We, through the YSX Operating Companies, provide comprehensive business solutions to enterprise customers, mainly insurance companies and brokerages, in China. The YSX Operating Companies possess in-depth knowledge of the Chinese insurance industry accumulated from years of servicing their customers, and specialize in auto insurance aftermarket value-added services, software development and information technology services, as well as other scenario-based customized services, such as customer development services. For the fiscal years ended March 31, 2024 and 2023, the YSX Operating Companies serviced a total of 49 and 52 customers, respectively, among which, 25 and 36 were insurance companies or brokerages, and the rest were technology companies, manufacturing companies and trade companies. Some of the customers are well-known established companies in China, such as PICC Property and Casualty Company Limited (“PICC”), China Ping An Property Insurance Co., Ltd (“Ping An”), CPIC (China Pacific Insurance (Group) Co Ltd (“CPIC”), and China United Insurance Group Company Ltd (“CUIG”). Currently, the YSX Operating Companies primarily operate in Xinjiang Province and Guangdong Province in China, where the majority of their customers are located. We generated $58,546,729 and $49,233,547 in total revenue for the fiscal years 2024 and 2023, respectively, predominantly from providing enterprise customers auto insurance aftermarket value-added services, which accounted for 77.8% and 86.2% of our total revenue in the same periods, respectively. Insurance companies and brokerages offer auto insurance aftermarket value-added services, such as car wash, oil change, tire repair, car detailing, and roadside assistance services, to their insurance customers with the aim of building customer loyalty and maintaining long-term customer relations, and the costs of the value-added services are usually budgeted as a portion of marketing expenses. Currently, the YSX Operating Companies offer various auto insurance aftermarket value-added services to the enterprise customers, and collaborate with third-party vendors, such as automobile service platforms, dealerships, brick-and-mortar service and maintenance shops, to perform these services for the insurance customers, who are typically insurance policy holders. Auto insurance in China includes compulsory motor vehicle liability insurance and commercial insurance. According to the China Banking and Insurance Regulatory Commission, along with the growth of the car ownership, the annual total premiums of Chinese auto insurance has been growing steadily for the last 20 years. Auto insurance was the largest category of property insurance by total premiums in China, reaching RMB 867 billion (approximately US $12.06 billion), an increase of 5.6% compared to 2022, and accounted for 54.66% of the total premiums of property insurance in 2023. As the largest passenger vehicle market in the world, according to China Banking and Insurance Regulatory Commission, the amount of car ownership generates substantial market potential for China’s auto insurance market, which is closely related to the auto insurance aftermarket value-added service market. We believe the foregoing has contributed, and will continue to contribute, to the growth of the auto insurance aftermarket value-added service market and our business. Our revenues increased by $9,313,182, or 18.9%, from $49,233,547 for the fiscal year ended March 31, 2023 to $58,546,729 for the fiscal year ended March 31, 2024. The increase was mainly due to the increase in revenue generated from the auto insurance aftermarket value-added services, as the YSX Operating Companies increased the service volume by approximately 37.0% from fiscal year 2023. The following table illustrates the amount and percentage of our revenue by service type for for the years ended March 31, 2024 and 2023, respectively: For the years ended March 31, 2024 2023 Variance Amount % Amount % Amount % Revenue from auto insurance aftermarket value-added services $ 45,561,529 77.8 % $ 42,438,636 86.2 % $ 3,122,893 7.4 % Revenue from other scenario-based customized services 11,764,389 20.1 % 3,537,667 7.2 % 8,226,722 232.5 % Revenue from software development and information technology services 1,220,811 2.1 % 3,257,244 6.6 % (2,036,433 ) (62.5 )% Total revenue $ 58,546,729 100.0 % $ 49,233,547 100.0 % $ 9,313,182 18.9 % We believe the strong technical capabilities of the YSX Operating Companies has helped drive the revenue growth of the Company. Xinjiang YSX started as a technology company and developed insurance sales and order management applications that became popular among Chinese insurance companies and brokerages in 2017 and 2018, when the majority of these companies did not have in-house insurance sales and management applications. Since then, the YSX Operating Companies have developed long-term business relationships with a number of insurance companies and brokerages. In 2018, grasping the opportunity arising from the expansion of the auto insurance aftermarket service market and the growing needs of insurance companies and brokerages for qualified service providers, the YSX Operating Companies ventured into the auto insurance aftermarket service business. To streamline the process of auto insurance aftermarket value-added services, the YSX Operating Companies developed “Driver’s Suite”, an in-house system that facilitates the entire process of the auto insurance aftermarket value-added services. We believe “Driver’s Suite” greatly enhances the service quality and improves the efficiency of the service process. As of the date of this prospectus, the YSX Operating Companies’ have 8 full-time employees in the in-house technical team, which oversees the development and maintenance of in-house technical systems and applications. We are led by a highly experienced management team. Since the inception of each of the YSX Operating Companies, they have developed and benefited from the long-term business planning by the founders and the management. Xinjiang YSX and two of its wholly owned subsidiaries enjoy generous tax incentives (full corporate income tax exemption for 5 years after inception, and partial corporate income tax reduction of 10% to 15% thereafter, as an incentive to attract enterprises to establish their business operations in such region and to stimulate local economic development) by incorporating in the Kashgar Economic Development Zone, which is a special economic zone in Xinjiang Province. The management strategically chose Guangzhou Province, which, according to the China Banking and Insurance Regulatory Commission, was the No.1 province in terms of the total insurance premiums generated in China in 2022, as their principal market. For the fiscal years 2024 and 2023, 92% and 86% of our total revenue was generated in Guangzhou Province, respectively. Going forward, the YSX Operating Companies plan to strategically expand operations in the major cities, both in the Guangdong Province and a few selected provinces of favorable geographic locations. To that end, beginning in 2021, the YSX Operating Companies started cooperating with local business partners in Yunnan Province, Chongqing, Guizhou Province, and Sichuan Province, all of which are geographically located between Guangdong Province and Xinjiang Province. This expansion strategy allows the YSX Operating Companies to take advantage of existing resources, while avoiding the large initial capital outlay. Our principal executive offices are located at 401, Floor 4, Building 12, No. 1601, South Guangzhou Avenue, Haizhu District, Guangzhou, PRC, and our phone number is (86) 020-29842002. Our registered office in the Cayman Islands is located at 3-212 Governors Square, 23 Lime Tree Bay Avenue, P.O. Box 30746, Seven Mile Beach, Grand Cayman KY1-1203, Cayman Islands. Our agent for service of process in the U.S. is Cogency Global Inc., located at 122 East 42nd St, 18th Floor, New York, NY.
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