Company: VSA
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001410578-25-001300
Chunk: 172

Company: VisionSys AI Inc
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 172
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 was more likely than not that the tax loss will be utilized within the corresponding deduction period.

97

The effective income tax rate of -55.3% in 2023 was lower than the statutory income tax rate of 25.0% primarily because of the impact of the reversal of valuation allowances for deferred income tax assets of certain subsidiary, which was making profit in 2023. Considering that the future profitability of the STEM education business is likely to offset some of the accumulated losses already incurred, a portion of the valuation allowance for deferred tax assets of most STEM education business entities was released in 2023, which was partially offset by the impact of non-deductible expenses.
The effective income tax rate of 87.6% in 2022 was higher than the statutory income tax rate of 25.0% primarily because of (i) the impact of the non-deductible investment loss; and (ii) reversal of valuation allowances for deferred income tax assets of certain subsidiaries, which were expected to make profits in future. Considering that the future profitability of the STEM education business is likely to offset some of the accumulated losses already incurred, a portion of the valuation allowance for deferred tax assets of STEM education business entities was released in 2022.
Net Income (Loss) from Continuing Operations
As a result of the foregoing, we incurred a net income from continuing operations of RMB22.3 million (US$3.1 million) in 2023 as compared to a net loss for continuing operations of RMB2.1 million in 2022.
Impact of Foreign Currency Fluctuation
See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment.” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Foreign Exchange Risk.”
Impact of Governmental Policies
See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China” and “Item 4. Information on the Company—B. Business Overview—Government Regulations.”

B.   Liquidity and Capital Resources
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Cash Flows and Working Capital
Our principal sources of liquidity have been cash generated from operating activities and proceeds from bank borrowings. As of December 31, 2024, we had RMB46.5 million (US$6.4 million) in cash and cash equivalents, time deposits