Lianhe Sowell International Group Ltd Announces Financial Results for Fiscal Year 2025
Rhea-AI Summary
Lianhe Sowell (NASDAQ:LHSW), a Chinese industrial machine vision solutions provider, reported stable revenues of $36.54 million for fiscal year 2025, with significant business mix transformation. Software revenue surged 177% to $14.57 million, while electronic products revenue decreased 30% to $21.97 million, reflecting a strategic shift towards higher-margin offerings.
The company achieved a 13% increase in net income to $3.18 million, with gross margin expanding by 4 percentage points to 26%. Notable developments include successful deliveries of automated precision vision spray painting robots to major clients like Mercedes-Benz Asia and MM Motors, along with a 500-unit order worth RMB200 million. The company completed an $8 million IPO on Nasdaq and received an LOI for up to RMB200 million in funding for R&D and manufacturing expansion.
Positive
- Software revenue increased 177% to $14.57 million, driven by strengthened marketing efforts
- Gross margin improved by 4 percentage points to 26% due to higher-margin product mix
- Net income grew 13% to $3.18 million
- Secured major orders including 500 Spray-Painting Robots worth RMB200 million
- Successfully completed $8 million IPO on Nasdaq
- Received LOI for potential RMB200 million funding for R&D and manufacturing expansion
- Achieved international market penetration with robot deliveries to Mercedes-Benz Asia and South Korean MM Motors
Negative
- Electronic products revenue declined 30% to $21.97 million
- Selling expenses increased 142% to $0.78 million
- R&D expenses rose 51% to $3.46 million due to increased third-party services
Insights
Lianhe Sowell shows strategic pivot to higher-margin software (+177%), improving profitability despite flat revenue; robotics expansion promising.
Lianhe Sowell's FY2025 results reveal a deliberate strategic transformation rather than pure growth. While total revenue remained essentially flat at
This strategy is already yielding improved profitability metrics. Gross profit increased
The margin improvement is particularly notable given the substantial increase in R&D expenses, which rose
The April 2025 IPO that raised
This transition to higher-margin offerings, combined with the robotics expansion strategy and recent capital infusions, positions Lianhe Sowell for potentially stronger profitability in the coming periods, though investors should monitor whether the strategic pivot can eventually drive top-line growth as well.
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 approximately177% to approximately$14.57 million , driven by strengthened marketing efforts that resulted in significant customer growth. Revenue from sales of electronic products decreased approximately30% 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 approximately26% 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 approximately13% 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. | 2025 | 2024 | Variances | |
| % | ||||
| Revenues | 36.54 | 36.60 | - | |
| Cost of revenues | 26.96 | 28.64 | (6.00) | |
| Gross profit | 9.58 | 7.96 | 20.26 | |
| Gross margin | 4 percentage points | |||
| Operating income | 3.08 | 2.98 | 3.23 | |
| Net income | 3.18 | 2.82 | 12.94 | |
Revenue
Total revenues remained stable, with a slight decrease of approximately
However, this gain was partially offset by an approximately
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, | |||||||||||
| 2025 | 2024 | Variance | ||||||||||
| Revenue Category | Amount | % 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 | 177.00 | ||||||
| Engineering project | — | — | — | — | — | — | ||||||
| Total revenues | 36.54 | 100.00 | 36.60 | 100.00 | (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
As a result, Lianhe Sowell recorded gross profits of approximately
Operating Expenses
Selling Expenses
Selling expenses increased by approximately
Salary and welfare rose by approximately
General and Administrative Expenses
General and administrative expenses decreased by approximately
The decline was primarily due to a reduction in professional fees of approximately
Research and Development Expenses
Research and development expenses were approximately
The increase was mainly due to higher spending on third-party R&D services, which rose by approximately
Net Income
As a result of the foregoing, the Company reported a net income of approximately
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
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
ir@sowellrobot.com
WFS Investor Relations Inc.
Janice Wang
Email: services@wealthfsllc.com
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 | 2024 | |||||||
| ASSETS | ||||||||
| 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 | $ | 5,000 | $ | 5,000 | ||||
| Subscription receivables | — | (5,000 | ) | |||||
| Additional paid-in capital | 4,374,056 | 3,688,178 | ||||||
| Statutory reserve | 297,656 | 159,109 | ||||||
| Retained earnings | 6,994,445 | 4,008,330 | ||||||
| Accumulated 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 | 2023 | ||||||||||
| Revenue 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 PROFIT | 9,575,235 | 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 INCOME | 3,079,170 | 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), net | 78,790 | (55,413 | ) | 8,052 | ||||||||
| INCOME BEFORE INCOME TAXES | 3,157,960 | 2,927,447 | 1,840,352 | |||||||||
| Benefit from (provision for) income taxes | 24,605 | (109,622 | ) | (230,297 | ) | |||||||
| NET INCOME | 3,182,565 | 2,817,825 | 1,610,055 | |||||||||
| Less: net income (loss) attributable to non-controlling interests | 57,903 | (89 | ) | (55 | ) | |||||||
| Net income attributable to shareholders of the Company | 3,124,662 | 2,817,914 | 1,610,110 | |||||||||
| Other comprehensive loss | ||||||||||||
| Foreign currency translation adjustment | (69,002 | ) | (187,115 | ) | (100,009 | ) | ||||||
| Total comprehensive income | 3,113,563 | 2,630,710 | 1,510,046 | |||||||||
| Less: 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 | |||||||||
FAQ
What were Lianhe Sowell's (LHSW) key financial results for fiscal year 2025?
How much did Lianhe Sowell's software revenue grow in FY 2025?
What major orders did LHSW secure for its Spray-Painting Robots in 2025?
How much funding did Lianhe Sowell raise in its Nasdaq IPO?
What is LHSW's strategic focus for future growth?
