Overview

On March 3, 2023, Tianci International Inc. (the “Company”) acquired ownership of RQS United Group Limited, a company organized under the laws of the Republic of Seychelles (“RQS United”). RQS United is a holding company that owns 90% of Roshing International Co., Limited, a Hong Kong-based company primarily engaged in logistics solutions, including shipping operation management.

The Company’s primary line of business is global logistics. Through its subsidiary Roshing, the Company provides global logistics services, including booking, transportation arrangement, and related logistics solutions. Roshing charters cargo space from shipping suppliers and sub-charters that space to its customers, as well as arranges the transportation of bulk goods. Roshing does not own or operate any transportation assets, instead adopting an asset-light strategy.

The Company’s performance and financial condition are affected by several key factors, including economic conditions in Hong Kong, the international trade environment, and the Company’s ability to source cargo space from vendors in a cost-efficient manner.

Results of Operations

Comparison of the three months ended January 31, 2025 and 2024:

Comparison of the six months ended January 31, 2025 and 2024:

Revenues

The Company’s revenue streams are primarily from global logistics services, which represented 99% and 95% of total revenue in the three and six months ended January 31, 2025, respectively. The decrease in revenue in the second quarter was due to a decline in order size from a major Vietnamese customer, but the Company managed to grow its logistics business by 20% in the six-month period.

Cost of Revenues and Gross Profit

The Company’s cost of revenues decreased by 22% in the three-month period and increased by 30% in the six-month period, in line with the changes in revenue. Gross profit margins declined from 11.7% and 13.6% in the three and six months ended January 31, 2024 to 3.9% and 6.1% in the same periods of 2025, as the Company adopted a customer-friendly pricing strategy to build market share.

Operating Expenses

Operating expenses increased in the six-month period due to higher general and administrative expenses, primarily from increased payroll expenses to support the expansion of the logistics operations. This was partially offset by a decrease in selling and marketing expenses.

Net Income (Loss)

The Company incurred net losses of $110,971 and $202,919 for the three and six months ended January 31, 2025, respectively, compared to net income of $100,714 and $94,602 in the same periods of 2024. The net losses were attributable to the shareholders of the Company.

Liquidity and Capital Resources

As of January 31, 2025, the Company had working capital of $585,435, with $180,554 in cash. The Company has financed its operations primarily through capital contributions and advances from shareholders, as well as private placements of securities. The Company believes its current liquidity and working capital will be sufficient to sustain its business operations for the next 12 months, but may need additional capital in the future for investment, acquisition, or capital expenditure opportunities.

Outlook

The Company’s logistics business has seen significant growth since 2023, and the management team’s expertise in the industry has been a key driver of this success. However, the Company faces challenges in maintaining profitability, as it has had to adopt a customer-friendly pricing strategy to build market share. Going forward, the Company plans to diversify its service region to include longer-distance shipping lines, which generally have higher profit margins. The Company’s ability to continue growing its logistics business and improve its profitability will be crucial to its future success.