YSXT YSX Tech Company Ltd

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,
	2024			2023		Variances
In USD Millions, except percentages	Amount			Amount			%
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