EX-99.1 2 ea028377301ex99-1.htm FINANCIAL RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2025

Exhibit 99.1

 

Lianhe Sowell International Group Ltd
Financial Results for the First Half Year ended September 30, 2025

 

Key Financial Performance Highlights for the First Half Year ended September 30, 2025

 

Revenues were $26.54 million for six months ended September 30, 2025, representing an increase of 56.9% compared to $16.92 million for the same period in 2024. Revenue from sales of electronic products for the six months ended September 30, 2025 grew by 58.7% to $20.90 million, up from $13.17 million for the six months ended September 30, 2024, driven by increased market demand and expanded distribution channels. Revenue from sales of software for the six months ended September 30, 2025 increased 50.5% to $5.63 million, compared to $3.74 million for the six months ended September 30, 2024, driven by strengthened marketing efforts that resulted in significant customer growth.

 

Gross profit was $6.7 million for the six months ended September 30, 2025, up from $3.59 million for the same period in 2024. Gross margin was 25.3% for the six months ended September 30, 2025, up about 4 percentage points from 21.2% for the same period in 2024, which was primarily driven by increased sales of higher-margin software.

 

Net loss was $0.69 million for the six months ended September 30, 2025, compared to net income of $1.25 million for the same period in 2024.

 

The first half of fiscal 2025 marked a period of strategic transformation for Lianhe Sowell International Group Ltd (the “Company”). The Company’s total revenue grew significantly by 56.9%, driven by deliberate shifts in its business mix. Revenue from higher-margin software solutions increased 50.5%, while revenue from electronic products grew by 58.7%. This balanced growth, combined with disciplined cost management, expanded the Company’s gross margin by 4.0 percentage points.

 

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

 

 

 

 

Selected First Half Year ended September 30, 2025 Financial Results

 

   For the Six Months Ended September 30, 
In USD Millions, except %, differences due to rounding.  2025   2024   Variances /% 
Revenues   26.54    16.92    9.6 
Cost of revenues   19.83    13.33    6.5 
Gross profit   6.70    3.59    3.1 
Gross margin   25.3%   21.2%   4.0%
Operating (loss) income   (0.98)   1.17    (2.2)
Net (loss) income   (0.69)   1.25    (1.9)

 

Revenue

 

Total revenues increased significantly by $9.62 million, or 56.9%, from $16.92 million for the six months ended September 30, 2024 to $26.54 million for the six months ended September 30, 2025. This growth was primarily driven by strong performance across both business segments. All revenues were derived from third parties, with no related party transactions in either period.

 

Revenue from electronic products increased by $7.73 million, or 58.7%, from $13.17 million in the first half of 2024 to $20.90 million in the first half of 2025. Electronic products continued to be the primary revenue contributor, representing 78.8% of total revenues in the first half of 2025, compared to 77.9% in the same period of 2024.

 

Revenue from software sales increased by $1.89 million, or 50.5%, from $3.74 million in the first half of 2024 to $5.63 million in the first half of 2025. Software sales represented 21.2% of total revenues in the first half of 2025, compared to 22.1% in the same period of 2024. 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 six months ended September 30, 2025.

 

The following table presents revenues by revenue categories for the six months ended September 30, 2025 and 2024, respectively:

 

   For the Six Months Ended September 30,         
In USD Millions, except %, differences due to rounding.  2025   2024   Variance 
Revenue Category  Amount   of
revenues
   Amount   of
revenues
   Amount   % 
Electronic products   20.90    78.8    13.17    77.9    7.73    58.7 
Software   5.63    21.2    3.74    22.1    1.89    50.5 
Total revenues   26.54    100.0    16.92    100.0    9.62    56.9 

   

2

 

 

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.

 

Cost of revenues increased by $6.51 million, or 48.8%, from $13.33 million in the first half of 2024 to $19.83 million in the first half of 2025. This increase was primarily attributable to the growth in sales volume across both electronic products and software.

 

As a result, gross profit increased by $3.11 million, or 86.7%, from $3.59 million for the six months ended September 30, 2024 to $6.70 million for the six months ended September 30, 2025. The gross profit margin improved to 25.3% in the first half of 2025 from 21.2% in the same period of 2024, primarily driven by the growth in software sales, which carry higher margins.

 

Operating Expenses

 

Selling Expenses

 

Selling expenses increased by $26,000, or 9.1%, from $292,000 in the first half of 2024 to $319,000 in the first half of 2025, mainly due to higher salary and welfare costs.

 

General and Administrative Expenses

 

General and administrative expenses increased significantly by $2.89 million, or 443.4%, from $653,000 in the first half of 2024 to $3.55 million in the first half of 2025. This substantial increase was primarily due to expenses associated with being a newly public company, including increased professional fees, insurance, and compliance-related costs following the Company’s initial public offering in April 2025.

 

Research and Development Expenses

 

Research and development expenses increased by $2.34 million, or 158.4%, from $1.48 million in the first half of 2024 to $3.82 million in the first half of 2025. The increase was mainly due to higher spending on third-party R&D services and accelerated innovation in the Company’s industrial robotics line. 

 

3

 

 

Net (Loss) Income

 

As a result of the foregoing, the Company reported a net loss of $0.69 million for the six months ended September 30, 2025, compared to net income of $1.25 million for the six months ended September 30, 2024. The turnaround into loss was primarily attributable to a significant increase in operating expenses, particularly general and administrative expenses (up 443.4%) and research and development expenses (up 158.4%), following the Company’s initial public offering in April 2025 and accelerated investment in R&D activities.

 

Recent Developments

 

As of September 30, 2025, Lianhe Sowell newly received certain sales deposit for the software service, which led to the significant increase of contract liabilities of $3.32 million. In addition, Lianhe Sowell also prepaid purchase deposits to the suppliers mainly for the electronic products sales, which led to the significant increase of prepayments, deposits and other receivables, net of $2.47 million. As of September 30, 2025, Lianhe Sowell also further prepaid the service fees for research and development projects and other service projects amounted to $4.36 million.

 

Forward-Looking Statement

 

This document 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 document. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

 

4

 

 

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2025 AND MARCH 31, 2025

 

(Stated in US Dollars)

 

   As of
September 30,
   As of
March 31,
 
   2025   2025 
   (Unaudited)   (Audited) 
ASSETS        
Current assets:        
Cash and cash equivalents  $90,608   $108,745 
Accounts receivable, net   18,144,107    19,144,103 
Prepayments, deposits and other receivables, net   7,172,492    3,321,253 
Amount due from related parties, net   247,228    69,514 
Amount due from shareholders   1,443,748    413,350 
Total current assets   27,098,183    23,056,965 
           
Non-current assets:          
Property and equipment, net   137,180    67,083 
Intangible assets, net   43,828    42,321 
Operating lease right-of-use asset, net   815,110    120,918 
Prepayments   10,394,231    6,035,922 
Deferred initial public offering (“IPO”) costs       921,217 
Deferred tax assets   738,359    484,704 
Total non-current assets   12,128,708    7,672,165 
           
TOTAL ASSETS  $39,226,891   $30,729,130 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Current liabilities:          
Short-term bank loans  $2,475,041   $1,996,775 
Current portion of long-term bank loans   24,080    47,247 
Short-term other borrowings       55,121 
Accounts payable   10,555,240    11,782,429 
Accrued expenses and other payables   3,456,985    2,863,896 
Income tax payable   558,834    631,419 
Contract liabilities   3,817,472    500,246 
Operating lease liability – current   421,350    123,645 
Warranty provision   166    1,311 
Amount due to related parties   8,845    19,928 
Amount due to shareholders   164,362    628,076 
Total current liabilities   21,482,375    18,650,093 
           
Non-current liabilities:          
Operating lease liability – non-current   363,388     
Non-current portion of long-term bank loans   48,072    287,872 
Long-term other borrowing       137,804 
Total non-current liabilities   411,460    425,676 
           
TOTAL LIABILITIES  $21,893,835   $19,075,769 
           
SHAREHOLDERS’ EQUITY          
Ordinary shares, par value $0.0001; 500,000,000 shares authorized, 50,000,000 shares issued and outstanding as of September 30, 2025 and March 31, 2025, respectively  $5,200   $5,000 
Additional paid-in capital   10,515,294    4,374,056 
Statutory reserve   297,656    297,656 
Retained earnings   6,261,268    6,994,445 
Accumulated other comprehensive loss   149,239    (75,549)
Equity attributable to the shareholders of the Company   17,228,657    11,595,608 
           
Non-controlling interests   104,399    57,753 
Total shareholders’ equity   17,333,056    11,653,361 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $39,226,891   $30,729,130 

 

5

 

 

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

 

(Stated in US Dollars)

 

   For the Six Months Ended
September 30,
 
   2025   2024 
   (Unaudited)   (Unaudited) 
Revenue from third parties  $26,538,675   $16,918,107 
Revenue from a related party        
REVENUES  $26,538,675   $16,918,107 
           
COST OF REVENUES   (19,834,974)   (13,327,901)
           
GROSS PROFIT   6,703,701    3,590,206 
           
OPERATING EXPENSES          
Selling expenses   (318,863)   (292,399)
General and administrative expenses   (3,547,600)   (652,843)
Research and development expenses   (3,817,635)   (1,477,688)
Total operating expenses   (7,684,098)   (2,422,930)
           
OPERATING (LOSS) INCOME   (980,397)   1,167,276 
           
OTHER INCOME (EXPENSE), NET          
Interest income   240    144 
Interest expense   (53,967)   (50,388)
Other income   69,307    110,569 
Other expense   (44,141)   (4,092)
Total other (expense) income, net   (28,561)   56,233 
           
(LOSS) INCOME BEFORE INCOME TAXES   (1,008,958)   1,223,509 
Benefit from (provision for) income taxes   322,427    21,583)
NET (LOSS) INCOME   (686,531)   1,245,092 
Less: net income (loss) attributable to non-controlling interests   46,646    (2,708)
Net (loss) income attributable to shareholders of the Company   (733,177)   1,247,800 
           
Other comprehensive income (loss)          
Foreign currency translation adjustment   224,788    (69,001)
Total comprehensive (loss) income   (461,743)   1,176,091 
Less: comprehensive income (loss) attributable to non-controlling interests   46,646    (2,708)
Comprehensive (loss) income  $(508,389)  $1,178,799 
           
(Loss) earning per share – basic and diluted  $(0.01)  $0.02 
           
Basic and diluted weighted average shares outstanding   51,967,033    50,000,000 

 

 

6