.5% from $243,820); loss from operations $1,195,109 (vs $1,307,013); FX gain $967,485; net loss attributable to Agape $174,616 (vs $1,316,027); EPS -$0.17 (vs -$2.20).

Where the revenue went

The 10-Q gives a separate reason for each business line:

• Green energy (ATPC Green Energy) was the largest line a year ago, and it is project-based: when no new project is won, revenue drops to zero. That is what happened in both Q1 and Q2 2026.
• Network marketing (supplements sold through distributors under the ATP Zeta Health Program and E.A.T.S. brands) halved "primarily due to limited product range available for sale."
• Wellness and skin care fell 89.7% because of "fewer wellness-related activities and programs conducted during the period."

Gross margin (revenue minus the direct cost of the goods sold, as a share of revenue) jumped from 31.6% to 86.0% only because the low-margin green-energy contracts disappeared and what was left is high-margin supplement sales. That is a mix effect, not better pricing. On $13,693 of revenue it amounts to $11,770 of gross profit, which covered about 2% of the quarter's $562,745 in operating costs.

Costs did come down. General and administrative expense fell 13.4% to $529,033, selling expense fell 49.4% to $30,315, and commissions fell 78.8% to $3,397 as sales shrank. But G&A (salaries, rent, professional fees) is now about 39 times revenue, so the business is overhead with very little income behind it.

What the headline numbers hide

• The profit is a currency effect, not cash. In March 2025 the company raised $23.0 million in a share sale and, in the same half-year, sent CNY 166.75 million (equal to $23.0 million) to Bi Cheng Investment Management Limited under an "entrusted investment agreement" to find and manage investments on its behalf. Because the yuan has strengthened against the dollar, that deposit is now valued at $24,531,431, about 6.7% above what was sent. The increase goes through the income statement as an exchange gain: $645,027 this quarter and $967,485 for the half. The cash-flow statement removes a $976,604 unrealized exchange gain for the half, which confirms none of it was received in cash. If the yuan weakens, the same line will produce losses.
• Cash conversion is negative. First-half net loss from continuing operations was $224,097, but continuing operations used $464,451 of cash, about twice the reported loss. The loss looks smaller than the cash burn because of the paper FX gain.
• A director is funding day-to-day operations. The company has no bank credit facilities. In the first half, a director advanced $499,893 (financing cash flow), and "amount due to directors" rose another $648,651 in operating cash flow. Payables to related parties on the balance sheet went from $831,714 at December 31, 2025 to $2,056,521 at June 30, 2026, up about $1.22 million in six months.
• One-off items in Q2. On June 11, 2026 the company sold its 60% stake in DSY Wellness (complementary health therapies) back to the minority partner. That produced a $74,760 gain on disposal, reported in discontinued operations, and is what lifted EPS from $0.09 (continuing operations) to $0.15. A $1,813 gain on sale of equipment and a $15,387 unrealized loss on marketable securities also passed through.
• Working capital is almost entirely one asset. Management reports working capital of $21.9 million, but $24.5 million of current assets is the Bi Cheng deposit. Under the agreement it is "refundable upon mutual agreement" with Bi Cheng, with repayment expected within two months of such an agreement. The company cannot recall it on its own. Separately, prepaid expenses of $520,810 carry a $509,994 credit-loss allowance, meaning almost all of them have already been written down as unlikely to be recovered.
• Receivables and inventory are not a concern. Accounts receivable fell to zero (from $4,023) and inventory fell to $21,678 (from $26,148), in step with lower sales.
• The share count is not a factor this quarter. Weighted shares were about 1.0 million in both quarters after the reverse split, so the swing in EPS reflects the change in net income, not buybacks or dilution. Dilution is a real possibility next: the company filed an S-1 registration statement in June 2026 (amended in July) and has capitalized $73,128 of deferred offering costs, which points to a new share sale. Authorized common shares were also raised from 500 million to 30 billion.

Takeaway: Agape ATP's first profitable quarter came from the yuan rising against a $23 million deposit that has sat with a third-party manager for more than a year without being invested. The operating business brought in $13,693 and lost $550,975, and a director's advances are paying its costs. What happens to the Bi Cheng deposit matters far more to shareholders than anything the supplement business does.

Outlook

The 10-Q gives no revenue or earnings guidance. Management's stated plan, as described in the going-concern note, is to increase revenue, control costs, raise outside financing and "invest in new opportunities." The company also says it is working on a digital wellness platform through ATPC Technology in China. Neither the filing nor its financials show any revenue from that platform yet.

Our view of what decides the next few quarters:

1. The Bi Cheng deposit. The filing says the company will reclassify it as an investment "once a definitive transaction has been completed." The next useful disclosures are whether a specific investment is announced, or whether the company asks for its money back. Either one would shift the company's value much more than the operating results do. Until then, reported earnings will move with the CNY/USD exchange rate.
2. The operating cash burn. At about $230,000 of cash used per quarter from continuing operations, against $45,480 in the bank, the company relies on continued director advances or on the planned share offering under the S-1.
3. Whether green energy wins another project. One contract was worth $135,434 in Q2 2025, almost ten times this quarter's total revenue. Green energy is the only line big enough to change the revenue trend, but it has booked nothing for two quarters running.

This is our first published report on Agape ATP, so there is no earlier outlook to check against.