Revenue growth has stalled at -0.16% year-over-year, while a narrow operating margin of 8.43% indicates limited ability to leverage fixed costs against its $36.5 million revenue base.
| Metric | Mar'25 | Mar'24 | Mar'23 | Mar'22 |
|---|
| Sales/Revenue | 36.54M | 36.6M | 13.07M | 949.34K |
| Revenue Growth % | -0.16% | 180.01% | 1276.81% | - |
| Cost of Goods Sold | 26.96M | 28.64M | 9.72M | 473.88K |
| COGS % of Revenue | 73.8% | 78.25% | 74.33% | 49.92% |
| Gross Profit | 9.58M | 7.96M | 3.35M | 475.46K |
| Gross Margin % | 26.2% | 21.75% | 25.67% | 50.08% |
| Gross Profit Growth % | 20.26% | 137.31% | 605.63% | - |
| Operating Expenses | 6.5M | 4.98M | 1.52M | 940.07K |
| OpEx % of Revenue | 17.78% | 13.6% | 11.65% | 99.02% |
| Selling, General & Admin | 3.03M | 2.69M | 1.07M | 466.17K |
| SG&A % of Revenue | 8.3% | 7.36% | 8.21% | 49.1% |
| Research & Development | 3.46M | 2.29M | 449.83K | 473.89K |
| R&D % of Revenue | 9.48% | 6.25% | 3.44% | 49.92% |
| Other Operating Expenses | 0 | 0 | 0 | 0 |
| Operating Income | 3.08M | 2.98M | 1.83M | -464.61K |
| Operating Margin % | 8.43% | 8.15% | 14.02% | -48.94% |
| Operating Income Growth % | 3.23% | 62.79% | 494.38% | - |
| EBITDA | 3.39M | 3.13M | 1.85M | -380.85K |
| EBITDA Margin % | 9.27% | 8.54% | 14.15% | -40.12% |
| EBITDA Growth % | 8.33% | 68.97% | 585.77% | - |
| D&A (Non-Cash Add-back) | 307.23K | 143.12K | 17.76K | 83.75K |
| EBIT | 3.26M | 2.99M | 1.9M | -455.35K |
| Net Interest Income | -101.44K | -57.24K | -59.9K | -67.73K |
| Interest Income | 270 | 696 | 347 | 286 |
| Interest Expense | 101.71K | 57.94K | 60.24K | 68.02K |
| Other Income/Expense | 78.79K | -55.41K | 8.05K | -58.77K |
| Pretax Income | 3.16M | 2.93M | 1.84M | -523.38K |
| Pretax Margin % | 8.64% | 8% | 14.08% | -55.13% |
| Income Tax | -24.61K | 109.62K | 230.3K | -132.29K |
| Effective Tax Rate % | -0.78% | 3.74% | 12.51% | 25.28% |
| Net Income | 3.12M | 2.82M | 1.61M | -391.08K |
| Net Margin % | 8.55% | 7.7% | 12.32% | -41.2% |
| Net Income Growth % | 10.89% | 75.01% | 511.71% | - |
| Net Income (Continuing) | 3.18M | 2.82M | 1.61M | -391.09K |
| Discontinued Operations | 0 | 0 | 0 | 0 |
| Minority Interest | 57.75K | -150 | -61 | -6 |
| EPS (Diluted) | 0.00 | 0.90 | 0.52 | -0.12 |
| EPS Growth % | -100% | 75.16% | 512.82% | - |
| EPS (Basic) | 0.00 | 0.90 | 0.52 | -0.12 |
| Diluted Shares Outstanding | 3.13M | 3.13M | 3.13M | 3.13M |
| Basic Shares Outstanding | 3.13M | 3.13M | 3.13M | 3.13M |
| Dividend Payout Ratio | - | - | - | - |
Severe liquidity and collection risk
As indicated by recent financial disclosures, LHSW's revenue growth has stalled at -0.16% year-over-year, suggesting the company is struggling to capture additional market share within the competitive Chinese electronics manufacturing sector while facing significant headwinds from the cyclical nature of industrial capital expenditure projects.
The lack of top-line expansion implies that the company's niche integration services may have reached a saturation point within its primary manufacturing hubs. Investors should monitor whether this stagnation reflects a broader loss of competitive relevance against larger, better-capitalized hardware incumbents.
Based on reported figures, the company maintains a gross margin of 26.20%, which appears to reflect its role as a value-added integrator rather than a high-margin software developer, leaving the firm with limited buffer against potential input cost volatility in the semiconductor and optical sensor markets.
This narrow margin profile suggests that LHSW lacks the structural pricing power necessary to defend its profitability during periods of industrial downturn. The proximity of the operating margin to the gross margin indicates that fixed costs, particularly technical labor, exert significant pressure on the bottom line.
According to the company's financial statements, the narrow spread between gross and operating margins of 8.43% suggests that LHSW is unable to achieve meaningful operating leverage, as fixed overhead costs continue to consume the majority of the gross profit generated from its project-based revenue model.
The inability to scale operating income faster than gross profit indicates that the company's current cost structure is highly rigid. This lack of efficiency may necessitate a fundamental shift in the business model to reduce reliance on high-touch, low-margin integration services.
As highlighted by the extreme disparity between $36.5 million in revenue and a mere $108,745 in cash reserves, the quality of reported earnings appears highly questionable, raising concerns that revenue recognition may be significantly decoupled from actual cash collection and operational liquidity.
The minimal cash position relative to total revenue suggests that the company may be facing severe working capital constraints or issues with long-term receivables. This liquidity profile warrants further investigation into the company's ability to fund ongoing operations without resorting to dilutive external financing.
Quick answers to the most common questions about buying LHSW stock.
For fiscal year 2025, Lianhe Sowell International Group Ltd Ordinary Shares (LHSW) reported total revenue of $36.5M. This represents a 3749.0% increase compared to $0.9M in 2022.
Lianhe Sowell International Group Ltd Ordinary Shares (LHSW) is profitable, generating $3.1M in net income for the fiscal year ending 2025 with a net profit margin of 8.6%.
Lianhe Sowell International Group Ltd Ordinary Shares (LHSW) reported an operating income of $3.1M, resulting in an operating profit margin of 8.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Lianhe Sowell International Group Ltd Ordinary Shares (LHSW) generated $9.6M in gross profit for the year, representing a gross profit margin of 26.2%. This demonstrates the company's core pricing power and production efficiency.