Mingzhu Announces Unaudited Financial Results for the Six Months Ended June 30, 2022

SHENZHEN, China, Dec. 28, 2022 /PRNewswire/ — 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 period ended June 30, 2022.

Mr. Jinlong Yang, CEO of MingZhu, commented, “We ended the first half of 2022 in a stronger financial performance, with 528% year over year revenue growth, with positive net income of $0.07 per share compared to a loss in the year ago period.  We have been successfully executing on multiple fronts, while continuing to navigate the challenged COVID-19 environment. Of note, we have shifted to an asset-light strategy.”

Mr. Jinlong Yang, CEO of MingZhu, continued, “We continue to make significant progress in our business diversification strategy, including the successful acquisition of Yinhua (BVI) Limited (the “Yinhua”) in March 2022, that directly increased our revenue by $13 million for the six months ended June 30, 2022. We reentered the coal transportation market with our asset-light strategy during the first half year of 2022. We are aiming to further strengthen our market reach and extend our progress in the near future. Our team is confident that we can align our business direction and strategic objectives to achieve long-term stable and sustainable performance growth in the post-epidemic era.”

Financial Results for the Six Months Ended June 30, 2022

Revenue for the six months ended June 30, 2022, increased by $50.7 million, or 528.1%, to $60.3 million from $9.6 million for the same period of last year. This increase was mainly attributable to the acquisition of Cheyi (BVI) Limited (the “Cheyi”) and Yinhua.

General and administrative expenses increased by $158,001, or 16.9%, to $1,090,410 for the six months ended June 30, 2022, from $932,409 for the same period of last year. The increase was primarily due to the decrease of professional fees and the increase from two newly acquired businesses. Total operating expenses increased by $49.2 million, or 534.8%, to $58.4 million for the six months ended June 30, 2022, from $9.2 million for the same period of last year.

Net income increased by $2,000,827, or 562.4%, to $1,645,083 for the six months ended June 30, 2022, from a loss of $355,744 for the same period of last year. Net income margin was 2.7% for the six months ended June 30, 2022, compared to -3.7% for the same period of last year. The increase in net income was primarily due to the effect of our asset-light strategy and the acquisition of Cheyi and Yinhua.

Balance Sheet and Cash Flow

As of June 30, 2022, the Company had a balance of cash of $3.7 million compared to $5.8 million at December 31, 2021. The decrease was due to the cash payment made for the acquisition of Yinhua. Accounts receivable were $23.3 million as of June 30, 2022, compared to $3.7 million as of December 31, 2021. The increase of accounts receivable was mainly due to the acquisition of Yinhua, which had a significant expansion in second quarter of 2022. The balance of prepayment to suppliers was $4.4 million as of June 30, 2022, compared to $5.5 million as of December 31, 2021. The decrease was attributable to the Company’s partial retrieved payments back from suppliers. Loans receivable was increased by $12.9 million as the Company continue to build up strategic alliance as planned. Total working capital was $11.0 million as of June 30, 2022, compared to $5.3 million as of December 31, 2021.

Net cash used in operating activities was $4.0 million for the six months ended June 30, 2022, compared to net cash used in operating activities of $5.0 million for the same period of last year. The decrease was primarily due to the decrease in payment to suppliers. Resulting from the new purchases of equipment, net cash used in investing activities was increased from $57,204 for the six months ended June 30, 2021, to $932,790 for the six months ended June 30, 2022. Net cash provided by financing activities was $2.8 million for the six months ended June 30, 2022, compared to net cash provided by financing activities of $7.6 million for the same period of last year. This decrease was primarily due to the decrease in proceeds from equity financing activities and the loan from commercial banks.

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, 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.

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS







As of



As of


June30,

December31,

2022

2021



USD



USD




(Unaudited)





ASSETS







CURRENT ASSETS







Cash


$

3,710,346



$

5,752,117


Accounts receivable, net



23,309,930




3,650,005


Prepayments



4,393,454




5,473,938


Other receivables



1,497,652




1,540,044


Loans receivable*



35,398,123




22,487,767


Amount due from related parties



126,159




705,280


Total current assets



68,435,664




39,609,151











NON-CURRENT ASSET









Property and equipment, net



10,126,671




12,224,582


Deferred tax assets



60,289




35,491


Deposits



9,683,305




10,327,872


Goodwill



34,434,968




20,152,890


Total non-current asset



54,305,233




42,740,835


Total assets


$

122,740,897



$

82,349,986











LIABILITIES AND SHAREHOLDERS’ EQUITY









CURRENT LIABILITIES:









Short-term bank borrowings


$

9,445,666



$

7,579,324


Accounts payable



10,571,148




1,344,532


Other payables and accrued liabilities



28,528,141




19,269,124


Amount due to related parties



2,843,454




294,344


Tax payable



5,705,718




3,133,294


Current maturities of long-term bank borrowings



298,592




269,009


Current portion of capital lease and financing obligations



104,726




2,267,248


Current maturities of loans from other financial institutions






144,126


Total current liabilities



57,497,445




34,301,001











NON-CURRENT LIABILITIES









Long-term bank borrowings






179,339


Long-term portion of capital lease and financing obligations



525,516




200,712


Total non-current liabilities



525,516




380,051


Total liabilities



58,022,961




34,681,052











SHAREHOLDERS’ EQUITY









 Ordinary shares: $0.001 par value, 50,000,000 shares

authorized, 22,960,277 and 19,134,277 shares issued and

outstanding as of June 30, 2022 and December 31, 2021,

respectively**



22,960




19,134


Share subscription receivables



(847,086)




(847,086)


Additional paid-in capital



57,421,485




41,792,071


Statutory reserves



1,003,009




916,148


Retained earnings



7,487,265




5,929,043


Accumulated other comprehensive (loss) income



(369,697)




(140,376)


Total shareholders’ equity



64,717,936




47,668,934


Total liabilities and shareholders’ equity


$

122,740,897



$

82,349,986




 *

Loans receivable mainly comprise of interest-free advances to third parties as a result of strategic

business cooperation.

 **

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.

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)






For the Six Months Ended June 30,




2022



2021




USD



USD


REVENUES


$

60,330,761



$

9,602,080











COSTS AND EXPENSES









Transportation costs



17,953,860




8,229,288


Costs of rental services



24,962,970





Costs of insurance services



12,740,606





General and administrative expenses



1,090,410




932,409


Sales and marketing expenses



1,675,095




53,443


Total costs and expenses



58,422,941




9,215,140











INCOME FROM OPERATIONS



1,907,820




386,940











OTHER (EXPENSES) INCOME









Interest expenses



(652,372)




(235,268)


Other expenses



(358,267)




(657,745)


Other income



1,237,049




191,048


Total other income (expenses), net



226,410




(701,965)











INCOME (LOSS) BEFORE INCOME TAXES



2,134,230




(315,025)











PROVISION FOR INCOME TAXES



489,147




40,719











NET INCOME



1,645,083




(355,744)











OTHER COMPREHENSIVE (LOSS) INCOME









Foreign currency translation adjustment



(229,321)




(394,292)


COMPREHENSIVE INCOME


$

1,415,762



$

(750,036)











Weighted average shares used in computation:









Basic*



21,429,877




14,387,374


Diluted*



20,885,442




15,985,367











(LOSS) EARNINGS PER SHARE – BASIC*


$

0.07



$

(0.02)


(LOSS) EARNINGS PER SHARE – DILUTED*


$

0.07



$

(0.02)




*

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.

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)










Share



Additional








Accumulated

Other

Comprehensive







Shares*



Amount



Subscription



Paid-in



Statutory



Retained Earnings



Income



Total


Receivables

Capital

Reserve

(Loss)






USD



USD



USD



USD



USD



USD



USD


BALANCE,

December 31, 2021



19,134,277



$

19,134



$

(847,086)



$

41,792,071



$

916,148



$

5,929,043



$

(140,376)



$

47,668,934



































Net income (loss)

for the period


















1,645,083







1,645,083


Foreign currency

translation adjustment





















(229,321)




(229,321)


Appropriation to

statutory reserve















86,861




(86,861)








Issuance of shares

for acquisition



3,826,000




3,826







15,629,414













15,633,240



































BALANCE,

June 30, 2022



22,960,277



$

22,960



$

(847,086)



$

57,421,485



$

1,003,009



$

7,487,265



$

(369,697)



$

64,717,936


MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)




For the Six Months Ended June 30,



2022


2021



USD


USD

Cash flows from operating activities:





Net income (loss)


$

1,645,083


$

(355,744)

 Adjustments to reconcile net income to net cash provided (used in

by operating activities:







Gain on disposals of equipment





(5,532)

Amortization of deferred financing fees



26,607



57,199

Depreciation for property and equipment



3,441,564



747,316

Deferred income tax (benefit) expenses



(24,798)



32,122

Changes in operating assets and liabilities







Accounts receivable



(19,659,925)



3,051,083

Operating supplies





(81,282)

Prepayments



1,080,484



(9,370,842)

Other receivables



702,011



(5,888,995)

Loans receivable



(12,301,292)



Deposits





(4,031)

Accounts payable



9,226,616



(776,760)

Other payables and accrued liabilities



9,259,017



9,129,748

Tax payables



2,572,424



(1,558,220)

Net cash used in operating activities



(4,032,209)



(5,023,938)








Cash flows from investing activities:







Purchases of equipment



(1,343,653)



(57,204)

Cash from acquisition of subsidiary



410,863



Net cash used in investing activities



(932,790)



(57,204)








Cash flows from financing activities:







Proceeds from short-term bank borrowings



2,988,620



4,327,532

Repayment of short-term bank borrowings



(1,122,278)



(5,185,311)

Repayment of long-term bank borrowings



(149,756)



Repayments of loans from other financial institutions



(144,126)



Repayments of obligations under capital leases



(1,864,325)



(236,116)

Amounts advanced from related parties



3,128,231



4,158,734

Repayments to related parties





(13,885,698)

Proceeds from initial public offering





18,474,763

Net cash provided by financing activities



2,836,366



7,653,904








Effect of exchange rate change on cash



86,862



15,536








Net (decrease) increase in cash, cash equivalents and restricted cash



(2,041,771)



2,588,298

Cash, restricted cash at beginning of the period



5,752,117



11,605,625

Cash at end of the period


$

3,710,346


$

14,193,923








Supplemental disclosure of cash flow information:







Interest paid


$

242,386


$

200,435

Income tax paid


$

769,924


$

990,349








Supplemental non-cash investing and financing information:







Non-cash capital leases to acquire revenue equipment


$


$

(118,883)

Uncollected receivable from disposal of revenue equipment


$


$

9,221








Reconciliation to amounts on consolidated balance sheets:







Cash


$

3,710,346


$

4,693,923

Restricted cash





9,500,000

Total cash and restricted cash


$

3,710,346


$

14,193,923

SOURCE MingZhu Logistics Holdings Limited


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