Here is an important question: If the mallsai business is profitable, and is necessary in order to keep the money-losing side of the business running (which is the sale of "real" bonsai), then why not sell only mallsai, and stop bothering with anything else? Using some numbers, if you make a net profit of a $500,000 from mallsai, and you end up with a net loss of $100,000 from the sale of higher quality bonsai, then your bottom line will be a profit of $400,000 ($500,000 minus $100,000). Why not close the losing side of the business, and keep the entire $500,000 profit. It would be insane to purposefully lower your profit by doing something that constantly loses money.
So, in light of the above, I don't believe that they lose money on selling real bonsai. But they certainly add to their profits, by selling mallsai, and that helps them stay alive. They need to diversify their products, since the market is too small to go with just one type.