In Traditional Chinese Medicine (TCM), Hong Hua belongs to the 'Herbs that invigorate the Blood' category. Like the name indicates these herbs tend to stimulate the Blood flow. In TCM they're used to help the circulation of Blood in cardiovascular conditions or menstrual irregularities as well as to treat acute pains caused by Blood Stagnation. They can also be used to treat Blood Stagnation when it causes certain tumors, cysts and hardened clots.
Furthermore Hong Hua is Warm in nature. This means that Hong Hua tends to help people who have too much 'Cold' in their body, although with less effect than a plant that would be Hot in nature. Balance between Yin and Yang is a key health concept in TCM. Those who have too much Cold in their body are said to either have a Yin Excess (because Yin is Cold in nature) or a Yang Deficiency (Yang is Hot in Nature). Depending on your condition Hong Hua can help restore a harmonious balance between Yin and Yang.
Hong Hua also tastes Pungent. The so-called 'Five Phases' theory in Chinese Medicine states that the taste of TCM ingredients is a key determinant of their action in the body. Pungent ingredients like Hong Hua tends to promote the circulations of Qi and Body Fluids. That's why for instance someone tends to sweat a lot when they eat spicy/pungent food.
The tastes of ingredients in TCM also determine what Organs and Meridians they target. As such Hong Hua is thought to target the Heart and the Liver. In addition to regulating Blood flow, in TCM the Heart is believed to be the store of the 'Mind' which basically refers to someone's vitality. The Liver on the other hand is often referred as the body's "general" because it is in charge of regulating the movements of Qi and the Body Fluids. It also takes a leading role in balancing our emotions.