December 27, 2023

Mingzhu Announces Unaudited Financial Results for the Six Months Ended June 30, 2023

SHENZHEN, China, Dec. 27, 2023 /PRNewswire/ — MingZhu Logistics Holdings Limited (“MingZhu” or the “Company”) (NASDAQ: YGMZ), an elite provider of logistics and transportation services to businesses, today announced its unaudited financial results for the six months ended June 30, 2023.

Mr. Jinlong Yang, CEO of MingZhu, commented, “While the broader economic environment remained challenged, with customers adjusting to demand fluctuations, our team was focused and worked to minimize the impact of the volatility where we could. Through our efforts, we were able to reduce operating expenses in the first six months of 2023, compared to the year ago period, enabling us to maintain a healthy balance sheet. Our longer-term business diversification strategy remains in place but has been slowed by a sluggish acquisition environment given higher interest rates and costs, including an 83% increase in our transportation costs, which served to depress our net income. We believe there are meaningful opportunities for further cost reductions in our operations and have made this a priority moving forward as we continue to adjust our business to the evolving market.”

Operating Results for the Six Months Ended June 30, 2023

Revenue for the six months ended June 30, 2023, decreased by $4,239,764, or 7.0%, to $56.1 million from $60.3 million for the same period of last year.

Total operating expenses decreased by $1,430,036, or 2.4%, to $57.0 million for the six months ended June 30, 2023, from $58.4 million for the same period of last year.

Net loss for the six months ended June 30, 2023 was $805,636 compared to net income of $1,645,083 in the year ago period. The decrease in net income was primarily due to the lower revenue.

Balance Sheet and Cash Flow

As of June 30, 2023, the Company had a $4.3 million balance of cash, and an accounts receivable balance of $15.5 million. The balance of prepayment to suppliers totaled $10.7 million as of June 30, 2023, compared to $7.3 million as of December 31, 2022, as the Company retrieved partial payments back from suppliers or received services and products.

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,

December 31,

2023

2022

USD

(Unaudited)

ASSETS

CURRENT ASSETS

Cash

4,307,362

5,687,311

Accounts receivable, net

15,496,761

19,127,321

Prepayments

10,666,774

7,339,861

Other receivables

3,462,794

2,795,843

Loans receivable*

31,085,776

28,622,704

Amount due from related parties

5,406,484

2,677,345

Total current assets

70,425,951

66,250,385

NON-CURRENT ASSET

Property and equipment, net

7,338,773

9,073,698

Deferred tax assets

241,381

238,237

Deposits

3,059,220

2,657,126

Goodwill

33,237,409

Total non-current asset

43,876,783

45,206,470

Total assets

114,302,734

111,456,855

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Short-term bank borrowings

13,842,541

10,022,335

Accounts payable

7,147,277

10,134,535

Other payables and accrued liabilities

33,376,960

29,054,674

Amount due to related parties

6,933,731

6,108,866

Tax payable

4,754,198

5,278,436

Current maturities of long-term bank borrowings

206,209

586,935

Current portion of capital lease and financing obligations

714,621

757,088

Total current liabilities

66,975,537

61,942,869

NON-CURRENT LIABILITIES

Long-term bank borrowings

274,485

253,352

Long-term portion of capital lease and financing obligations

687,901

1,158,642

Total non-current liabilities

962,386

1,411,994

Total liabilities

67,937,923

63,354,863

SHAREHOLDERS’ EQUITY

Ordinary shares: $0.001 par value, 50,000,000 shares authorized,
22,960,277 and 22,960,277 shares issued and outstanding as of June 30, 2023
and December 31, 2022, respectively**

22,960

Share subscription receivables

(848,414)

(847,086)

Additional paid-in capital

41,583,382

41,734,546

Statutory reserves

1,046,249

1,036,841

Retained earnings

5,825,256

7,704,538

Accumulated other comprehensive Loss

(1,264,622)

(1,549,807)

Total shareholders’ equity

46,364,811

48,101,992

Total liabilities and shareholders’ equity

114,302,734

111,456,855

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,

2023

2022

USD

REVENUES

56,090,997

60,330,761

COSTS AND EXPENSES

Transportation costs

32,840,752

17,953,860

Costs of rental services

13,020,751

24,962,970

Costs of insurance services

8,576,401

12,740,606

General and administrative expenses

2,112,502

2,471,467

Sales and marketing expenses

442,500

294,039

Total costs and expenses

56,992,906

58,422,942

(LOSS) INCOME FROM OPERATIONS

(901,909)

1,907,819

OTHER (EXPENSES) INCOME

Interest expenses

(413,618)

(652,372)

Other expenses

(12,815)

(358,267)

Other income

482,540

1,237,049

Total other income, net

56,107

226,410

(LOSS) INCOME BEFORE INCOME TAXES

(845,802)

2,134,229

(BENEFIT) PROVISION FOR INCOME TAXES

(40,166)

489,147

NET LOSS

(805,636)

1,645,082

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation adjustment

285,185

(229,321)

COMPREHENSIVE (LOSS) INCOME

(520,451)

1,415,761

Weighted average shares used in computation:

Basic*

21,429,877

Diluted*

20,885,442

(LOSS) EARNINGS PER SHARE – BASIC*

(0.04)

0.07

(LOSS) EARNINGS PER SHARE – DILUTED*

(0.04)

0.07

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)

Additional

Accumulated Other Comprehensive

Subscription

Paid-in

Statutory

Retained

Income

Shares*

Amount

Receivables

Capital

Reserve

Earnings

(Loss)

Total

USD

BALANCE, December 31, 2022

22,960,277

22,960

(847,086)

41,734,546

1,036,841

7,704,538

(1,549,807)

48,101,992

Net income (loss) for the period

–

(805,636)

–

(805,636)

Foreign currency translation adjustment

–

(1,328)

(151,164)

–

(1,064,238)

285,185

(931,545)

Appropriation to statutory reserve

–

9,408

(9,408)

–

BALANCE, June 30, 2023

22,960,277

22,960

(848,414)

41,583,382

1,046,249

5,825,256

(1,264,622)

46,364,811

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Six Months
Ended
June 30,

2023

2022

USD

Cash flows from operating activities:

Net (loss) income

(805,636)

1,645,083

Adjustments to reconcile net income to net cash provided (used in by operating activities:

Amortization of deferred financing fees

–

26,607

Provision for doubtful accounts

19,413

–

Depreciation for property and equipment

851,324

3,441,564

Deferred income tax benefit

(12,532)

(24,798)

Changes in operating assets and liabilities

Accounts receivable

3,015,034

(19,659,925)

Prepayments

(3,845,327)

1,080,484

Other receivables

(2,629,641)

702,011

Loans receivable

(1,992,268)

(12,301,292)

Deposits

(822,745)

–

Accounts payable

(2,821,222)

9,226,616

Other payables and accrued liabilities

5,356,422

9,259,017

Tax payables

(278,606)

2,572,424

Net cash used in operating activities

(3,965,784)

(4,032,209)

Cash flows from investing activities:

Purchases of equipment

–

(1,343,653)

Disposal of equipment

31,102

–

Cash from acquisition of subsidiary

–

410,863

Net cash provided by (used in) investing activities

31,102

(932,790)

Cash flows from financing activities:

Proceeds from short-term bank borrowings

4,876,613

2,988,620

Repayment of short-term bank borrowings

(354,778)

(1,122,278)

Repayment of long-term bank borrowings

–

(149,756)

Repayments of loans from other financial institutions

(784,097)

(144,126)

Repayments of obligations under capital leases

–

(1,864,325)

Amounts advanced from related parties

3,222,649

3,128,231

Repayments to related parties

(4,257,112)

–

Net cash provided by financing activities

2,703,275

2,836,366

Effect of exchange rate change on cash

(148,542)

86,862

Net decrease in cash

(1,379,949)

(2,041,771)

Cash at beginning of the period

5,687,311

5,752,117

Cash at end of the period

4,307,362

3,710,346

Supplemental disclosure of cash flow information:

Interest paid

504,655

242,386

Income tax paid

10,620

769,924

Supplemental non-cash investing and financing information:

Non-cash capital leases to acquire revenue equipment

–

Uncollected receivable from disposal of revenue equipment

–

Reconciliation to amounts on consolidated balance sheets:

Cash

4,307,362

3,710,346

Restricted cash

–

Total cash and restricted cash

4,307,362

3,710,346

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SOURCE MingZhu Logistics Holdings Limited

Mingzhu Announces Unaudited Financial Results for the Six Months Ended June 30, 2023

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