EX-99.1 2 ea153035ex99-1_mingzhulogi.htm PRESS RELEASE

Exhibit 99.1

 

Mingzhu Announces Unaudited Financial Results for the Six Months Ended June 30, 2021

 

SHENZHEN, China, December 23, 2021 – MingZhu Logistics Holdings Limited ("MingZhu" or the "Company") (NASDAQ: YGMZ), an elite provider of logistics and transportation services to businesses, today announced its financial results for the six months ended June 30, 2021.

 

Mr. Jinlong, CEO of MingZhu, commented, “We ended the first half of 2021 in a stronger financial position, with 8.2% year over year revenue growth, a 15% improvement in gross profit, and a 24% improvement in operating income. We have been successfully executing on multiple fronts, while continuing to navigate the challenged COVID-19 environment. Of note, we have shuttered our Xinjiang operation and shifted to an asset-light strategy.”

 

Mr. Jinlong, CEO of MingZhu, continued, “We continue to make significant progress in our business diversification strategy, including recent announcements of non-binding memorandums of understanding with Damo Electric Truck, and Xinjiang Feipeng Logistics Co. Ltd., and a major cooperation agreement with China Merchants Logistics Group Urumqi Limited. We are actively evaluating market opportunities that can serve as natural extensions of our business and be totally additive from both a revenue and profitability standpoint. A great example of this is the recent announcement of our expansion into the commercial liquor distribution market given its compelling synergies and adjacency to our existing business. Taken together, we are optimistic in our outlook and excited about the opportunities in front of us, as we focus on unlocking additional value for the company and shareholders.”

 

Financial Results for the Six Months Ended June 30, 2021

 

Revenue for the six months ended June 30, 2021, increased by $0.7 million, or 8.2%, to $9.6 million from $8.9 million for the same period of last year. This increase was mainly attributable to growth of the Company’s subcontracting business.

 

Gross profit increased by $0.2 million, or 15.0%, to $1.4 million for the six months ended June 30, 2021, from $1.2 million for the same period of last year. Gross margin increased by 0.8 percentage points to 14.3% for the six months ended June 30, 2021, from 13.5% for the same period of last year. The gross margin increase was primarily due to an improvement in the profitability of the Company’s self-owned vehicle business.

 

General and administrative expenses increased by $352,270, or 61.0%, to $932,409 for the six months ended June 30, 2021, from $579,139 for the same period of last year. The increase was primarily due to the increase of professional fees. Provision for doubtful accounts decreased by $261,702, or 100%, to $nil for the six months ended June 30, 2021, from $261,702 for the same period of last year. The collection of accounts receivables was back to normal, and the Company did not record any provision for doubtful accounts for the first half of 2021. Total operating expenses increased by $0.6 million, or 7.6%, to $9.2 million for the six months ended June 30, 2021, from $8.6 million for the same period of last year.

 

Operating income increased by $74,926, or 24.0%, to $386,940 for the six months ended June 30, 2021, from $312,014 for the same period of last year. Operating margin was 4.0% for the six months ended June 30, 2021, compared to 3.5% for the same period of last year. Net loss for the first six months ended June 30, 2021, was $355,744, as compared to net income of $106,698 for the same period of last year.

 

Balance Sheet and Cash Flow

 

As of June 30, 2021, the Company had a balance of cash and restricted cash of $14.2 million compared to $11.6 million at December 31, 2020. Accounts receivable were $2.5 million as of June 30, 2021, compared to $5.3 million as of December 31, 2020. The decrease of accounts receivable was due to the improvement of collection from large customers. The balance of prepayment to suppliers totaled $6.0 million as of June 30, 2021, compared to $1.1 million as of December 31, 2020, reflecting increased demands from the Company’s subcontractors. Total working capital was $31.6 million as of June 30, 2021, compared to $17.7 million at December 31, 2020.

 

 

 

 

Net cash used in operating activities was $5.0 million for the six months ended June 30, 2021, compared to net cash provided by operating activities of $1.5 million for the same period of last year. This was primarily due to the increase in payment in advance to suppliers. Net cash used in investing activities was $57,204 for the six months ended June 30, 2021, compared to $136,964 for the same period of last year. Net cash provided by financing activities was $7,653,904 for the six months ended June 30, 2021, compared to net cash used in by financing activities of $1.2 million for the same period of last year. This was primarily due to the proceeds from public offerings and the bank borrowings.

 

About MingZhu Logistics Holdings Limited (NASDAQ: YGMZ)

Established in 2002 and headquartered in Shenzhen, China, MingZhu Logistics Holdings Limited is a 4A-rated professional trucking service provider. Based on the Company’s regional logistics terminals in Guangdong Province and Xinjiang Autonomous Region, MingZhu Logistics Holdings offers tailored solutions to our clients to deliver their goods through our network density and broad geographic coverage across the country by a combination of self-owned fleets tractors and trailers and subcontractors’ fleets. For more information, please visit ir.szygmz.com.

 

Forward-Looking Statements

The statements in this press release regarding the Company's future expectations, plans and prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding plans, goals, objectives, strategies, future events, expected performance, assumptions and any other statements of fact that have not occurred. Any statements that contain the words “may”, “will”, “want”, “should”, “believe”, “expect”, “anticipate”, “estimate”, “calculate” or similar statements that are not factual in nature are to be considered forward-looking statements. Actual results may differ materially from historical results or from those expressed in these forward-looking statements as a result of a variety of factors. These factors include, but are not limited to, the Company's strategic objectives, the Company's future plans, market demand and user acceptance of the Company's products or services, technological advances, economic trends, the growth of the trucking services market in China, the Company's reputation and brand, the impact of industry competition and bidding, relevant policies and regulations, fluctuations in China's macroeconomic conditions, and the risks and assumptions disclosed in the Company's reports provided to the CSRC (China Security Regulatory Commission) For these and other related reasons, we advise investors not to place any reliance on these forward-looking statements, and we urge investors to review the Company's relevant SEC filings for additional factors that may affect the Company's future results of operations. The Company undertakes no obligation to publicly revise these forward-looking statements subsequent to the filing of these documents as a result of changes in particular events or circumstances. 

 

For further information, please contact:

 

MingZhu Logistics Holdings Limited

 

Jingwei Zhang

Email: company@szygmz.com

Phone: +86 186-5937-1270

 

Investor Relations

 

David Pasquale

Global IR Partners

Email: YGMZ@globalirpartners.com

Phone: +1-914-337-8801

 

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MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   As of
June 30,
2021		   As of
December 31,
2020		 
    USD    USD 
    (Unaudited)      
ASSETS          
CURRENT ASSETS          
Cash  $4,693,923   $2,105,625 
Restricted cash   9,500,000    9,500,000 
Financial assets held for trading   77,440    - 
Accounts receivable, net   2,506,448    5,343,716 
Operating supplies   81,453    - 
Prepayments   6,048,877    1,059,335 
Other receivables   17,412,942    11,448,022 
Amount due from related parties   1,503,948    741,340 
Total Current Assets   41,825,031    30,198,038 
           
PROPERTY AND EQUIPMENT, NET   2,884,414    3,448,109 
           
OTHER ASSETS          
Deferred tax assets   -    31,852 
Deposits   269,303    261,992 
Total other assets   269,303    293,844 
Total assets  $44,978,748   $33,939,991 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES:          
Short-term bank borrowings  $5,761,546   $6,551,724 
Accounts payable   652,191    1,415,591 
Other payables and accrued liabilities   2,295,515    531,120 
Amount due to related parties   144,496    993,846 
Tax payable   1,172,496    2,722,409 
Current portion of capital lease and financing obligations   65,191    51,135 
Current maturities of loans from other financial institutions   183,285    235,487 
Total current liabilities   10,274,720    12,501,312 
           
OTHER LIABILITIES          
Long-term loans from other financial institutions   31,531    136,400 
Long-term portion of capital lease and financing obligations   85,780    27,989 
Total other liabilities   117,311    164,389 
Total liabilities   10,392,031    12,665,701 
           
COMMITMENTS AND CONTINGENCIES          
           
SHAREHOLDERS’ EQUITY          
Ordinary shares: $0.001 par value, 50,000,000 shares authorized, 15,687,375 and 12,354,040 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively. *   15,687    12,354 
Share subscription receivables   (847,086)   (847,086)
Additional paid-in capital   27,883,950    13,824,820 
Statutory reserves   910,093    877,886 
Retained earnings   6,517,767    6,905,718 
Accumulated other comprehensive (loss) income   106,306    500,598)
Total shareholders’ equity   34,586,717    21,274,290 
Total liabilities and shareholders’ equity  $44,978,748   $33,939,991 

 

* Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.

 

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MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

 

   For the Six Months Ended June 30, 
   2020   2019 
   USD   USD 
REVENUES  $9,602,080   $8,872,972 
           
COSTS AND EXPENSES          
Transportation costs   8,229,288    7,678,741 
General and administrative expenses   932,409    579,139 
Provision for doubtful accounts   -    261,702 
Sales and marketing expenses   53,443    41,376 
Total costs and expenses   9,215,140    8,560,958 
           
INCOME FROM OPERATIONS   386,940    312,014 
           
OTHER (EXPENSES) INCOME          
Interest expenses   (235,268)   (210,887)
Other expenses   (657,745)   - 
Other income   191,048    109,623 
Total other expenses, net   (701,965)   (101,264)
           
(LOSS) INCOME BEFORE INCOME TAXES   (315,025)   210,750 
           
PROVISION FOR INCOME TAXES   40,719    104,052 
           
NET INCOME   (355,744)   106,698 
           
OTHER COMPREHENSIVE (LOSS) INCOME          
Foreign currency translation adjustment   (394,292)   (62,324)
COMPREHENSIVE INCOME  $(750,036)  $44,374 
           
Weighted average shares used in computation:          
Basic*   14,387,374    9,000,000 
Diluted*   15,985,367    9,000,000 
           
(LOSS) EARNINGS PER SHARE - BASIC*  $(0.02)  $0.01 
(LOSS) EARNINGS PER SHARE - DILUTED*  $(0.02)  $0.01 

 

* Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.

 

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MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

           Share   Additional   Retained Earnings   Accumulated Other Comprehensive     
   Shares*   Amount   Subscription
Receivables		   Paid-in
Capital		   Statutory
Reserve		   Unrestricted   Income
(Loss)		   Total 
       USD   USD   USD   USD   USD   USD   USD 
BALANCE, December 31, 2020   12,354,040   $12,354   $(847,086)  $13,824,820   $877,886   $6,905,718   $500,598   $21,274,290 
                                         
Net income (loss) for the period   -    -    -    -    -    (355,744)   -    (355,744)
Foreign currency translation adjustment   -    -    -    -    -    -    (394,292)   (394,292)
Appropriation to statutory reserve   -    -    -    -    32,207    (32,207)   -    - 
Issuance of shares through public offering   3,333,335    3,333    -    14,059,130    -    -    -    14,062,463 
                                         
BALANCE, June 30, 2021   15,687,375   $15,687   $(847,086)  $27,883,950   $910,093   $6,517,767   $106,306   $34,586,717 

 

 

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MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For the Six Months Ended June 30, 
   2021   2020 
   USD   USD 
Cash flows from operating activities:        
Net (loss) income  $(355,744)  $106,698 
Adjustments to reconcile net income to net cash provided by operating activities:          
(Gain) Loss on disposals of equipment   (5,532)   2,721 
Provision for doubtful accounts   -    263,003 
Amortization of deferred financing fees   57,199    34,911 
Depreciation for property and equipment   747,316    835,463 
Deferred income tax expenses   32,122    (76,596)
Changes in operating assets and liabilities          
Accounts receivable   3,051,083    4,306,728 
Operating supplies   (81,282)   - 
Prepayments   (9,370,842)   (517,693)
Other receivables   (5,888,995)   (3,243,964)
Deposits   (4,031)   (3,709)
Accounts payable   (776,760)   (75,447)
Other payables and accrued liabilities   9,129,748    (366,206)
Tax payables   (1,558,220)   217,752 
Net cash (used in) provided by operating activities   (5,023,938)   1,483,661 
           
Cash flows from investing activities:          
Purchases of equipment   (57,204)   (136,964)
Net cash used by investing activities   (57,204)   (136,964)
           
Cash flows from financing activities:          
Proceeds from short-term bank borrowings   4,327,532    796,337 
Repayment of short-term bank borrowings   (5,185,311)   (1,172,663)
Repayment of long-term bank borrowings   -    (85,322)
Repayments of loans from other financial institutions   -    (8,871)
Repayments of obligations under capital leases   (236,116)   (852,718)
Amounts advanced from related parties   4,158,734    5,195,613 
Repayments to related parties   (13,885,698)   (5,083,005)
Proceeds from public offerings   18,474,763    - 
Net cash provided by (used in) in financing activities   7,653,904    (1,210,629)
           
Effect of exchange rate change on cash   15,536    (6,310)
           
Net increase in cash and restricted cash   2,588,298    129,758 
Cash and restricted cash at beginning of the period   11,605,625    223,507 
Cash and restricted cash at end of the period  $14,193,923   $353,265 
           
Supplemental disclosure of cash flow information:          
Interest paid  $200,435   $154,324 
Income tax paid  $990,349   $74,889 
           
Supplemental non-cash investing and financing information:          
Non-cash capital leases to acquire revenue equipment  $(118,883)  $(23,649)
Uncollected receivable from disposal of revenue equipment  $9,221   $- 
Professional fees paid by related parties   -    143,862 
           
Reconciliation to amounts on consolidated balance sheets:          
Cash  $4,693,923   $353,265 
Restricted cash   9,500,000    - 
Total cash  $14,193,923   $353,265 

 

 

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