Lianhe Sowell International Group Ltd Announces Financial Results for Fiscal Year 2025

SHENZHEN, China, Aug. 18, 2025 (GLOBE NEWSWIRE) -- Lianhe Sowell International Group Ltd (Nasdaq: LHSW) (the “Company” or “Lianhe Sowell”), a provider of industrial machine vision products and solutions in China, today announced its financial results for the fiscal year ended March 31, 2025.

Key Financial Performance Highlights of Fiscal Year 2025

Revenues were approximately $36.54 million in the fiscal year ended March 31, 2025, which remained at the same level of approximately $36.60 million in 2024. Revenue from sales of software increased approximately 177% to approximately $14.57 million, driven by strengthened marketing efforts that resulted in significant customer growth. Revenue from sales of electronic products decreased approximately 30% to approximately $21.97 million, reflecting a strategic move towards product offerings with higher‑margins.Gross profit was approximately $9.58 million in 2025, up from approximately $7.96 million in 2024. Gross margin was approximately 26% in 2025, up about 4 percentage points from 2024, which was driven by increased sales of higher‑margin software .Net income was approximately $3.18 million in 2025, reflecting an increase of approximately 13% as compared to net income in 2024.

Mr. Yue Zhu, CEO and Director of the Company commented: “Fiscal 2025 was a year of strategic transformation for Lianhe Sowell. We maintained stable overall revenues while deliberately reshaping our business mix toward higher‑margin software solutions, which nearly tripled in sales. This shift, combined with disciplined cost management, expanded our gross margin by four percentage points and drove double‑digit growth in net income.”

“We also accelerated innovation in our industrial robotics line, achieving significant milestones in the commercialization of our new generation automated precision vision spray painting robots, both domestically and internationally. The strong market reception, reflected in major orders and deliveries, reinforces our belief that intelligent, automated solutions will be a major growth driver for years to come.”

“Looking ahead, we plan to remain focused on scaling our software and robotics businesses, deepening R&D investment, and executing on our high‑margin growth strategy. With our strengthened product portfolio, robust order pipeline, and the planned expansion of our manufacturing capacity, we are confident in our ability to deliver sustainable value to our shareholders and customers worldwide.”

Selected Fiscal Year 2025 Financial Results

For Fiscal Years Ended March 31 In USD Millions, except %, differences due to rounding.20252024Variances %Revenues36.5436.60- Cost of revenues26.9628.64(6.00)Gross profit9.587.9620.26 Gross margin26.00%22.00%4 percentage pointsOperating income3.082.983.23 Net income3.182.8212.94

Revenue

Total revenues remained stable, with a slight decrease of approximately $0.06 million, from approximately $36.60 million for the year ended March 31, 2024, to approximately $36.54 million for the year ended March 31, 2025. This was primarily due to a significant increase in software sales, which rose by approximately $9.31 million, or approximately 177%, from approximately $5.27 million in 2024 to approximately $14.57 million in 2025.

However, this gain was partially offset by an approximately $9.36 million, or approximately 30%, decline in revenue from electronic product sales, which fell from approximately $31.33 million in 2024 to approximately $21.97 million in 2025. The drop in electronic product sales resulted from the Company’s strategic shift toward higher-margin offerings and a reduction in lower-margin product lines.

The surge in software sales was driven by enhanced marketing efforts, including increased investment in advertising and promotion, which led to rapid customer growth during the year ended March 31, 2025. Additionally, no revenue was generated from the engineering project in either year due to its suspension.

The following table presents revenues by revenue categories for the years ended March 31, 2025 and 2024, respectively:

In USD Millions, except %, differences due to rounding. For Fiscal Years Ended March 31, 20252024VarianceRevenue CategoryAmount% of
revenues Amount% of
revenues Amount%Electronic products 21.97 60.00 31.33 86.00 (9.36) (30.00)Software 14. 57 40.00 5.27 14.00 9.31 177.00Engineering project — — — — — —Total revenues36.54100.00 36.60100.00 (0.06) —

Cost of Revenues and Margins

Cost of revenues primarily consists of (i) labor expenses, including salaries, social insurance, and benefits, for employees engaged in operations and product support, and (ii) associated costs of materials and equipment. For the year ended March 31, 2025, cost of revenues was approximately $26.96 million, reflecting a decrease of approximately $1.67 million, or approximately 6%, from approximately $28.64 million in the year ended March 31, 2024. This reduction was mainly attributable to the decline in electronic product sales, as the Company shifted its sales focus toward products with higher gross margins and reduced sales of lower-margin electronic products during the year ended March 31, 2025.

As a result, Lianhe Sowell recorded gross profits of approximately $9.58 million and approximately $7.96 million, with gross margins of approximately 26% and approximately 22% for the years ended March 31, 2025 and 2024, respectively. The overall gross margin increased by approximately 4 percentage points, primarily driven by the growth in software sales, which carry higher margins, during the year ended March 31, 2025 compared to 2024.

Operating Expenses

Selling Expenses

Selling expenses increased by approximately $0.46 million, or approximately 142%, from approximately $0.32 million in 2024 to approximately $0.78 million in 2025, mainly due to higher salary and welfare costs.

Salary and welfare rose by approximately $0.32 million, or approximately 222%, driven by the hiring of additional sales staff to support business promotion in 2025.

General and Administrative Expenses

General and administrative expenses decreased by approximately $0.12 million, or approximately 5%, from approximately $2.37 million in 2024 to approximately $2.25 million in 2025.

The decline was primarily due to a reduction in professional fees of approximately $0.29 million, or approximately 41%, mainly from lower payments to the Company’s independent auditor. Meanwhile, provision for doubtful accounts and rental and property management fees increased by approximately $0.06 million, or approximately 5%, and approximately $0.06 million, or approximately 66%, respectively.

Research and Development Expenses

Research and development expenses were approximately $3.46 million in 2025, up approximately $1.18 million, or approximately 51%, from approximately $2.29 million in 2024.

The increase was mainly due to higher spending on third-party R&D services, which rose by approximately $1.23 million, or approximately 76%.

Net Income

As a result of the foregoing, the Company reported a net income of approximately $3.18 million for the year ended March 31, 2025, compared to a net income of approximately $2.82 million for the year ended March 31, 2024.

Recent Developments

On July 24, 2025, Lianhe Sowell announced the successful export and commissioning of 10 sets of its new generation automated precision vision spray painting robots (the “Spray-Painting Robots”) to South Korean client MM Motors Co., Ltd.

On July 10, 2025, Lianhe Sowell announced the successful delivery of one of its Spray-Painting Robots to Mercedes-Benz Asia’s largest Body & Paint center in Beijing, China.

On June 05, 2025, Lianhe Sowell announced entry into sales agreements with seven equipment sales agents for sales of 500 Spray-Painting Robots with full delivery estimated to be completed by Q1 2026. Total sales amount of the order is approximately RMB200 million.

On May 12, 2025, Lianhe Sowell announced it received a letter of intent (the “LOI”) from Hangzhou Yuhang Economic Development Equity Investment Fund, for a funding of no more than RMB200 million. The Company plans to use the proceeds primarily to support research and development of its Spray-Painting Robots and in the construction of its manufacturing base in Hangzhou, Zhejiang province.

On April 04, 2025, Lianhe Sowell completed an initial public offering on the Nasdaq Capital Market to raise aggregate gross proceeds of $8 million, before deducting underwriting discounts and other offering expenses.

About Lianhe Sowell International Group Ltd

Lianhe Sowell International Group Ltd (Nasdaq: LHSW) provides industrial vision and industrial robotics solutions. With expertise in the field of machine vision and intelligent equipment, the Company specializes in smart transportation, industrial automation, artificial intelligence, and machine vision. Committed to offering comprehensive intelligent solutions to customers worldwide, the Company continuously advances the intelligent transformation of various industries through technological innovation. For more information, please visit: http://www.sowellrobot.com/

Forward-Looking Statement

This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will, “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate,” “plan” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and other risk factors discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Lianhe Sowell International Group Ltd
[email protected]

WFS Investor Relations Inc.
Janice Wang
Email: [email protected]
Phone: +86 13811768599
+1 628 283 9214

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2025 and 2024

(Stated in US Dollars) As of March 31, 2025 2024ASSETS Current assets: Cash and cash equivalents $108,745 $206,187 Accounts receivable, net 19,144,103 13,272,976 Prepayments, deposits and other receivables, net 3,321,253 1,200,827 Amount due from related parties, net 69,514 795,924 Amount due from shareholders, 413,350 — Total current assets 23,056,965 15,475,914 Non-current assets: Property and equipment, net 67,083 85,370 Intangible assets, net 42,321 11,566 Operating lease right-of-use asset, net 120,918 368,687 Prepayments 6,035,922 2,188,400 Deferred initial public offering (“IPO”) costs 921,217 708,983 Deferred tax assets 484,704 290,967 Total non-current assets 7,672,165 3,653,973 TOTAL ASSETS$30,729,130 $19,129,887 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term bank loans $1,996,775 $1,661,981 Current portion of long-term bank loan 47,247 — Short-term other borrowing 55,121 — Loan from a shareholder — 185,867 Accounts payable 11,782,429 4,795,154 Accrued expenses and other payables 2,863,896 2,624,910 Income tax payable 631,419 455,675 Contract liabilities 500,246 791,265 Operating lease liability – current 123,645 258,709 Warranty provision 1,311 26,459 Amount due to related parties 19,928 9,276 Amount due to shareholders 628,076 68,954 Total current liabilities 18,650,093 10,878,250 Non-current liabilities: Operating lease liability – non-current — 113,394 Non-current portion of long-term bank loan 287,872 289,323 Long-term other borrowing 137,804 — Total non-current liabilities 425,676 402,717 TOTAL LIABILITIES$19,075,769 $11,280,967 SHAREHOLDERS’ EQUITY Ordinary shares, par value $0.0001; 500,000,000 shares authorized, 50,000,000 shares issued and outstanding as of March 31, 2025 and 2024, respectively$5,000 $5,000Subscription receivables — (5,000)Additional paid-in capital 4,374,056 3,688,178Statutory reserve 297,656 159,109Retained earnings 6,994,445 4,008,330Accumulated other comprehensive loss (75,549) (6,547)Equity attributable to the shareholders of the Company 11,595,608 7,849,070 Non-controlling interests 57,753 (150)Total shareholders’ equity 11,653,361 7,848,920 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$30,729,130 $19,129,887

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED MARCH 31, 2025, 2024 AND 2023

(Stated in US Dollars) For the years ended March 31, 2025 2024 2023Revenue from third parties $36,539,846 $36,032,665 $13,070,586 Revenue from a related party — 566,002 — REVENUES$36,539,846 $36,598,667 $13,070,586 COST OF REVENUES(26,964,611) (28,636,850) (9,715,604) GROSS PROFIT9,575,235 7,961,817 3,354,982 OPERATING EXPENSES Selling expenses (782,523) (322,961) (251,422)General and administrative expenses (2,250,827) (2,369,855) (821,432)Research and development expenses (3,462,715) (2,286,141) (449,828)Total operating expenses(6,496,065) (4,978,957) (1,522,682) OPERATING INCOME3,079,170 2,982,860 1,832,300 OTHER INCOME (EXPENSE), NET Interest income 270 696 347 Interest expense (101,713) (57,941) (60,242)Other income 166,936 203,461 71,586 Other expense (47,325) (201,629) (3,639)Disposal gain of a subsidiary 60,622 — — Total other income (expense), net78,790 (55,413) 8,052 INCOME BEFORE INCOME TAXES3,157,960 2,927,447 1,840,352Benefit from (provision for) income taxes 24,605 (109,622) (230,297)NET INCOME3,182,565 2,817,825 1,610,055Less: net income (loss) attributable to non-controlling interests 57,903 (89) (55)Net income attributable to shareholders of the Company3,124,662 2,817,914 1,610,110 Other comprehensive loss Foreign currency translation adjustment (69,002) (187,115) (100,009)Total comprehensive income3,113,563 2,630,710 1,510,046Less: comprehensive income (loss) attributable to non-controlling interests 57,903 (89) (55) $3,055,660 $2,630,799 $1,510,101 Earning per share – basic and diluted $0.06 $0.06 $0.03 Basic and diluted weighted average shares outstanding 50,000,000 50,000,000 50,000,000