Lianhe Sowell International Group Ltd Announces Financial Results for Fiscal Year 2026

SHENZHEN, China, Aug. 13, 2026 (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, 2026.

Key Financial Performance Metrics of Fiscal Year 2026

• Total revenues increased by 18% year-over-year to $43.27 million, up from $36.54 million in fiscal year 2025.
  • Electronic Products Revenue surged 40% to $30.85 million, representing 71% of total revenues and serving as the primary growth driver.
• Gross profit was approximately $9.26 million for the fiscal year ended March 31, 2026, compared to approximately $9.58 million in 2025, with gross margin decreased to 21% from 26%.
• Operating expenses rose 148% to $16.08 million compared to $6.50 million in 2025, driven by strategic growth investments.
• Net loss for the fiscal year ended March 31, 2026 was $5.65 million, compared to a net income of approximately $3.18 million in 2025, reflecting heavy planned investments into research and development, and operational expansion in overseas markets.
  

Management Commentary

“Fiscal year 2026 was a pivotal period of top-line expansion and strategic foundational investment. Total revenues grew 18% year-over-year to approximately $43.27 million, driven by a 40% surge in electronic product sales reflecting robust market demand and several large project wins,” said Mr. Yue Zhu, Chief Executive Officer and Chairman of the Board of the Company. “While we maintained a stable 21% gross margin, our commitment to future market leadership required substantial near-term investments, especially to overseas markets expansion. We reported a net loss of approximately $5.65 million this fiscal year, driven by a 148% increase in operating costs to fund key research and business expansion. However, these strategic investments have supported our latest initiatives. We successfully developed two new products, a high-temperature steam car wash robot and an automated fueling robot, and have secured supply contracts in the US, South Korea, Thailand, France, Central America and across West, South, and East Africa.”

“Operationally, we achieved breakthrough innovations that significantly expand our competitive moat. We successfully commercialized our proprietary Nine-Axis Linkage Spray Painting Robot and other automated service robotics, driving market adoption and plan to employ an innovative ‘Leasing Cooperation Revenue Sharing’ model that lowers customer entry barriers. Concurrently, we fortified our R&D pipeline through strategic partnerships with leading institutions, accelerating our expansion into high-value sectors such as medical machine vision.”

“Looking ahead, Lianhe Sowell is transitioning into a phase of aggressive commercialization. Building on our fruitful overseas expansion, which has already secured robot supply projects in the US, France, South Korea, Thailand, Central America and across West, South, and East Africa, we will continue to advance our strategy in key international markets while securing the capacity to meet anticipated demand. By broadening our industrial robotics portfolio and adapting our facial recognition technology for consumer smart devices, we are well-positioned to expand our total addressable market and drive sustainable shareholder value.”

Selected Fiscal Year 2026 Financial Results

	For Fiscal Years Ended March 31,
In USD Millions, except %, differences due to rounding.	2026		2025		Variances		%
Revenues	$43.27		$36.54		18.00		%
Cost of revenues	$34.01		$26.96		26.00		%
Gross profit	$9.26		$9.58		(3.00)		%
Gross margin	21.00%		26.00%		(5) percentage points
Operating expenses	$16.08		$6.50		148.00		%
Net income	$(5.65)		$3.18		-

Revenue

Total revenues increased by 18%, or approximately $6.73 million, from approximately $36.54 million in 2025 to approximately $43.27 million for the fiscal year ended March 31, 2026. The growth was driven by a 40% increase in revenue from electronic products, which rose to approximately $30.85 million from approximately $21.97 million, supported by expanded market penetration and several large projects gained during the year. Software revenue decreased 15% to approximately $12.42 million from approximately $14.57 million in 2025.

The following table presents revenues by revenue categories for the years ended March 31, 2026 and 2025, respectively:

	For the Years Ended March 31,
In USD Millions, except %, differences due to rounding.	2026					2025					Variance
Revenue Category	Amount		% of revenues			Amount		% of revenues			Amount		%
Electronic products	$30.85		71	%		$21.97		60	%		$8.88		40		%
Software	$12.42		29	%		$14.57		40	%		$(2.15)		(15)		%
Total revenues	$43.27		100	%		$36.54		100	%		$6.73		18		%

Cost of Revenues and Margins

Cost of revenues increased by 26%, or approximately $7.05 million, to approximately $34.01 million in 2026 from approximately $26.96 million in 2025. Cost attributable to electronic products rose 39% to approximately $27.23 million, while cost attributable to software declined 8% to approximately $6.78 million. Gross profit was approximately $9.26 million compared to approximately $9.58 million in 2025. Overall gross margin decreased from 26% to 21%, primarily due to a revenue shift toward electronic products, which carry a lower gross margin than software. Additionally, software gross margin decreased from 49% to 45%, partially offset by an increase in electronic products gross margin from 11% to 12%.

Operating Expenses

Selling Expenses

Selling expenses increased 39% to approximately $1.09 million from approximately $0.78 million in 2025, driven by higher advertising and promotional spending to support business growth, partially offset by a $0.15 million or 32% decrease in salary and welfare expenses.

General and Administrative (G&A) Expenses

G&A expenses climbed 219%, rising from approximately $2.25 million in 2025 to approximately $7.19 million for the year ended March 31, 2026. This increase was primarily driven by approximately $2.26 million in newly incurred marketing research and consultancy fees to support successful overseas expansion, which help us gain some overseas customers and new sales contracts in the subsequent period, as well as approximately $1.30 million in share-based compensation to the Company’s CEO and shareholder, to compensate them for their contribution to the Company and also secure the service to our long term development.

Research and Development (R&D) Expenses

R&D expenses rose by 126%, or approximately $4.35 million, from approximately $3.46 million in 2025 to approximately $7.81 million in 2026. This was largely attributable to a 141%, or approximately $4.02 million increase in third-party R&D service fees.

Net Income (loss)

As a result of the factors described above, net loss for the year ended March 31, 2026, was approximately $5.65 million, compared to a net income of approximately $3.18 million for the year ended March 31, 2025.

Cash and equivalents

Cash and cash equivalents increased significantly to approximately $1.89 million as of March 31, 2026, compared to approximately $0.11 million as of March 31, 2025.

Recent Commercial Traction & Project Wins

• June 24, 2026, the Company secured African sales orders, including an agreement to deliver 10 AI-powered automotive painting robots to a maintenance group in West Africa, alongside a separate pilot project deploying one robot for trial use with a spray-coating company in South Africa.
• June 8, 2026, the Company signed supply agreement in Southeast Asia to supply ten AI-powered automotive painting robots to a Thai distributor, marking a major milestone in its Southeast Asian expansion. To support growing regional demand for its robots, the Company plans to open localized service centers and anticipates further ASEAN deliveries by late 2026.
• March 30, 2026, the Company signed a $1.8 million contract with HECA Group, Inc., a California-based company, to develop an automated artificial intelligence-powered steam car-wash robot for the customer, further advancing the Company’s strategy to commercialize water-saving cleaning solutions into the North American market.
  

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: ir.cnsoftwell.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: ir@cnsoftweIl.com

WFS Investor Relations Inc.
Email: services@wfsir.com 
Phone: +1 628 283 9214

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2026 and 2025

(Stated in US Dollars)

	As of March 31,
	2026				2025
ASSETS
Current assets:
Cash and cash equivalents	$	1,885,367			$	108,745
Accounts receivable, net		14,978,869				19,144,103
Prepayments, deposits and other receivables, net		8,130,460				3,321,253
Inventories, net		821,126				—
Amount due from related parties		256,274				69,514
Amount due from shareholders		1,391,616				413,350
Total current assets		27,463,712				23,056,965
Non-current assets:
Property and equipment, net		142,312				67,083
Intangible assets, net		46,110				42,321
Operating lease right-of-use asset (“ROU”), net		1,033,110				120,918
Prepayments		10,443,032				6,035,922
Deferred initial public offering (“IPO”) costs		—				921,217
Deferred tax assets		1,863,259				484,704
Total non-current assets		13,527,823				7,672,165
TOTAL ASSETS	$	40,991,535			$	30,729,130
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term bank loans	$	6,319,223			$	1,996,775
Current portion of long-term bank loan		28,994				47,247
Short-term other borrowing		10,169				55,121
Accounts payable		10,224,153				11,782,429
Accrued expenses and other payables		6,844,442				2,863,896
Income tax payable		653,719				631,419
Contract liabilities		959,003				500,246
Operating lease liability – current		478,603				123,645
Warranty provision		—				1,311
Amount due to related parties		23,335				19,928
Amount due to shareholders		164,971				628,076
Total current liabilities		25,706,612				18,650,093
Non-current liabilities:
Operating lease liability – non-current		595,814				—
Non-current portion of long-term bank loan		681,357				287,872
Long-term other borrowing		34,517				137,804
Total non-current liabilities		1,311,688				425,676
TOTAL LIABILITIES	$	27,018,300			$	19,075,769
	As of March 31,
	2026				2025
Commitments and contingencies (Note 19)
SHAREHOLDERS’ EQUITY
Class A Ordinary Shares (par value $0.0016; 28,125,000 shares authorized, 3,250,000 and 3,125,000 shares issued and outstanding as of March 31, 2026 and 2025, respectively) *	$	5,200			$	5,000
Class B Ordinary Shares (par value $0.0016; 3,125,000 shares authorized, 62,500 and no shares issued and outstanding as of March 31, 2026 and 2025, respectively) *		100				—
Share subscription receivables		(100	)			—
Additional paid-in capital		11,815,475				4,374,056
Statutory reserve		297,656				297,656
Retained earnings		1,299,433				6,994,445
Accumulated other comprehensive income (loss)		453,085				(75,549	)
Equity attributable to the shareholders of the Company		13,870,849				11,595,608
Non-controlling interests		102,386				57,753
Total shareholders’ equity		13,973,235				11,653,361
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	40,991,535			$	30,729,130

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
FOR THE YEARS ENDED MARCH 31, 2026, 2025 AND 2024

(Stated in US Dollars)

	For the years ended March 31,
	2026				2025				2024
Revenue from third parties	$	43,269,569			$	36,539,846			$	36,032,665
Revenue from a related party		—				—				566,002
REVENUES	$	43,269,569			$	36,539,846			$	36,598,667
COST OF REVENUES		(34,009,809	)			(26,964,611	)			(28,636,850	)
GROSS PROFIT		9,259,760				9,575,235				7,961,817
OPERATING EXPENSES
Selling expenses		(1,088,455	)			(782,523	)			(322,961	)
General and administrative expenses		(7,185,009	)			(2,250,827	)			(2,369,855	)
Research and development expenses		(7,811,079	)			(3,462,715	)			(2,286,141	)
Total operating expenses		(16,084,543	)			(6,496,065	)			(4,978,957	)
OPERATING (LOSS) INCOME		(6,824,783	)			3,079,170				2,982,860
OTHER INCOME (EXPENSE), NET
Interest income		471				270				696
Interest expense		(130,207	)			(101,713	)			(57,941	)
Other income		255,929				166,936				203,461
Other expense		(263,613	)			(47,325	)			(201,629	)
Disposal gain of a subsidiary		—				60,622				—
Total other (expense) income, net		(137,420	)			78,790				(55,413	)
(LOSS) INCOME BEFORE INCOME TAXES		(6,962,203	)			3,157,960				2,927,447
Benefit from (provision for) income taxes		1,311,824				24,605				(109,622	)
NET (LOSS) INCOME		(5,650,379	)			3,182,565				2,817,825
Less: net income (loss) attributable to non-controlling interests		44,633				57,903				(89	)
Net (loss) income attributable to shareholders of the Company		(5,695,012	)			3,124,662				2,817,914
Other comprehensive income (loss)
Foreign currency translation adjustment		528,634				(69,002	)			(187,115	)
Total comprehensive (loss) income		(5,121,745	)			3,113,563				2,630,710
Less: comprehensive income (loss) attributable to non-controlling interests		44,633				57,903				(89	)
Comprehensive (loss) income attributable to shareholders of the Company	$	(5,166,378	)		$	3,055,660			$	2,630,799
Earnings (loss) per share – basic and diluted*	$	(1.74	)		$	1.00			$	0.90
Basic and diluted weighted average shares outstanding*		3,273,867				3,125,000				3,125,000

*	All share numbers have been retroactively adjusted to reflect the 1-for-16 Share Consolidation, that became effective on June 22, 2026.

LIANHE SOWELL INTERNATIONAL GROUP LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2026, 2025 AND 2024

(Stated in US Dollars)

	For the Years Ended March 31,
	2026				2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(5,650,379	)		$	3,182,565			$	2,817,825
Adjustments to reconcile net income to cash used in operating activities:
Expected credit loss allowance		1,389,992				1,308,589				1,118,634
Depreciation of property and equipment		30,393				22,203				14,465
Amortization of intangible assets		7,405				4,024				2,755
Amortization of operating lease right-of-use asset		408,061				281,006				125,902
Impairment loss on prepayments		53,132				—				—
Impairment of inventories		179,045				—				132,444
Impairment of long-lived assets		35,017				—				—
Gain on disposal of a subsidiary		—				(60,622	)			—
Share-based compensation		1,300,181				—				—
Changes in assets and liabilities
Accounts receivable		4,178,425				(7,357,104	)			(7,082,779	)
Prepayments, deposits and other receivables		(5,636,781	)			(1,726,074	)			(1,046,756	)
Inventories		(976,595	)
Deferred tax assets		(1,314,494	)			(196,288	)			(187,662	)
Accounts payable		(2,108,255	)			7,050,519				1,757,876
Operating lease liabilities		(370,726	)			(281,682	)			(122,460	)
Income tax payable		(10,231	)			179,026				289,890
Accrued expenses and other payables		3,728,303				384,468				2,071,014
Warranty provision		(1,340	)			(25,155	)			(26,750	)
Contract liabilities		420,318				(288,656	)			795,256
Prepayments		(3,522,492	)			(4,347,391	)			(2,088,867	)
Advances to shareholders		(930,035	)			(415,590	)			—
Repayments from a shareholder		—				—				239,734
Advances to related parties		(177,888	)			—				(875,797	)
Repayment from related parties		—				800,893				—
Advances from related parties		2,548				10,695				—
Repayment to related parties		—				—				(10,350	)
Net cash used in operating activities		(8,966,396	)			(1,474,574	)			(2,075,626	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(83,006	)			(4,917	)			(66,745	)
Purchase of intangible assets		(8,947	)			(35,011	)			(5,381	)
Disposal of a subsidiary		—				(11,732	)			—
Net cash used in investing activities		(91,953	)			(51,660	)			(72,126	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment to long-term loan from related party		—				(185,969	)			(91,308	)
Repayment to long-term other borrowings		(205,812	)			—				(159,973	)
Proceeds from long-term other borrowings		—				194,005				—
Proceeds from short-term loan from a shareholder		—				—				187,246
Proceeds from short-term bank loans		6,251,839				2,100,793				1,841,745
Repayment of short-term bank loans		(2,154,350	)			(1,755,742	)			(725,536	)
Repayment of long-term bank loans		(342,423	)			(35,634	)			(63,700	)
Proceeds from long-term bank loans		689,955				83,145				291,470
Advances from shareholders		—				562,247				—
Repayment to shareholders		(475,940	)			—				(926,771	)
Proceeds from issuance of ordinary shares upon initial public offering, net of underwriting commissions, discounts and other offering costs of $949,205		7,028,258				—				—
Capital contribution from shareholders		—				690,878				1,970,098
Deferred IPO costs		—				(216,998	)			(707,233	)
Net cash provided by financing activities		10,791,527				1,436,725				1,616,038
Net increase (decrease) in cash and cash equivalents		1,733,178				(89,509	)			(531,714	)
Effect of foreign currency translation on cash and cash equivalents		43,444				(7,933	)			(14,106	)
Cash and cash equivalents at beginning of year		108,745				206,187				752,007
Cash and cash equivalents at end of year	$	1,885,367			$	108,745			$	206,187
Supplemental cash flow information:
Income taxes paid	$	12,901			$	—			$	13,230
Interest paid	$	128,253			$	100,563			$	57,941
Listing fee paid	$	—			$	277,523			$	659,606
Deferred IPO costs charged against additional paid-in capital	$	909,557			$	—			$	—
Supplemental disclosure of non-cash activities:
Operating lease right-of-use asset obtained in exchange for operating lease liability	$	415,561			$	—			$	497,325
Property and equipment acquired under installment financing arrangement secured by the related asset	$	52,085			$	—			$	—