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

Rhea-AI Summary

MingZhu Logistics Holdings Limited (NASDAQ: YGMZ) reported financial results for the six months ended June 30, 2021, showing a revenue growth of 8.2% to $9.6 million and a gross profit increase of 15% to $1.4 million. Operating income improved by 24% to $386,940, with a rise in operating margin to 4.0%. However, the company faced a net loss of $355,744, contrasting with a net income of $106,698 in the previous year. Cash and restricted cash increased to $14.2 million, while accounts receivable decreased to $2.5 million.

Positive

• Revenue growth of 8.2%, totaling $9.6 million.
• Gross profit increased by 15%, reaching $1.4 million.
• Operating income rose by 24%, totaling $386,940.
• Improved operating margin at 4.0%, up from 3.5%.

Negative

• Net loss of $355,744, compared to net income of $106,698 in the prior year.
• General and administrative expenses increased by 61%, reaching $932,409.

SHENZHEN, China, Dec. 23, 2021 /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 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. 

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.

 

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.
  

 

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
																		Retained Earnings
		Shares*				Amount				Share Subscription Receivables				Additional Paid-in Capital				Statutory Reserve				Unrestricted				Accumulated Other Comprehensive 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

 

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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SOURCE MingZhu Logistics Holdings Limited

FAQ

What were the financial results for MingZhu Logistics (YGMZ) for the first half of 2021?

MingZhu reported an 8.2% revenue increase to $9.6 million, with a gross profit of $1.4 million, up 15%, and a net loss of $355,744.

How did MingZhu's operating income change in 2021?

Operating income rose by 24%, amounting to $386,940 for the first half of 2021.

What is the cash position of MingZhu Logistics as of June 30, 2021?

As of June 30, 2021, MingZhu had cash and restricted cash of $14.2 million.

What impact did the company's operations have on its financial results?

MingZhu's operations showed growth in revenue and profit margins, but the company recorded a net loss due to increased expenses.