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

Rhea-AI Summary

MingZhu Logistics Holdings Limited (NASDAQ: YGMZ) reported a 528% increase in revenue for the six months ending June 30, 2022, reaching $60.3 million, driven largely by acquisitions, including Yinhua. They achieved a net income of $1.65 million, a turnaround from a loss of $355,744 the previous year, marking 562% growth in net income margin. Operating expenses rose significantly to $58.4 million, yet the company is shifting toward an asset-light strategy and plans to strengthen its market presence further.

Positive

• 528% year-over-year revenue growth to $60.3 million.
• Net income increased by 562.4% to $1.65 million from a loss previously.
• Successful acquisitions of Yinhua and Cheyi contributed significantly to revenue.
• Shift to an asset-light strategy to enhance operational efficiency.

Negative

• Operating expenses surged to $58.4 million, up 534.8% year-over-year.
• Cash balance decreased to $3.7 million, reflecting acquisition payments.
• Net cash used in operating activities remains negative at $4.0 million.

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

 

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SOURCE MingZhu Logistics Holdings Limited

FAQ

What were MingZhu Logistics' financial results for the first half of 2022?

MingZhu reported a revenue increase of 528% to $60.3 million and a net income of $1.65 million for the six months ending June 30, 2022.

How did the acquisitions impact MingZhu's revenue in 2022?

The acquisitions of Yinhua and Cheyi significantly boosted MingZhu's revenue, contributing $13 million in total.

What is MingZhu's current strategy regarding its business model?

MingZhu is transitioning to an asset-light strategy to improve efficiency and reduce capital expenditure.

What challenges did MingZhu face in their financial performance?

Despite revenue growth, MingZhu experienced a significant rise in operating expenses and a decrease in cash reserves due to acquisitions.