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YSX TECH. CO. LTD Announces Unaudited Financial Results for the Six Months Ended September 30, 2024

1. Revenue up 28.7% to $34.1M. Insurer contracts expand. 2. Vehicle risk screening soared 879.2% from $2.6M to $25.4M. Demand surged. 3. Service volume up 59.7%. Gross margin dropped to 10.6% amid pricing pressure. 4. Net income fell 22% to $1.9M. CEO cites pricing dynamics.

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FAQ

Why Neutral?

While strong top-line growth and service volume expansion are promising, margin compression and declining net income temper immediate investor enthusiasm. Historical cases show that impressive revenue gains can be offset by profitability issues until strategic pricing adjustments take effect.

How important is it?

The mixed results—with robust revenue growth but pressured margins and lower net income—make this update material, though investors will watch for margin recovery. Its direct impact on investor sentiment and trading activities is significant but not overwhelmingly conclusive.

Why Long Term?

The company's ongoing geographic expansion and planned pricing strategy improvements suggest that benefits will materialize over time despite short-term earnings softness. Previous industry shifts indicate that sustainable improvements often take time to reflect positively on stock performance.

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February 24, 2025 08:30 ET  | Source: YSX Tech Co., Ltd GUANGZHOU, China, Feb. 24, 2025 (GLOBE NEWSWIRE) -- YSX TECH. CO., LTD (the “Company” or “YSXT”), a Cayman Islands exempted company that, through its variable interest entities in China, provides comprehensive business solutions mainly for insurance companies and brokerages in China, today announced its unaudited financial results for the six months ended September 30, 2024. Key highlights Total revenue increased by approximate $7.6 million, or 28.7%, to approximately $34.1 million for the six months ended September 30, 2024, from $26.5 million during the same period in 2023.Revenue from auto insurance aftermarket value-added services increased by 31.8% from approximately $21.4 million to $28.2 million, which was mainly due to 879.2% revenue increase of vehicle driving risk screening services, from approximately $2.6 million to $25.4 million for the six months ended September 30, 2024.Total number of value-added services performed (service volume) increased by 59.7% to approximately 2.1 million for the six months ended September 30, 2024 from the same period in 2023.Gross profit increased by 6.6% to approximately $3.6 million for the six months ended September 30, 2024 from the same period in 2023, but gross margin declined to 10.6% from 12.7%.Net income declined by approximately $0.6 million, or 22.0%, to approximately $1.9 million for the six months ended September 30, 2024 from $2.5 million in 2023. Mr. Jie Xiao, CEO of YSX TECH CO. LTD, stated: “We are pleased with our revenue growth, which has highlighted the rising demand for our services and our ability to expand market share. However, profitability was impacted by changes in our customer mix and pricing dynamics. As we continue expanding geographically and diversifying our services, we plan to implement measures refining our pricing strategies to address these challenges and improve margins.” “We expect continued revenue growth in the near future, supported by rising demand for our services, and we will continue optimizing our service mix, improving cost efficiencies, in order to keep pursuing sustainable long-term growth. The Company will provide further details about its financial results in its upcoming earnings announcement.” Unaudited Financial Results for the Six Months Ended September 30, 2024  For the six months ended September 30, 20242023VariancesIn USD Millions, except percentagesAmountAmount%Total revenue 34.1  26.5 28.7% Total cost of revenue 30.5  23.1 31.9% Gross profit 3.6  3.4 6.6% Income from operations 2.4  2.8 (16.4)% Net income$1.9 $2.5 (22.0)%            Total revenue increased by approximate $7.6 million, or 28.7%, to approximately $34.1 million for the six months ended September 30, 2024, from $26.5 million during the same period in 2023. The increase was primarily due to the Company having obtained more service contracts from various insurance companies and brokerages. Revenue from auto insurance aftermarket value-added services grew by approximately $6.8 million, or 31.8%, due to a significant 59.7% increase in the service volume of Auto Insurance Aftermarket Value-added Services, from approximately 1.3 million service calls in the six months ended September 30, 2023 to 2.1 million service calls in the six months ended September 30, 2024.Revenue from other scenario-based customized services grew by approximately $1.3 million, or 31.2%, driven by increased customer demand and higher average service prices.However, revenue from software development and information technology services decreased by approximately $0.5 million, or 63.5%, compared to the prior period, primarily due to decrease in the average service price the Company charged customers for such services. Cost of revenue increased by $7.4 million, or 31.9%, from $23.1 million in the six months ended September 30, 2023 to $30.5 million in the six months ended September 30, 2024, primarily due to the increased subcontract costs as a result of the service volume of car wash, car towing, vehicle inspection and maintenance services, etc. increasing by 59.7% from the six months ended September 30, 2023 to the six months ended September 30, 2024. Gross profit increased by 6.6% to approximately $3.6 million for the six months ended September 30, 2024 from the same period in 2023, but gross margin declined to 10.6% from 12.7%, reflecting pricing pressure on contracts with insurance brokerages. Total operating expenses increased by $0.7 million, or 121.8% from $0.6 million in the six months ended September 30, 2023 to $1.2 million in the six months ended September 30, 2024, primarily driven by increases in selling expenses, general and administrative expenses and research and development expenses. Net income declined by approximately $0.6 million, or 22.0%, to approximately $1.9 million for the six months ended September 30, 2024 from $2.5 million in 2023, due to reduced gross margin and higher operational expenses. Cash and cash equivalents was approximately $5.4 million as of September 30, 2024, as compared to approximately $4.3 million as of March 31, 2024. About YSX TECH. CO., LTD Primarily operating in Xinjiang and Guangdong provinces, YSX TECH. CO., LTD is a Cayman Islands exempted company that, through its variable interest entities in China, provides comprehensive business solutions mainly for insurance companies and brokerages in China. The Company possesses in-depth knowledge of the Chinese insurance industry accumulated from years of servicing customers, and specializes in auto insurance aftermarket value-added services, software development and information technology services, as well as other scenario-based customized services, such as products and customer development services. For more information please visit: https://ir.ysxtechcay.com and https://www.ysxnet.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” 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 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: At the Companymarketing@ysxnet.com+86 (20) 2984 2002 Investor RelationsWFS Investor Relations Inc.Janice WangEmail: services@wealthfsllc.comPhone: +86 13811768599+1 628 283 9214 YSX TECH CO. LTD. AND SUBSIDIARIESUNAUDITED CONSOLIDATED BALANCE SHEETS          As of  September 30, 2024 March 31, 2024  (Unaudited)   ASSETS      CURRENT ASSETS      Cash $5,444,920  $4,283,794 Short-term investment  437,115   2,103,762 Accounts receivable, net of $657,014 and $382,731, respectively  9,858,094   9,163,752 Accounts receivable, related parties  4,024,951   2,871,872 Advances to vendors  10,690,258   8,123,120 Due from related parties  —   2,197 Deferred initial public offering costs  153,987   118,103 Other current assets  757,038   848,185 TOTAL CURRENT ASSETS  31,366,363   27,514,785        Property and equipment, net  44,560   54,486 Right-of-use operating lease assets  190,240   224,835 Deferred tax assets  116,609   76,821 TOTAL NONCURRENT ASSETS  351,409   356,142 TOTAL ASSETS $31,717,772  $27,870,927        LIABILITIES AND SHAREHOLDERS’ EQUITY      CURRENT LIABILITIES      Short-term bank loans $1,635,887  $1,563,452 Current portion of long-term loans  142,499   138,481 Accounts payable  1,845,371   1,525,192 Deferred revenue  8,010   14,099 Taxes payable  3,110,014   2,579,976 Due to related parties  562,644   417,557 Operating lease liabilities, current  91,387   83,477 Accrued expenses and other current liabilities  1,257,021   883,805 TOTAL CURRENT LIABILITIES  8,652,833   7,206,039        Operating lease liabilities, non-current  118,076   160,706 Long-term loans  427,497   484,684 Long term loan, related party  1,353,739   1,384,811 TOTAL NONCURRENT LIABILITIES  1,899,312   2,030,201        TOTAL LIABILITIES  10,552,145   9,236,240        COMMITMENTS AND CONTINGENCIES             SHAREHOLDERS’ EQUITY      Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 22,000,000 shared issued and outstanding, including:*  —   — Class A ordinary shares, $0.0001 par value, 470,000,000 shares authorized, 20,822,675 shares issued and outstanding as of September 30, 2024 and March 31, 2024  2,082   2,082 Class B ordinary shares, $0.0001 par value, 30,000,000 shares authorized, 1,177,325 shares issued and outstanding as of September 30, 2024 and March 31, 2024  118   118 Additional paid-in capital  5,346,674   5,346,674 Statutory reserve  818,465   741,584 Retained earnings  15,570,667   13,720,353 Accumulated other comprehensive loss  (572,379)  (1,176,124)TOTAL SHAREHOLDERS’ EQUITY  21,165,627   18,634,687        TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $31,717,772  $27,870,927           YSX TECH CO. LTD. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME          For the Six Months ended September 30,  2024  2023 REVENUES:      Revenues $24,747,746  $22,199,058 Revenues, related parties  9,346,622   4,298,763 Total revenue  34,094,368   26,497,821        COST OF REVENUES:      Cost of revenues  30,493,854   19,362,131 Cost of revenues, related parties  —   3,757,075 Total cost of revenues  30,493,854   23,119,206 Gross profit  3,600,514   3,378,615        OPERATING EXPENSES:      Selling and marketing  66,471   57,991 General and administrative  1,064,198   400,617 Research and development  113,652   102,331 Total operating expenses  1,244,321   560,939        INCOME FROM OPERATIONS  2,356,193   2,817,676        OTHER INCOME (EXPENSES):      Interest expense  (62,438)  (50,324)Interest income  654   819 Investment income  20,282   13,731 Other income  64,598   181,885 Other non-operating expenses, net  (17,393)  (6,243)Total other income, net  5,703   139,868        INCOME BEFORE INCOME TAX PROVISION  2,361,896   2,957,544        PROVISION FOR INCOME TAXES  434,701   485,787        NET INCOME  1,927,195   2,471,757        OTHER COMPREHENSIVE INCOME      Foreign currency translation adjustment  603,745   (920,145)COMPREHENSIVE INCOME $2,530,940  $1,551,612        Earnings per ordinary share- basic and diluted $0.09  $0.11        Weighted average number of ordinary shares- basic and diluted  22,000,000   22,000,000          

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