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SHENGFENG DEVELOPMENT Ltd

SHENGFENG DEVELOPMENT LtdSFWL決算レポート

Nasdaq

SHENGFENG DEVELOPMENT Ltd (ticker: SFWL) is a China-based integrated logistics service provider. It offers end-to-end supply chain solutions including warehousing, last-mile delivery, and cross-border logistics, serving e-commerce, manufacturing, and retail clients across Greater China and Southeast Asia.

What changed in SHENGFENG DEVELOPMENT Ltd's 20-F — 2024 vs 2025

Top changes in SHENGFENG DEVELOPMENT Ltd's 2025 20-F

560 paragraphs added · 524 removed · 444 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

200 edited+85 added−42 removed599 unchanged
Risk Factors—Risks Relating to Our Corporate Structure—Our VIE Agreements are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements” and “—D.
Risk Factors—Risks Relating to Our Corporate Structure—Our VIE Agreements are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements” and “—D.
We have evaluated the guidance in FASB ASC 810 and determined that we are regarded as the primary beneficiary of the VIE, for accounting purposes, as a result of our direct ownership in Tianyu and the provisions of the VIE Agreements. Accordingly, we treat the VIE and the VIE’s subsidiaries as our consolidated entities under U.S. GAAP.
We have evaluated the guidance in FASB ASC 810 and determined that we are regarded as the primary beneficiary of the VIE, for accounting purposes, as a result of our direct ownership in Tianyu and the provisions of the VIE Agreements. Accordingly, we treat the VIE and the VIE’s subsidiaries as our consolidated entities under U.S. GAAP.
For example, Shengfeng Logistics and the Shengfeng Logistics Shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests.
For example, Shengfeng Logistics and the Shengfeng Logistics Shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests.
If we had direct ownership of Shengfeng Logistics, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Shengfeng Logistics, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.
If we had direct ownership of Shengfeng Logistics, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Shengfeng Logistics, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.
Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements with Shengfeng Logistics.
Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements with Shengfeng Logistics.
Furthermore, failure of the VIE shareholders to perform certain obligations could compel the Company to rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective.
Furthermore, failure of the VIE shareholders to perform certain obligations could compel the Company to rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective.
We are, therefore, subject to risks due to the uncertainty of the interpretation and application of the laws and regulations of the PRC, regarding the VIE and the VIE structure, including, but not limited to, regulatory review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangements with the VIE.
We are, therefore, subject to risks due to the uncertainty of the interpretation and application of the laws and regulations of the PRC, regarding the VIE and the VIE structure, including, but not limited to, regulatory review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangements with the VIE.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies.
Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters.
Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters.
Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.
Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.
Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings.
Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings.
Within such six-month transition period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing procedures with the CSRC.
Within such six-month transition period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing procedures with the CSRC.
The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31, 2023 together with the Trial Measures.
The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.
On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.
Due to the restrictions imposed on loans in foreign currencies extended to PRC domestic companies, we are not likely to make such loans to Shengfeng Logistics, which is a PRC domestic company.
Due to the restrictions imposed on loans in foreign currencies extended to PRC domestic companies, we are not likely to make such loans to Shengfeng Logistics, which is a PRC domestic company.
According to the Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure to the CSRC; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.
According to the Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure to the CSRC; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.
The New Overseas Listing Rules further require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; and c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means.
The New Overseas Listing Rules further require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; and c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means.
The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas.
The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas.
The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31, 2023 together with the Trial Measures.
The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
The revised Provisions require that, including, but not limited, to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
The revised Provisions require that, including, but not limited to, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
Further, according to the CSRC Notice, domestic company obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their indirect overseas offering and listing prior to March 31, 2023 but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023.
Further, according to the CSRC Notice, domestic company obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their indirect overseas offering and listing prior to March 31, 2023 but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023.
Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings.
Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings.
The revised Provisions require that, including, but not limited to, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
The revised Provisions require that, including, but not limited, to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease by $0.37 million for the current year, which will either increase or decrease our net profit by a maximum of $0.28 million.
Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease by $0.37 million for the current year, which will either decrease or increase our net profit by a maximum of $0.28 million.
Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease by $0.44 million for the current year, which will either increase or decrease our net profit by a maximum of $0.33 million.
Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease by $0.44 million for the current year, which will either decrease or increase our net profit by a maximum of $0.33 million.
Nasdaq rules, however, permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards.
Nasdaq Listing Rules, however, permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards.
In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our continued listing on Nasdaq, our financial condition, results of operations, and the subsequent offering.” Since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our continued listing on Nasdaq, our financial condition, results of operations, and the subsequent offering.” 10 Since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
(WFOE) (100% owned by Shengfeng HK) Shengfeng Logistics Group Co., Ltd. and its subsidiaries (VIE) Eliminations Consolidated Total $ in thousands Condensed Consolidating Schedule – Balance Sheet Assets: Current assets $ 376 $ 10 $ 5,531 $ 203,213 $ (3,892 ) $ 205,238 Receivable from VIE $ - $ - $ 109,912 $ - $ (109,912 ) $ - Investments in subsidiaries $ 116,768 $ 116,758 $ - $ - $ (233,526 ) $ - Non-current assets $ 116,768 $ 123,408 $ 112,245 $ 102,559 $ (350,088 ) $ 104,892 Total assets $ 117,144 $ 123,418 $ 117,776 $ 305,772 $ (353,980 ) $ 310,130 Liabilities: Current liabilities $ - $ 6,660 $ 943 $ 165,668 $ (10,587 ) $ 162,684 Payable to WFOE $ - $ - $ - $ 109,912 $ (109,912 ) $ - Non-current liabilities $ - $ - $ 75 $ 23,925 $ - $ 24,000 Total liabilities $ - $ 6,660 $ 1,018 $ 299,505 $ (120,499 ) $ 186,684 Total equity $ 117,144 $ 116,758 $ 116,758 $ 6,267 $ (233,481 ) $ 123,446 Total liabilities and equity $ 117,144 $ 123,418 $ 117,776 $ 305,772 $ (353,980 ) $ 310,130 Condensed Consolidating Schedule – Statement of Operations Revenues $ - $ - $ 14,979 $ 498,122 $ (8,943 ) $ 504,158 Cost of revenues $ - $ - $ (14,063 ) $ (453,365 ) $ 9,554 $ (457,874 ) Gross profit $ - $ - $ 916 $ 44,757 $ 611 $ 46,284 Operating expenses $ (259 ) $ - $ (1,053 ) $ (30,306 ) $ - $ (31,618 ) Technical service income from VIE and its subsidiaries (1) $ - $ - $ 10,490 $ - $ (10,490 ) $ - Technical Service expense in WFOE (1) $ - $ - $ - $ (10,490 ) $ 10,490 $ - Income for equity method investments $ 10,477 $ 10,477 $ - $ - $ (20,954 ) $ - Net income $ 10,218 $ 10,477 $ 10,477 $ 10,490 $ (30,835 ) $ 10,827 Condensed Consolidating Schedule – Statement of Cash Flows Net cash provided by (used in) operating activities $ (522 ) $ - $ 1,574 $ 13,958 $ - $ 15,010 Net cash used in investing activities $ - $ - $ (5,805 ) $ (26,824 ) $ - $ (32,629 ) Net cash provided by financing activities $ - $ - $ - $ 29,072 $ - $ 29,072 Effects of exchange rate changes on cash, cash equivalents and restricted cash $ - $ - $ 23 $ (556 ) $ - $ (533 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (522 ) $ - $ (4,208 ) $ 15,650 $ - $ 10,920 Cash, cash equivalents and restricted cash, beginning of year $ 542 $ 10 $ 4,528 $ 24,213 - $ 29,293 Cash, cash equivalents and restricted cash, end of year $ 20 $ 10 $ 320 $ 39,863 $ - $ 40,213 Inter-company cash transfers Transfer from VIE to WFOE $ - $ - $ 6,579 $ (6,579 ) $ - $ - Transfer from WFOE to VIE $ - $ - $ (3,036 ) $ 3,036 $ - $ - 17 As of and for the fiscal year ended December 31, 2023 Shengfeng Development Limited (Shengfeng Cayman) Shengfeng HK (100% owned by Shengfeng Cayman) Tianyu Shengfeng Logistics Group Co., Ltd.
(WFOE) (100% owned by Shengfeng HK) Shengfeng Logistics Group Co., Ltd. and its subsidiaries (VIE) Eliminations Consolidated Total $ in thousands Condensed Consolidating Schedule – Balance Sheet Assets: Current assets $ 376 $ 10 $ 5,531 $ 203,213 $ (3,892 ) $ 205,238 Receivable from VIE $ - $ - $ 109,912 $ - $ (109,912 ) $ - Investments in subsidiaries $ 116,768 $ 116,758 $ - $ - $ (233,526 ) $ - Non-current assets $ 116,768 $ 123,408 $ 112,245 $ 102,559 $ (350,088 ) $ 104,892 Total assets $ 117,144 $ 123,418 $ 117,776 $ 305,772 $ (353,980 ) $ 310,130 Liabilities: Current liabilities $ - $ 6,660 $ 943 $ 165,668 $ (10,587 ) $ 162,684 Payable to WFOE $ - $ - $ - $ 109,912 $ (109,912 ) $ - Non-current liabilities $ - $ - $ 75 $ 23,925 $ - $ 24,000 Total liabilities $ - $ 6,660 $ 1,018 $ 299,505 $ (120,499 ) $ 186,684 Total equity $ 117,144 $ 116,758 $ 116,758 $ 6,267 $ (233,481 ) $ 123,446 Total liabilities and equity $ 117,144 $ 123,418 $ 117,776 $ 305,772 $ (353,980 ) $ 310,130 Condensed Consolidating Schedule – Statement of Operations Revenues $ - $ - $ 14,979 $ 498,122 $ (8,943 ) $ 504,158 Cost of revenues $ - $ - $ (14,063 ) $ (453,365 ) $ 9,554 $ (457,874 ) Gross profit $ - $ - $ 916 $ 44,757 $ 611 $ 46,284 Operating expenses $ (259 ) $ - $ (1,053 ) $ (30,306 ) $ - $ (31,618 ) Technical service income from VIE and its subsidiaries (1) $ - $ - $ 10,490 $ - $ (10,490 ) $ - Technical Service expense in WFOE (1) $ - $ - $ - $ (10,490 ) $ 10,490 $ - Income for equity method investments $ 10,477 $ 10,477 $ - $ - $ (20,954 ) $ - Net income $ 10,218 $ 10,477 $ 10,477 $ 10,490 $ (30,835 ) $ 10,827 Condensed Consolidating Schedule – Statement of Cash Flows Net cash provided by (used in) operating activities $ (522 ) $ - $ 1,574 $ 13,958 $ - $ 15,010 Net cash used in investing activities $ - $ - $ (5,805 ) $ (26,824 ) $ - $ (32,629 ) Net cash provided by financing activities $ - $ - $ - $ 29,072 $ - $ 29,072 Effects of exchange rate changes on cash, cash equivalents and restricted cash $ - $ - $ 23 $ (556 ) $ - $ (533 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (522 ) $ - $ (4,208 ) $ 15,650 $ - $ 10,920 Cash, cash equivalents and restricted cash, beginning of year $ 542 $ 10 $ 4,528 $ 24,213 $ - $ 29,293 Cash, cash equivalents and restricted cash, end of year $ 20 $ 10 $ 320 $ 39,863 $ - $ 40,213 Inter-company cash transfers Transfer from VIE to WFOE $ - $ - $ 6,579 $ (6,579 ) $ - $ - Transfer from WFOE to VIE $ - $ - $ (3,036 ) $ 3,036 $ - $ - 18 As of and for the fiscal year ended December 31, 2023 Shengfeng Development Limited (Shengfeng Cayman) Shengfeng HK (100% owned by Shengfeng Cayman) Tianyu Shengfeng Logistics Group Co., Ltd.
Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE’s operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless.” Each of the VIE Agreements is described in detail below: Exclusive Technical Consultation and Service Agreement Pursuant to the Technical Consultation and Service Agreement between Shengfeng Logistics and Tianyu, Tianyu provides Shengfeng Logistics with consultation and services in the areas of funding, human, technology and intellectual properties, including, but not limited to, training and technical support, marketing consultation services, general advice and assistance relating to management and operation of Shengfeng Logistics’ business, and other consultation and services which are necessary for Shengfeng Logistics’ business, on an exclusive basis, utilizing its resources.
Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE’s operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless.” 7 Each of the VIE Agreements is described in detail below: Exclusive Technical Consultation and Service Agreement Pursuant to the Technical Consultation and Service Agreement between Shengfeng Logistics and Tianyu, Tianyu provides Shengfeng Logistics with consultation and services in the areas of funding, human, technology and intellectual properties, including, but not limited to, training and technical support, marketing consultation services, general advice and assistance relating to management and operation of Shengfeng Logistics’ business, and other consultation and services which are necessary for Shengfeng Logistics’ business, on an exclusive basis, utilizing its resources.
Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE’s operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless.” Dividend Distributions, Cash Transfer, and Tax Consequences Shengfeng Cayman transfers cash to its wholly owned Hong Kong subsidiary, Shengfeng HK, by making capital contributions or providing loans, and Shengfeng HK transfers cash to its wholly owned subsidiary Tianyu Shengfeng Logistics Group Co., Ltd.
Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE’s operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless.” 13 Dividend Distributions, Cash Transfer, and Tax Consequences Shengfeng Cayman transfers cash to its wholly owned Hong Kong subsidiary, Shengfeng HK, by making capital contributions or providing loans, and Shengfeng HK transfers cash to its wholly owned subsidiary Tianyu Shengfeng Logistics Group Co., Ltd.
If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our Class A Ordinary Share is a “penny stock,” which will require brokers trading in our Class A Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Share; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our Class A Ordinary Share is a “penny stock,” which will require brokers trading in our Class A Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Share; 58 ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
Taxation—People’s Republic of China Enterprise Taxation (for the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau) . ” 14 In order for us to pay dividends to our shareholders, we will rely on payments made from Shengfeng Logistics to Tianyu, pursuant to contractual arrangements between such parties, and the distribution of such payments to Shengfeng HK as dividends from Tianyu.
Taxation—People’s Republic of China Enterprise Taxation (for the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau) . ” In order for us to pay dividends to our shareholders, we will rely on payments made from Shengfeng Logistics to Tianyu, pursuant to contractual arrangements between such parties, and the distribution of such payments to Shengfeng HK as dividends from Tianyu.
Some of our lease agreements have not been registered with the relevant government authorities. Failure to complete these required registrations may expose our landlords, lessors and the Company to potential monetary fines. 46 Our business and results of operations may be materially and adversely affected if we or third-party transportation providers are unable to provide high-quality services to our clients.
Some of our lease agreements have not been registered with the relevant government authorities. Failure to complete these required registrations may expose our landlords, lessors and the Company to potential monetary fines. Our business and results of operations may be materially and adversely affected if we or third-party transportation providers are unable to provide high-quality services to our clients.
However, we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiary to our Hong Kong subsidiary, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received. 40 If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price, and reputation.
However, we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiary to our Hong Kong subsidiary, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received. 41 If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price, and reputation.
Such new initiatives may require us to devote significant financial and managerial resources and may not perform as expected. 53 In addition, we may not be able to successfully anticipate and address client demand and preferences in connection with new service offerings and our existing network and facilities may not be adaptable to the new services or clients.
Such new initiatives may require us to devote significant financial and managerial resources and may not perform as expected. In addition, we may not be able to successfully anticipate and address client demand and preferences in connection with new service offerings and our existing network and facilities may not be adaptable to the new services or clients.
We will continue investigating and monitoring our compliance status in connection with PRC labor-related laws and regulations in order to promptly address any shortfall going forward. 34 The interpretation and implementation of labor-related laws and regulations are still constantly evolving which may be further amended from time to time.
We will continue investigating and monitoring our compliance status in connection with PRC labor-related laws and regulations in order to promptly address any shortfall going forward. The interpretation and implementation of labor-related laws and regulations are still constantly evolving which may be further amended from time to time.
Risk Factors — Risks Relating to Our Corporate Structure—The VIE Agreements may result in adverse tax consequences.” Current PRC regulations permit our PRC subsidiary to pay dividends to us only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.
Risk Factors — Risks Relating to Our Corporate Structure—The VIE Agreements may result in adverse tax consequences.” 40 Current PRC regulations permit our PRC subsidiary to pay dividends to us only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.
Otherwise, we may be subject to penalties if we continue to operate those trucks that exceed the limits set forth in the provisions. 47 New laws and regulations may be promulgated from time to time and substantial uncertainties exist regarding the interpretation and implementation of current and future PRC laws and regulations applicable to our businesses.
Otherwise, we may be subject to penalties if we continue to operate those trucks that exceed the limits set forth in the provisions. New laws and regulations may be promulgated from time to time and substantial uncertainties exist regarding the interpretation and implementation of current and future PRC laws and regulations applicable to our businesses.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, however, the interpretations of many laws, regulations, and rules are not always uniform and enforcement of these laws, regulations, and rules involve uncertainties. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, however, the interpretations of many laws, regulations, and rules are not always uniform and enforcement of these laws, regulations, and rules involve uncertainties. 28 From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S. 31 It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations. Moreover, certain lessors have not provided us with valid ownership certificates.
In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations. 46 Moreover, certain lessors have not provided us with valid ownership certificates.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors, and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
We refer to the above shareholders of Shengfeng Logistics as the “Shengfeng Logistics Shareholders.” 2 For details of our principal shareholders’ ownership, please refer to the beneficial ownership table in the section captioned “Item 6. Directors, Senior Management and Employees—E.
We refer to the above shareholders of Shengfeng Logistics as the “Shengfeng Logistics Shareholders.” For details of our principal shareholders’ ownership, please refer to the beneficial ownership table in the section captioned “Item 6. Directors, Senior Management and Employees—E.
Pursuant to the Regulations on Commercial Franchising promulgated by the State Council in February 2007 and Provisions on Administration of the Record Filing of Commercial Franchises issued by Ministry of Commerce in December 2011, collectively the Regulations and Provisions on Commercial Franchising, commercial franchising refers to the business activities where an enterprise that possesses the registered trademarks, enterprise logos, patents, proprietary technology, or any other business resources allows such business resources to be used by another business operator through contract and the franchisee follows the uniform business model to conduct business operation and pay franchising fees according to the contract.
Pursuant to the Regulations on Commercial Franchising promulgated by the State Council in February 2007 and Provisions on Administration of the Record Filing of Commercial Franchises issued by Ministry of Commerce in December 2011 and amended on December 2023, collectively the Regulations and Provisions on Commercial Franchising, commercial franchising refers to the business activities where an enterprise that possesses the registered trademarks, enterprise logos, patents, proprietary technology, or any other business resources allows such business resources to be used by another business operator through contract and the franchisee follows the uniform business model to conduct business operation and pay franchising fees according to the contract.
If securities or industry analysts do not publish research or reports about our business, or if the publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. 29 The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law .
A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law .
Taxation—United States Federal Income Taxation—PFIC.” Anti-takeover provisions in our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control.
Taxation—United States Federal Income Taxation—PFIC.” 60 Anti-takeover provisions in our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control.
The following tables present selected condensed consolidating financial data of Shengfeng Cayman and its subsidiaries, the VIE, and the VIE’s subsidiaries for the fiscal years ended December 31, 2024, 2023 and 2022, and balance sheet data as of December 31, 2024, 2023 and 2022, which have been derived from our audited consolidated financial statements for those years. 16 As of and for the fiscal year ended December 31, 2024 Shengfeng Development Limited (Shengfeng Cayman) Shengfeng HK (100% owned by Shengfeng Cayman) Tianyu Shengfeng Logistics Group Co., Ltd.
The following tables present selected condensed consolidating financial data of Shengfeng Cayman and its subsidiaries, the VIE, and the VIE’s subsidiaries for the fiscal years ended December 31, 2025, 2024 and 2023, and balance sheet data as of December 31, 2025, 2024 and 2023, which have been derived from our audited consolidated financial statements for those years. 16 As of and for the fiscal year ended December 31, 2025 Shengfeng Development Limited (Shengfeng Cayman) Shengfeng HK (100% owned by Shengfeng Cayman) Tianyu Shengfeng Logistics Group Co., Ltd.
Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in preparing our consolidated financial statements as of and for the year ended December 31, 2024, we have identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB, and other control deficiencies.
Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in preparing our consolidated financial statements as of and for the year ended December 31, 2025, we have identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB, and other control deficiencies.
GAAP. 6 Although we take every precaution available to effectively enforce the contractual and corporate relationship, the VIE structure has its inherent risks that may affect your investment, including less effectiveness and certainties than direct ownership and potential substantial costs to enforce the terms of the VIE Agreements.
Although we take every precaution available to effectively enforce the contractual and corporate relationship, the VIE structure has its inherent risks that may affect your investment, including less effectiveness and certainties than direct ownership and potential substantial costs to enforce the terms of the VIE Agreements.
Nevertheless, Shengfeng HK, as an entity incorporated under law of Hong Kong, shall be subject to Hong Kong law in general. 26 While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy.
Nevertheless, Shengfeng HK, as an entity incorporated under law of Hong Kong, shall be subject to Hong Kong law in general. 27 While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy.
Our number of dispatched workers exceeded the 10% limitation required by the Interim Provisions on Labor Dispatching in the fiscal year ended December 31, 2022. The Company had taken measures to try to comply with related laws and regulations in the fiscal year ended December 31, 2023.
Our number of dispatched workers exceeded the 10% limitation required by the Interim Provisions on Labor Dispatching in the fiscal year ended December 31, 2022. The Company had taken measures to try to comply with related laws and regulations in the fiscal year ended December 31, 2025.
Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE’s subsidiaries in China, therefore, you will not directly hold equity interests in the VIE or the VIE’s subsidiaries, and you may never directly hold equity interests in the VIE or the VIE’s subsidiaries through your investment in our Class A Ordinary Shares.
GAAP. 21 Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE’s subsidiaries in China, therefore, you will not directly hold equity interests in the VIE or the VIE’s subsidiaries, and you may never directly hold equity interests in the VIE or the VIE’s subsidiaries through your investment in our Class A Ordinary Shares.
In particular, for the year ended December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 22.0% of total cost of revenues of the Company and Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 12.3% of total cost of revenues of the Company.
For the year ended December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 22.0% of total cost of revenues of the Company and Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 12.3% of total cost of revenues of the Company.
Due to the material weakness in our internal control over financial reporting as described above, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024.
Due to the material weakness in our internal control over financial reporting as described above, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025.
On March 30, 2015, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capital of Foreign-invested Enterprise s, or “SAFE Circular 19,” which took effect and replaced previous regulations effective on June 1, 2015.
On March 30, 2015, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capital of Foreign-invested Enterprises, or “SAFE Circular 19,” which took effect and replaced previous regulations effective on June 1, 2015.
For the fiscal years ended December 31, 2024, 2023 and 2022, about 83%, 77% and 71% of our freight transportation services were provided by third-party transportation providers, respectively, which included owner-operators of a single truck, private fleets, and large trucking companies. Several third-party transportation providers contributed a significant part of the total cost of revenue of the Company.
For the fiscal years ended December 31, 2025, 2024 and 2023, about 84%, 83% and 77% of our freight transportation services were provided by third-party transportation providers, respectively, which included owner-operators of a single truck, private fleets, and large trucking companies. Several third-party transportation providers contributed a significant part of the total cost of revenue of the Company.
Some provisions of our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following: ● provisions that authorize our board of directors to issue shares with preferred, deferred, or other special rights or restrictions without any further vote or action by our shareholders; and ● provisions that restrict the ability of our shareholders to call meetings and to propose special matters for consideration at shareholder meetings.
Some provisions of our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following: ● provisions that authorize our board of directors to issue shares without any further vote or action by our shareholders; and ● provisions that restrict the ability of our shareholders to call meetings and to propose special matters for consideration at shareholder meetings.
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements.
In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements.
(WFOE) (100% owned by Shengfeng HK) Shengfeng Logistics Group Co., Ltd. and its subsidiaries (VIE) Eliminations Consolidated Total $ in thousands Condensed Consolidating Schedule – Balance Sheet Assets: Current assets $ 635 $ 10 $ 14,434 $ 146,894 $ (12,868 ) $ 149,105 Receivable from VIE $ - $ - $ 93,425 $ - $ (93,425 ) $ - Investments in subsidiaries $ 107,312 $ 107,302 $ - $ - $ (214,614 ) $ - Non-current assets $ 107,312 $ 113,952 $ 114,021 $ 103,055 $ (321,607 ) $ 116,733 Total assets $ 107,947 $ 113,962 $ 128,455 $ 249,949 $ (334,475 ) $ 265,838 Liabilities: Current liabilities $ - $ 6,660 $ 21,061 $ 127,603 $ (18,948 ) $ 136,376 Payable to WFOE $ - $ - $ - $ 93,425 $ (93,425 ) $ - Non-current liabilities $ - $ - $ 92 $ 17,057 $ - $ 17,149 Total liabilities $ - $ 6,660 $ 21,153 $ 238,085 $ (112,373 ) $ 153,525 Total equity $ 107,947 $ 107,302 $ 107,302 $ 11,864 $ (222,102 ) $ 112,313 Total liabilities and equity $ 107,947 $ 113,962 $ 128,455 $ 249,949 $ (334,475 ) $ 265,838 Condensed Consolidating Schedule – Statement of Operations Revenues $ - $ - $ 14,098 $ 401,825 $ (11,802 ) $ 404,121 Cost of revenues $ - $ - $ (13,137 ) $ (355,662 ) $ 11,184 $ (357,615 ) Gross profit $ - $ - $ 961 $ 46,163 $ (618 ) $ 46,506 Operating expenses $ (421 ) $ - $ (472 ) $ (31,743 ) $ 36 $ (32,600 ) Technical service income from VIE and its subsidiaries (1) $ - $ - $ 10,828 $ - $ (10,828 ) $ - Technical Service expense in WFOE (1) $ - $ - $ - $ (10,828 ) $ 10,828 $ - Income for equity method investments $ 11,310 $ 11,310 $ - $ - $ (22,620 ) $ - Net income $ 10,889 $ 11,310 $ 11,310 $ 10,828 $ (34,029 ) $ 10,308 Condensed Consolidating Schedule – Statement of Cash Flows Net cash provided by (used in) operating activities $ (514 ) $ - $ 2,982 $ 9,645 $ - $ 12,113 Net cash used in investing activities $ (6,660 ) $ (6,650 ) $ (19,080 ) $ (6,694 ) $ 20,263 $ (18,821 ) Net cash provided by (used in) financing activities $ 7,669 $ 6,660 $ 20,842 $ (1,717 ) $ (20,263 ) $ 13,191 Effects of exchange rate changes on cash, cash equivalents and restricted cash $ - $ - $ (216 ) $ (342 ) $ - $ (558 ) Net increase in cash, cash equivalents and restricted cash $ 495 $ 10 $ 4,670 $ 750 $ - $ 5,925 Cash, cash equivalents and restricted cash, beginning of year $ 47 $ - $ - $ 23,321 - $ 23,368 Cash, cash equivalents and restricted cash, end of year $ 542 $ 10 $ 4,528 $ 24,213 $ - $ 29,293 Inter-company cash transfers Transfer from Shengfeng Cayman to Shengfeng HK $ (6,660 ) $ 6,660 $ - $ - $ - $ - Transfer from Shengfeng HK to WFOE $ - $ (6,650 ) $ 6,650 $ - $ - $ - Transfer from VIE to WFOE $ - $ - $ 6,954 $ (6,954 ) $ - $ - 18 As of and for the fiscal year ended December 31, 2022 Shengfeng Development Limited (Shengfeng Cayman) Shengfeng HK (100% owned by Shengfeng Cayman) Tianyu Shengfeng Logistics Group Co., Ltd.
(WFOE) (100% owned by Shengfeng HK) Shengfeng Logistics Group Co., Ltd. and its subsidiaries (VIE) Eliminations Consolidated Total $ in thousands Condensed Consolidating Schedule – Balance Sheet Assets: Current assets $ 635 $ 10 $ 14,434 $ 146,894 $ (12,868 ) $ 149,105 Receivable from VIE $ - $ - $ 93,425 $ - $ (93,425 ) $ - Investments in subsidiaries $ 107,312 $ 107,302 $ - $ - $ (214,614 ) $ - Non-current assets $ 107,312 $ 113,952 $ 114,021 $ 103,055 $ (321,607 ) $ 116,733 Total assets $ 107,947 $ 113,962 $ 128,455 $ 249,949 $ (334,475 ) $ 265,838 Liabilities: Current liabilities $ - $ 6,660 $ 21,061 $ 127,603 $ (18,948 ) $ 136,376 Payable to WFOE $ - $ - $ - $ 93,425 $ (93,425 ) $ - Non-current liabilities $ - $ - $ 92 $ 17,057 $ - $ 17,149 Total liabilities $ - $ 6,660 $ 21,153 $ 238,085 $ (112,373 ) $ 153,525 Total equity $ 107,947 $ 107,302 $ 107,302 $ 11,864 $ (222,102 ) $ 112,313 Total liabilities and equity $ 107,947 $ 113,962 $ 128,455 $ 249,949 $ (334,475 ) $ 265,838 Condensed Consolidating Schedule – Statement of Operations Revenues $ - $ - $ 14,098 $ 401,825 $ (11,802 ) $ 404,121 Cost of revenues $ - $ - $ (13,137 ) $ (355,662 ) $ 11,184 $ (357,615 ) Gross profit $ - $ - $ 961 $ 46,163 $ (618 ) $ 46,506 Operating expenses $ (421 ) $ - $ (472 ) $ (31,743 ) $ 36 $ (32,600 ) Technical service income from VIE and its subsidiaries (1) $ - $ - $ 10,828 $ - $ (10,828 ) $ - Technical Service expense in WFOE (1) $ - $ - $ - $ (10,828 ) $ 10,828 $ - Income for equity method investments $ 11,310 $ 11,310 $ - $ - $ (22,620 ) $ - Net income $ 10,889 $ 11,310 $ 11,310 $ 10,828 $ (34,029 ) $ 10,308 Condensed Consolidating Schedule – Statement of Cash Flows Net cash provided by (used in) operating activities $ (514 ) $ - $ 2,982 $ 9,645 $ - $ 12,113 Net cash used in investing activities $ (6,660 ) $ (6,650 ) $ (19,080 ) $ (6,694 ) $ 20,263 $ (18,821 ) Net cash provided by (used in) financing activities $ 7,669 $ 6,660 $ 20,842 $ (1,717 ) $ (20,263 ) $ 13,191 Effects of exchange rate changes on cash, cash equivalents and restricted cash $ - $ - $ (216 ) $ (342 ) $ - $ (558 ) Net increase in cash, cash equivalents and restricted cash $ 495 $ 10 $ 4,670 $ 750 $ - $ 5,925 Cash, cash equivalents and restricted cash, beginning of year $ 47 $ - $ - $ 23,321 $ - $ 23,368 Cash, cash equivalents and restricted cash, end of year $ 542 $ 10 $ 4,528 $ 24,213 $ - $ 29,293 Inter-company cash transfers Transfer from Shengfeng Cayman to Shengfeng HK $ (6,660 ) $ 6,660 $ - $ - $ - $ - Transfer from Shengfeng HK to WFOE $ - $ (6,650 ) $ 6,650 $ - $ - $ - Transfer from VIE to WFOE $ - $ - $ 6,954 $ (6,954 ) $ - $ - (1) Represents technical service fee, including the basic annual fee and the floating fee, which equals to 100% of the VIE’s income net of tax, pursuant to the Exclusive Technical Consultation and Service Agreements. 19 A. [Reserved] B.
If the PCAOB is unable to inspect the company’s auditor for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange or in the over-the-counter trading market in the United States. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act.
If the PCAOB is unable to inspect the company’s auditor for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange or in the over-the-counter trading market in the United States. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act. On December 18, 2020, the HFCA Act was signed into law.
On December 18, 2020, we undertook the following corporate actions: (i) a repurchase of 43,999 ordinary shares held by Shengfeng International Limited and 6,000 ordinary shares held by Everbright International Development Limited; (ii) an amendment of our share capital from $50,000 divided into 50,000 ordinary shares of $1.00 par value per share to $50,000 divided into 40,000 Class A Ordinary Shares of $1.00 par value per share and 10,000 Class B Ordinary Shares of $1.00 par value per share; (iii) a re-designation of one issued ordinary share held by Shengfeng International Limited into one Class B Ordinary Share; and (iv) a subdivision of our share capital from $50,000 divided into 40,000 Class A Ordinary Shares of $1.00 par value per share and 10,000 Class B Ordinary Shares of $1.00 par value per share to US$50,000 divided into 400,000,000 Class A Ordinary Shares of $0.0001 par value per share and 100,000,000 Class B Ordinary Shares of $0.0001 par value per share. 1 On December 18, 2020, we issued an aggregate of 38,120,000 Class A Ordinary Shares to 12 investors for an aggregate consideration of $3,812.
On December 18, 2020, we undertook the following corporate actions: (i) a repurchase of 43,999 ordinary shares held by Shengfeng International Limited and 6,000 ordinary shares held by Everbright International Development Limited; (ii) an amendment of our share capital from $50,000 divided into 50,000 ordinary shares of $1.00 par value per share to $50,000 divided into 40,000 Class A Ordinary Shares of $1.00 par value per share and 10,000 Class B Ordinary Shares of $1.00 par value per share; (iii) a re-designation of one issued ordinary share held by Shengfeng International Limited into one Class B Ordinary Share; and (iv) a subdivision of our share capital from $50,000 divided into 40,000 Class A Ordinary Shares of $1.00 par value per share and 10,000 Class B Ordinary Shares of $1.00 par value per share to US$50,000 divided into 400,000,000 Class A Ordinary Shares of $0.0001 par value per share and 100,000,000 Class B Ordinary Shares of $0.0001 par value per share.
We may be subject to catastrophic events. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber-attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic including COVID-19, or other catastrophic event could cause delays in providing services or performing other critical functions.
A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber-attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic including COVID-19, or other catastrophic event could cause delays in providing services or performing other critical functions.
If relevant authorities determine that we have failed to report franchising activities in accordance with the regulations, we may be subject to fines ranging from RMB10,000 (approximately USD1,400) to RMB50,000 (approximately USD7,200) and if we fail to comply within the rectification period determined by the competent governmental authority, we may be subject to an additional fine ranging from RMB50,000 (approximately USD7,200) to RMB100,000 (approximately USD14,000) and the relevant authority may issue a public reprimand.
If relevant authorities determine that we have failed to report franchising activities in accordance with the regulations, we may be subject to fines ranging from RMB10,000 (approximately USD1,400) to RMB50,000 (approximately USD7,200) and if we fail to comply within the rectification period determined by the competent governmental authority, we may be subject to an additional fine ranging from RMB50,000 (approximately USD7,200) to RMB100,000 (approximately USD14,000) and the relevant authority may issue a public reprimand. 53 We face challenges associated with diversifying our service offerings.
(1) As of the date of this annual report, Shengfeng Logistics is held by Fujian Yunlian Shengfeng Industry Co., Ltd., which is 90% owned by Yongxu Liu, who is our chief executive officer, chairman of the board and president, as to 54.58%, Yongxu Liu directly as to 30.99%, Zhoushan Zhongxin Equity Investment Partnership (Limited Partnership) as to 1.5%, Zhoushan Guancheng Equity Investment Partnership (Limited Partnership) as to 2%, Daqiu Tang as to 0.85%, Yelie Song as to 0.97%, Zhiping Yang as to 1.58%, Chaoxin Yang as to 0.96%, Guangsheng Lin as to 0.85%, Zhuangyuan Lin as to 2.59%, Zhongdeng Pan as to 2.13% and Yufan Chen as to 1%, who collectively hold 100% of the shares of Shengfeng Logistics.
(which is 90% owned by Yongxu Liu, who is our chief executive officer, chairman of the board and president), as to 54.58%, Yongxu Liu directly as to 30.99%, Zhoushan Zhongxin Equity Investment Partnership (Limited Partnership) as to 1.5%, Zhoushan Guancheng Equity Investment Partnership (Limited Partnership) as to 2%, Daqiu Tang as to 0.85%, Yelie Song as to 0.97%, Zhiping Yang as to 1.58%, Chaoxin Yang as to 0.96%, Guangsheng Lin as to 0.85%, Zhuangyuan Lin as to 2.59%, Zhongdeng Pan as to 2.13% and Yufan Chen as to 1%, who collectively hold 100% of the shares of Shengfeng Logistics.
We face risks associated with the freight handled through our network. We, through the VIE and the VIE’s subsidiaries, handle a large volume of freights across our network daily, and we face challenges with respect to the protection and examination of freights.
We, through the VIE and the VIE’s subsidiaries, handle a large volume of freights across our network daily, and we face challenges with respect to the protection and examination of freights.
Hebei, the PRC February 17, 2016 100 % Transportation and warehouse storage management service 14 Shengfeng Logistics (Henan) Co., Ltd. Henan, the PRC March 28, 2016 100 % Transportation and warehouse storage management service 15 Shengfeng Logistics (Liaoning) Co., Ltd. Liaoning, the PRC March 2, 2016 100 % Transportation and warehouse storage management service 16 Shengfeng Logistics (Yunnan) Co., Ltd.
Shandong, the PRC March 15, 2016 100 % Transportation and warehouse storage management service 15 Shengfeng Logistics Hebei Co., Ltd. Hebei, the PRC February 17, 2016 100 % Transportation and warehouse storage management service 16 Shengfeng Logistics (Henan) Co., Ltd. Henan, the PRC March 28, 2016 100 % Transportation and warehouse storage management service 17 Shengfeng Logistics (Liaoning) Co., Ltd.
Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual to warnings, fines, or other liabilities. 35 As of the date of this annual report, Mr.
Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual to warnings, fines, or other liabilities.
Personal injuries or property damages may arise if such incidents escalate. 45 Any of the foregoing could disrupt our services, cause us to incur substantial expenses, and divert the time and attention of our management. We and third-party transportation providers may face claims and incur significant liabilities if found liable or partially liable for any of injuries, damages, or losses.
Any of the foregoing could disrupt our services, cause us to incur substantial expenses, and divert the time and attention of our management. We and third-party transportation providers may face claims and incur significant liabilities if found liable or partially liable for any of injuries, damages, or losses.
GAAP and SEC reporting experience and qualifications to strengthen the financial reporting functions and to set up a financial and system control framework; (ii) implementing regular and continuous U.S.
GAAP and SEC reporting experience and qualifications to strengthen the financial reporting functions and to set up a financial and system control framework; (ii) implementing more frequent U.S.
Business Overview—Regulation—Regulations Relating to Internet Security.” The Cybersecurity Law, which was adopted by the National People’s Congress on November 7, 2016 and came into force on June 1, 2017 provide that network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services.
Business Overview—Regulation—Regulations Relating to Internet Security.” The Cybersecurity Law, which was adopted by the National People’s Congress on November 7, 2016, amended on October 28,2025, and came into force on January 1, 2026, provides that network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services.
If fuel prices rise significantly in the future, we will experience the pressure of increased costs. 48 Our past growth rates may not be indicative of our future growth, and if we are not able to manage our growth effectively, our business and prospects may be materially and adversely affected.
If fuel prices rise significantly due to geopolitical conflicts or other reasons in the future, we will experience the pressure of increased costs. Our past growth rates may not be indicative of our future growth, and if we are not able to manage our growth effectively, our business and prospects may be materially and adversely affected.
These rights, however, may be provided in a company’s amended and restated articles of association. Our amended and restated articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting.
Our amended and restated articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting.
Guizhou, the PRC August 15, 2017 100 % Transportation and warehouse storage management service 11 Shengfeng Logistics (Tianjin) Co., Ltd. Tianjin, the PRC March 8, 2016 100 % Transportation and warehouse storage management service 12 Shengfeng Logistics (Shandong) Co., Ltd. Shandong, the PRC March 15, 2016 100 % Transportation and warehouse storage management service 13 Shengfeng Logistics Hebei Co., Ltd.
Beijing, the PRC April 13, 2016 100 % Transportation and warehouse storage management service 12 Shengfeng Logistics (Guizhou) Co., Ltd. Guizhou, the PRC August 15, 2017 100 % Transportation and warehouse storage management service 13 Shengfeng Logistics (Tianjin) Co., Ltd. Tianjin, the PRC March 8, 2016 100 % Transportation and warehouse storage management service 14 Shengfeng Logistics (Shandong) Co., Ltd.
These rights, however, may be provided in a company’s articles of association. Our articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting.
Our articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting.
Other than the social insurance and housing fund contributions and the estimate of costs to maintain or reduce the number of dispatched workers, we are currently not able to quantify the contribution amounts that we will need to make for us to be in full compliance with all PRC labor-related laws and regulations.
However, our estimate of costs may not be accurate or sufficient and may not be accumulated by such time. 35 Other than the social insurance and housing fund contributions and the estimate of costs to maintain or reduce the number of dispatched workers, we are currently not able to quantify the contribution amounts that we will need to make for us to be in full compliance with all PRC labor-related laws and regulations.
March 31, 2023) shall be deemed as the Existing Issuers. Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.
Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.
The Opinions, the Trial Measures, the revised Provisions and any related implementing rules to be enacted may subject us to compliance requirement in the future. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of the Opinions, the Trial Measures or any future implementation rules on a timely basis, or at all.
The Opinions, the Trial Measures, the revised Provisions and any related implementing rules that may be issued in the future may amend our compliance obligations. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of the Opinions, the Trial Measures or any future implementation rules on a timely basis, or at all.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

158 edited+20 added−23 removed319 unchanged
With our WMS, we are able to effectively monitor the capacity of our warehouses on a real-time basis and track each and every movement of a good from its entry into our warehouse to its delivery at its destination, including receiving, storing, packing, and shipping.
With our WMS, we are able to effectively monitor the capacity of our warehouses on a real-time basis and track each and every movement of a good from its entry into our warehouse to its delivery at its destination, including receiving, storing, packing, and shipping.
The lessor is entitled to terminate the lease contract if the lessee subleases the premises without the consent of the lessor. In addition, if the lessor transfers the premises, the lease contract between the lessee and the lessor will still remain valid.
The lessor is entitled to terminate the lease contract if the lessee subleases the premises without the consent of the lessor. In addition, if the lessor transfers the premises, the lease contract between the lessee and the lessor will still remain valid.
Fuqing City, Fuzhou Province, China 349,132.7 Until April 10, 2063 318,390.98 for Warehouse Storage and Management Services, 28,588.95 for Regional Sorting Center and 2,152.78 for offices Suzhou City, Jiangsu Province, China 187,515.50 Until December 30, 2056 131,319.7 for Warehouse Storage and Management Services and 56,195.8 for offices Suzhou City, Jiangsu Province, China 406,527.71 Until January 29, 2058 370,278.5 for Warehouse Storage and Management Services and 36,249.21 for Regional Sorting Center Ningde City, Fujian Province, China 592,889.96 Until April 12, 2073 545,652.54 for Warehouse Storage and Management Services and 47,237.42 for offices We believe that the facilities that we currently own and lease are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate our future growth.
Fuqing City, Fuzhou Province, China 349,132.7 Until April 10, 2063 318,390.98 for Warehouse Storage and Management Services, 28,588.95 for Regional Sorting Center and 2,152.78 for offices Suzhou City, Jiangsu Province, China 187,515.50 Until December 30, 2056 131,319.7 for Warehouse Storage and Management Services and 56,195.8 for offices Suzhou City, Jiangsu Province, China 406,527.71 Until January 29, 2058 370,278.5 for Warehouse Storage and Management Services and 36,249.21 for Regional Sorting Center Ningde City, Fujian Province, China 592,889.96 Until April 12, 2073 545,652.54 for Warehouse Storage and Management Services and 47,237.42 for offices 82 We believe that the facilities that we currently own and lease are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate our future growth.
For more details on our technology infrastructure and intellectual property, please refer to “—Our Technology Infrastructure” and “—Intellectual Property.” Properties and Facilities Our principal executive office is located at Shengfeng Building, No. 478 Fuxin East Road, Jin’an District, Fuzhou City, Fujian Province, People’s Republic of China, 350001, where we, through Shengfeng Logistics, lease such property from a related party, Fuzhou Tianyu Shengfeng Industrial Co., Ltd., a company controlled by Yongxu Liu, our CEO and Chairman, with an area of approximately 24,886.16 square feet, with a lease term from November 1, 2020 to October 31, 2022 and was renewed to October 31, 2027 with a monthly rent of RMB115,648 (approximately US$16,412).
For more details on our technology infrastructure and intellectual property, please refer to “—Our Technology Infrastructure” and “—Intellectual Property.” Properties and Facilities Our principal executive office is located at Shengfeng Building, No. 478 Fuxin East Road, Jin’an District, Fuzhou City, Fujian Province, People’s Republic of China, 350001, where we, through Shengfeng Logistics, lease such property from a related party, Fuzhou Tianyu Shengfeng Industrial Co., Ltd., a company controlled by Yongxu Liu, our CEO and Chairman, with an area of approximately 24,886 square feet, with a lease term originally from November 1, 2020 to October 31, 2022 and was renewed to October 31, 2027 with a monthly rent of RMB115,648 (approximately US$16,412).
Our route planning and management benefit from our years of experiences and information technology infrastructures, and they enable us to track freight movement on a real-time basis. Among our regional sorting centers, 3 are located on lands that we own and the remaining 23 are located on leased lands. Cloud OFCs See “—Service Offerings by Us—Cloud Storage Services” above.
Our route planning and management benefit from our years of experiences and information technology infrastructures, and they enable us to track freight movement on a real-time basis. Among our regional sorting centers, 3 are located on lands that we own and the remaining 23 are located on leased lands. 73 Cloud OFCs See “—Service Offerings by Us—Cloud Storage Services” above.
Risk Factors—Risks Relating to Doing Business in the PRC—The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China . ” C. Organizational Structure . See “—A. History and Development of the Company.” D.
Risk Factors—Risks Relating to Doing Business in the PRC—The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China . ” 99 C. Organizational Structure . See “—A. History and Development of the Company.” D.
Such measures include, but are not limited to, outsourcing our labor-related matters and making payments for unpaid social insurance and housing fund contributions, which may increase the costs of our business and operation. We enter into standard labor agreements with our full-time employees with standard confidentiality and non-compete provisions.
Such measures include, but are not limited to, outsourcing our labor-related matters and making payments for unpaid social insurance and housing fund contributions, which may increase the costs of our business and operation. 80 We enter into standard labor agreements with our full-time employees with standard confidentiality and non-compete provisions.
We believe this network model allows us to achieve strong operating results while maintaining and minimizing fixed costs and capital requirements, which results in higher return on earnings and equities. 61 Operational efficiency, cost management, and competitive pricing are critical to the success of a contract logistics company.
We believe this network model allows us to achieve strong operating results while maintaining and minimizing fixed costs and capital requirements, which results in higher return on earnings and equities. Operational efficiency, cost management, and competitive pricing are critical to the success of a contract logistics company.
We have implemented a new policy to focus on developing B2B freight transportation services in anticipation of using our current resources in a more concentrated and efficient manner, as we pursue lower operating costs and higher profits. We aim to focus mainly on contract logistics, primarily catering to and targeting major corporate clients.
We have implemented a policy to focus on developing B2B freight transportation services in anticipation of using our current resources in a more concentrated and efficient manner, as we pursue lower operating costs and higher profits. We aim to focus mainly on contract logistics, primarily catering to and targeting major corporate clients.
Any proposal discussed and approved during the meeting will be presented to the management for further discussion and decision. 82 From time to time, we contract with some third-party software design companies for licenses to use some of the systems they designed and developed, such as some financial reporting and accounting systems.
Any proposal discussed and approved during the meeting will be presented to the management for further discussion and decision. From time to time, we contract with some third-party software design companies for licenses to use some of the systems they designed and developed, such as some financial reporting and accounting systems.
Our service outlets also receive small shipment orders and collect and send freight to our regional sorting centers from time to time. 68 Step 2: Freight Sorting and Line-Haul Transportation Upon receiving freight, the regional sorting center will sort, pack, and dispatch the freights to the destination regional sorting center (line-haul transportation services between our regional sorting centers are provided).
Our service outlets also receive small shipment orders and collect and send freight to our regional sorting centers from time to time. Step 2: Freight Sorting and Line-Haul Transportation Upon receiving freight, the regional sorting center will sort, pack, and dispatch the freights to the destination regional sorting center (line-haul transportation services between our regional sorting centers are provided).
As of the date of this annual report, other than that we have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, we believe that we are currently compliant with the foregoing laws and regulation in all material respects. 94 The Interim Provisions on Labor Dispatching The Interim Provisions on Labor Dispatching, issued by the Ministry of Human Resources and Social Security of the People’s Republic of China on January 24, 2014, which came into effect on March 1, 2014, require the number of dispatched workers not to exceed 10% of the total number of 1) the employees that are employed directly by an enterprise and 2) the dispatched workers.
As of the date of this annual report, other than that we have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, we believe that we are currently compliant with the foregoing laws and regulation in all material respects. 92 The Interim Provisions on Labor Dispatching The Interim Provisions on Labor Dispatching, issued by the Ministry of Human Resources and Social Security of the People’s Republic of China on January 24, 2014, which came into effect on March 1, 2014, require the number of dispatched workers not to exceed 10% of the total number of 1) the employees that are employed directly by an enterprise and 2) the dispatched workers.
With WMS, we are able to increase the accuracy of goods dispatching, to enhance the efficiency of the operation, to improve the quality management and to control and realize the warehouse management process visualization. 79 Our WMS operates according to certain rules of warehouse management including rules of pick-up, quality inspection, warehouse and storage separation and arrangement.
With WMS, we are able to increase the accuracy of goods dispatching, to enhance the efficiency of the operation, to improve the quality management and to control and realize the warehouse management process visualization. Our WMS operates according to certain rules of warehouse management including rules of pick-up, quality inspection, warehouse and storage separation and arrangement.
The Personal Information Protection Law also strengthens the punishment for those who illegally process personal information. On August 30, 2024, The State Council promulgated the Administration Measures for Cyber Data Security, or the “Cyber Data Security Measure”, which took effect on January 1, 2025.
The Personal Information Protection Law also strengthens the punishment for those who illegally process personal information. 88 On August 30, 2024, The State Council promulgated the Administration Measures for Cyber Data Security, or the “Cyber Data Security Measure”, which took effect on January 1, 2025.
Shengfeng TMS tracks each client’s order and allows us to view and issue bills to our clients and track client payments. Client portal and service support. We maintain an online client portal, where our clients may register their own accounts.
Shengfeng TMS tracks each client’s order and allows us to view and issue bills to our clients and track client payments. 77 Client portal and service support. We maintain an online client portal, where our clients may register their own accounts.
We charge collection fees equal to 4% of the collected payment for a transaction, and we wire the collected payment back to the seller on the same day of collection. Customs declaration services.
We charge collection fees equal to 4% of the collected payment for a transaction, and we wire the collected payment back to the seller on the same day of collection. 71 Customs declaration services.
The following table shows pertinent information of the properties we, through three of the VIE’s subsidiaries, own as of December 31, 2024: Location Area (Square Feet) Term of Use Current Use Tong Zhou District, Beijing, China 159,901.66 October 31, 1994 to October 30, 2044 Construction is currently underway as of the date of this annual report.
The following table shows pertinent information of the properties we, through three of the VIE’s subsidiaries, own as of December 31, 2025: Location Area (Square Feet) Term of Use Current Use Tong Zhou District, Beijing, China 159,901.66 October 31, 1994 to October 30, 2044 Construction is currently underway as of the date of this annual report.
Our client management systematically allows us to analyze current conditions, which in turn will help us to improve our efficiency and increase our margin. For orders with a gross margin below 5%, we will conduct cost analyzations and adjust unit prices, frights units, frights types, and/or transportation routes accordingly in order to conserve resources and mitigate cost.
Our client management systematically allows us to analyze current conditions, which in turn will help us to improve our efficiency and increase our margin. For orders with a gross margin below 5%, we will conduct cost analyzations and adjust unit prices, freight units, freight types, and/or transportation routes accordingly in order to conserve resources and mitigate cost.
Patent As of the date of this annual report, we had registered, through Guangdong Shengfeng Logistics Co., Ltd., one of the VIE’s subsidiaries, 2 invention patents and 5 utility model patents with the National Intellectual Property Administration. Domain Name As of the date of this annual report, we had registered, through the VIE, 12 domain names, including our main website.
Patent As of the date of this annual report, we had registered, through Guangdong Shengfeng Logistics Co., Ltd., one of the VIE’s subsidiaries, 3 invention patents and 5 utility model patents with the National Intellectual Property Administration. Domain Name As of the date of this annual report, we had registered, through the VIE, 12 domain names, including our main website.
We, through the VIE and the VIE’s subsidiaries, maintain an in-house R&D team which consists of four departments in Shengfeng Logistics as of the date of this report: Product Department (3 employees and 1 manager), Operation and Maintenance Department (2 employees), TMS Research and Development Department (8 employees and 2 managers) and WMS Research and Development Department (4 employees and 1 manager).
We, through the VIE and the VIE’s subsidiaries, maintain an in-house R&D team which consists of four departments in Shengfeng Logistics as of the date of this report: Product Department (3 employees and 1 manager), Operation and Maintenance Department (2 employees and 1 manager), TMS Research and Development Department (7 employees and 1 managers) and WMS Research and Development Department (4 employees and 1 manager).
Our automated system continues to respond to inquiries outside of the normal business hours and forwards complicated inquiries to our client service representatives for further handling. Our call centers are localized with branch offices in over 20 provinces in China with mostly local hires to leverage their local knowledge.
Our automated system continues to respond to inquiries outside of the normal business hours and forwards complicated inquiries to our client service representatives for further handling. Our call centers are localized with branch offices in over 22 provinces in China with mostly local hires to leverage their local knowledge.
About 17% of our freight transportation services are provided by our self-owned fleet and the rest are provided by third-party transportation providers. For further details on these transportation providers, see “— Our Transportation Providers.” To meet our clients’ different needs, we typically provide individualized transportation services on a contractual basis.
About 16% of our freight transportation services are provided by our self-owned fleet and the rest are provided by third-party transportation providers. For further details on these transportation providers, see “— Our Transportation Providers.” To meet our clients’ different needs, we typically provide individualized transportation services on a contractual basis.
We have consolidated the financial results of the VIE and the VIE’s subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.
We have consolidated the financial results of the VIE and the VIE’s subsidiaries in our consolidated financial statements in accordance with U.S.
Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE’s subsidiaries in China, therefore, you will not directly hold equity interests in the VIE or the VIE’s subsidiaries, and you may never directly hold equity interests in the VIE or the VIE’s subsidiaries through your investment in our Class A Ordinary Shares.
GAAP. 62 Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE’s subsidiaries in China, therefore, you will not directly hold equity interests in the VIE or the VIE’s subsidiaries, and you may never directly hold equity interests in the VIE or the VIE’s subsidiaries through your investment in our Class A Ordinary Shares.
Therefore, we provide ongoing trainings to our employees and transportation providers, and we conduct regular performance reviews to ensure the quality of our services. We, through the VIE and the VIE’s subsidiaries, operate a call center system to provide real-time assistance to our clients by our approximately 203 client service representatives 10 hours a day, 7 days a week.
Therefore, we provide ongoing trainings to our employees and transportation providers, and we conduct regular performance reviews to ensure the quality of our services. 75 We, through the VIE and the VIE’s subsidiaries, operate a call center system to provide real-time assistance to our clients by our approximately 226 client service representatives 10 hours a day, 7 days a week.
The permits for registered domain names are effective for five years, which are subject to renewals, cancellations or revocations. 93 Trade secrets According to the PRC Anti-Unfair Competition Law, promulgated by the SCNPC in September 1993, as amended in November 4, 2017 and April 23, 2019 respectively, the term “trade secrets” refers to technical, operational or other commercial information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders through corresponding confidentiality measures.
The permits for registered domain names are effective for five years, which are subject to renewals, cancellations or revocations. 91 Trade secrets According to the PRC Anti-Unfair Competition Law, promulgated by the SCNPC in September 1993, as amended in November 4, 2017, April 23, 2019 and June 27, 2025 respectively, the term “trade secrets” refers to technical, operational or other commercial information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders through corresponding confidentiality measures.
Through years of operation, we, through the VIE and the VIE’s subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities across 32 provinces, as of December 31, 2024.
Through years of operation, we, through the VIE and the VIE’s subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities across 32 provinces, as of December 31, 2025.
Key Information — Our VIE Agreements . ” 62 Our Competitive Strengths We believe we have the following competitive strengths: Contract Logistics Service Provider with Established Operating History in China Since 2001, and as of the date of this annual report, we, through the VIE and the VIE’s subsidiaries, have operated as a contract logistics service provider for 23 years.
Key Information — Our VIE Agreements . ” Our Competitive Strengths We believe we have the following competitive strengths: Contract Logistics Service Provider with Established Operating History in China Since 2001, and as of the date of this annual report, we, through the VIE and the VIE’s subsidiaries, have operated as a contract logistics service provider for 24 years.
Consequently, we have disposed of more than 410 self-owned gasoline-powered trucks and vehicles and purchased 16 electric heavy-duty trucks as of the date of this annual report.
Consequently, we have disposed of more than 420 self-owned gasoline-powered trucks and vehicles and purchased 16 electric heavy-duty trucks as of the date of this annual report.
The network partners are solely responsible for the rights and obligations under the service agreements entered into by and between them and their clients. For the fiscal year ended December 31, 2022, our network partners contributed approximately 0.31% of our income from operations.
The network partners are solely responsible for the rights and obligations under the service agreements entered into by and between them and their clients. For the fiscal year ended December 31, 2023, our network partners contributed approximately 0.14% of our income from operations.
Pursuant to Company Law (2023), where any shareholder fails to make payment for any of their shares prior to the deadline provided in the company’s articles of association, their unpaid equity interests may be forfeited. 86 Regulations Relating to Road Transportation Pursuant to the PRC Regulations on Road Transportation promulgated by the State Council in April 2004 and most recently amended in July 2023, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transportation in June 2005 and most recently amended in November 2023, or the Road Freight Provisions, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services.
Pursuant to Company Law (2023), where any shareholder fails to make payment for any of their shares prior to the deadline provided in the company’s articles of association, their unpaid equity interests may be forfeited. 84 Regulations Relating to Road Transportation Pursuant to the PRC Regulations on Road Transportation promulgated by the State Council in April 2004 and most recently amended in July 2023, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transportation in June 2005 and most recently amended and effective in March 2026, or the Road Freight Provisions, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services.
The following map illustrates our Cloud OFCs network as of December 31, 2024. 70 By utilizing our Cloud OFCs, we provide the following services to our clients through the VIE and the VIE’s subsidiaries: ● Storage. We offer reliable and convenient storage solutions for a variety of commercial needs through the warehouses owned or leased by us.
The following map illustrates our Cloud OFCs network as of December 31, 2025. 69 By utilizing our Cloud OFCs, we provide the following services to our clients through the VIE and the VIE’s subsidiaries: ● Storage. We offer reliable and convenient storage solutions for a variety of commercial needs through the warehouses owned or leased by us.
We, through the VIE and the VIE’s subsidiaries, have established business relationships with over 4,000 medium to large-scale corporate clients, and over 110,000 transportation providers, as of December 31, 2024. Moreover, our reach extends to individual consumers, small and medium corporate clients, and large-cap companies through our network.
We, through the VIE and the VIE’s subsidiaries, have established business relationships with over 4,000 medium to large-scale corporate clients, and over 122,000 transportation providers, as of December 31, 2025. Moreover, our reach extends to individual consumers, small and medium corporate clients, and large-cap companies through our network.
We will make specific marketing plans and take different approaches based on the various industries, sizes, contract amounts and needs of our clients. 81 Employees As of December 31, 2024, 2023, and 2022, we, through the VIE and the VIE’s subsidiaries, had a total of 1,263, 1,341 and 1,550 full-time employees located in China, respectively.
We will make specific marketing plans and take different approaches based on the various industries, sizes, contract amounts and needs of our clients. Employees As of December 31, 2025, 2024 and 2023, we, through the VIE and the VIE’s subsidiaries, had a total of 1,416, 1,263 and 1,341 full-time employees located in China, respectively.
The terms of such leases range from 1 to 5 years. As of the date of December 31, 2024, we, through the VIE and the VIE’s subsidiaries, directly operate 39 Cloud OFCs across China to provide warehouse storage and management services.
The terms of such leases range from 1 to 5 years. As of the date of December 31, 2025, we, through the VIE and the VIE’s subsidiaries, directly operate 57 Cloud OFCs across China to provide warehouse storage and management services.
Instead, our clients may purchase shipment protection services for valuable items, and we will compensate those clients based on the declared value in the event of loss or damage that was caused by us.
We do not purchase insurance for items delivered by us. Instead, our clients may purchase shipment protection services for valuable items, and we will compensate those clients based on the declared value in the event of loss or damage that was caused by us.
In addition, wholly foreign-owned enterprises in the PRC are also required to allocate at least 10% of their respective accumulated profits after tax each year, if any, to certain reserve funds unless these accumulated reserves have reached 50% of the registered capital of such enterprises.
In addition, wholly foreign-owned enterprises in the PRC are also required to allocate at least 10% of their respective accumulated profits after tax each year, if any, to certain reserve funds unless these accumulated reserves have reached 50% of the registered capital of such enterprises. These reserves are not distributable as cash dividends.
Collection on delivery services. Under circumstances where a seller ships goods to a buyer, we provide the seller with the option to authorize us to collect payments from the recipient on its behalf.
Under circumstances where a seller ships goods to a buyer, we provide the seller with the option to authorize us to collect payments from the recipient on its behalf.
For the fiscal years ended December 31, 2024 and 2023, approximately 17% and 23% of our freight transportation services were provided by our self-owned fleet and the balance was outsourced and provided by independent third-party transportation providers.
For the fiscal years ended December 31, 2025 and 2024, approximately 16% and 17% of our freight transportation services were provided by our self-owned fleet and the balance was outsourced and provided by independent third-party transportation providers.
We recorded net profit of approximately $10.8 million and $10.3 million for the fiscal years ended December 31, 2024 and 2023, respectively. Shengfeng Development Limited is a holding company incorporated under the laws of the Cayman Islands and it is not a Chinese operating company.
We recorded net profit of approximately $12.2 million and $10.8 million for the fiscal years ended December 31, 2025 and 2024, respectively. Shengfeng Development Limited is a holding company incorporated under the laws of the Cayman Islands and it is not a Chinese operating company.
Our Transportation Providers During the fiscal years ended December 31, 2024, 2023 and 2022, we, through the VIE and the VIE’s subsidiaries, cooperated with approximately 119,467, 64,090 and 45,558 transportation providers, respectively. These transportation providers are of all sizes, including owner-operators of a single truck, private fleets, and large trucking companies.
Our Transportation Providers During the fiscal years ended December 31, 2025, 2024 and 2023, we, through the VIE and the VIE’s subsidiaries, cooperated with approximately 122,368, 119,467 and 64,090 transportation providers, respectively. These transportation providers are of all sizes, including owner-operators of a single truck, private fleets, and large trucking companies.
The terms of such leases range from 1 to 3 years. As of the date of December 31, 2024, we, through the VIE and the VIE’s subsidiaries, directly operate 24 service outlets across China.
The terms of such leases range from 1 to 3 years. As of the date of December 31, 2025, we, through the VIE and the VIE’s subsidiaries, directly operate 14 service outlets across China.
To increase our transportation efficiency, we utilize the drop and pull transportation method. As of December 31, 2024, we, through the VIE and the VIE’s subsidiaries, also owned 131 vehicles for our short-haul transportation.
To increase our transportation efficiency, we utilize the drop and pull transportation method. As of December 31, 2025, we, through the VIE and the VIE’s subsidiaries, also owned 118 vehicles for our short-haul transportation.
As of the date of this annual report, we, through one of the VIE’s subsidiaries, hold land use rights with respect to one property with an aggregate gross area of approximately 484,700 square feet and an aggregate gross floor area of approximately 592,000 square feet in Ningde City, Fujian Province, China.
As of the date of this annual report, we, through one of the VIE’s subsidiaries, hold land use rights with respect to one property with an aggregate gross area of approximately 484,700 square feet and an aggregate gross floor area of approximately 592,000 square feet in Ningde City, Fujian Province, China. The land is subject to a 50-year use term.
Besides, responsible persons may be subject to fines between RMB10,000 and RMB100,000. 89 According to the Regulations for Security Protection of Critical Information Infrastructure, or the CIIO Regulation Promulgated by State Council in July 2021, effective on September 1, 2021, critical information infrastructure refers to any important network facilities or information systems of an important industry or field, such as public communication and information services, energy, transport, water conservation, finance, public services, e-government affairs, science, and technology industry for national defense, among other industries and sectors that may pose a serious threat to national security, people’s livelihood, and public interests in the event of damage, loss of function, or data leakage.
According to the Regulations for Security Protection of Critical Information Infrastructure, or the CIIO Regulation Promulgated by State Council in July 2021, effective on September 1, 2021, critical information infrastructure refers to any important network facilities or information systems of an important industry or field, such as public communication and information services, energy, transport, water conservation, finance, public services, e-government affairs, science, and technology industry for national defense, among other industries and sectors that may pose a serious threat to national security, people’s livelihood, and public interests in the event of damage, loss of function, or data leakage.
In addition, although the unregistered lease agreements are considered binding agreements, in practice, some of the remedies generally available to the registered lease agreements may not be fully applicable to the unregistered lease agreements, such as specific performance of lease agreement against new purchasers of the property.
In addition, although the unregistered lease agreements are considered binding agreements, in practice, some of the remedies generally available to the registered lease agreements may not be fully applicable to the unregistered lease agreements, such as specific performance of lease agreement against new purchasers of the property. Some of our leases have not completed the registration.
The land is subject to a 50-year use term. 83 As of the date of this annual report, we, through one of the VIE’s subsidiaries, owned 4 land use rights with aggregate gross areas of approximately 340,388.43 square feet in Tong Zhou District, Beijing, China. The use terms of such land is 50 years.
As of the date of this annual report, we, through one of the VIE’s subsidiaries, owned 4 land use rights with aggregate gross areas of approximately 340,388.43 square feet in Tong Zhou District, Beijing, China. The use terms of such land is 50 years.
As of December 31, 2024, the VIE and the VIE’s subsidiaries’ transportation and sorting network is comprised of 26 regional sorting centers, 39 Cloud OFCs and 24 service outlets. Our network in China covered 382 cities in over 32 provinces as of December 31, 2024. Extensive and Growing Ecosystem Our ecosystem is comprised of the Company, clients, and transportation providers.
As of December 31, 2025, the VIE and the VIE’s subsidiaries’ transportation and sorting network is comprised of 26 regional sorting centers, 57 Cloud OFCs and 14 service outlets. Our network in China covered 382 cities in over 32 provinces as of December 31, 2025. Extensive and Growing Ecosystem Our ecosystem is comprised of the Company, clients, and transportation providers.
Regulations Relating to Cargo Vehicles Pursuant to the Administrative Provisions concerning the Running of Cargo Vehicles with Out-of-Gauge Goods promulgated by the Ministry of Transportation, or the “Cargo Provisions,” took effect in August 2016 and most recently amended in August 2021, cargo vehicles running on public roads shall not carry cargo weighing more than the limits prescribed by this regulation and their dimensions shall not exceed those as set forth in the same regulation.
The Measures set forth detailed requirements with respect to consignors, carriers, loaders and drivers. 85 Regulations Relating to Cargo Vehicles Pursuant to the Administrative Provisions concerning the Running of Cargo Vehicles with Out-of-Gauge Goods promulgated by the Ministry of Transportation, or the “Cargo Provisions,” took effect in August 2016 and most recently amended in August 2021, cargo vehicles running on public roads shall not carry cargo weighing more than the limits prescribed by this regulation and their dimensions shall not exceed those as set forth in the same regulation.
Under his leadership, our Company started off in 2001 from being a small-sized logistics service provider with only 60 employees, to becoming one of the largest logistics service providers in China with total transportation volume of approximately 16,510,000 tons for the fiscal year ended December 31, 2024 and we have 1,263 employees as of December 31, 2024.
Under his leadership, our Company started off in 2001 from being a small-sized logistics service provider with only 60 employees, to becoming one of the largest logistics service providers in China with total transportation volume of approximately 21,349,000 tons for the fiscal year ended December 31, 2025 and we have 1,416 employees as of December 31, 2025.
We also design and develop different service packages to cater for the demands of clients in different industries so that we could extend our reach of potential clients in similar industries and upstream and downstream suppliers.
We participate in conferences and exhibitions in different industries to expand our pool of potential clients. We also design and develop different service packages to cater for the demands of clients in different industries so that we could extend our reach of potential clients in similar industries and upstream and downstream suppliers.
These reserves are not distributable as cash dividends. 97 According to the EIT Law and its implementing rules, dividends paid to investors of an eligible PRC resident enterprise can be exempted from EIT and dividends paid to foreign investors are subject to a withholding tax rate of 10%, unless relevant tax agreements entered into by the PRC government provide otherwise.
According to the EIT Law and its implementing rules, dividends paid to investors of an eligible PRC resident enterprise can be exempted from EIT and dividends paid to foreign investors are subject to a withholding tax rate of 10%, unless relevant tax agreements entered into by the PRC government provide otherwise.
LTL shipments typically weigh between 15 kilograms and 3,000 kilograms. We mainly provide transportation services for B2B LTL shipments weighing between 500 kilograms and 3,000 kilograms.
We mainly provide transportation services for B2B LTL shipments weighing between 500 kilograms and 3,000 kilograms.
Therefore, in the manufacturing sector, there is now equal national treatment of domestic and foreign investments. 85 However, the 2024 Negative List prescribes that any domestic enterprise engaging in businesses prohibited by the Negative Lists that lists, issues securities and trades shares overseas must obtain pre-approval consent from relevant competent regulator; overseas investors must not engage in the operation and management of the enterprise, and the percentage of foreign shareholding is subject to the relevant provisions in the administrative measures for domestic securities investments by foreign investors.
However, the 2024 Negative List prescribes that any domestic enterprise engaging in businesses prohibited by the Negative Lists that lists, issues securities and trades shares overseas must obtain pre-approval consent from relevant competent regulator; overseas investors must not engage in the operation and management of the enterprise, and the percentage of foreign shareholding is subject to the relevant provisions in the administrative measures for domestic securities investments by foreign investors.
For details on third-party transportation providers, see “—Our Transportation Providers.” 75 Service Outlets As of December 31, 2024, we, through the VIE and the VIE’s subsidiaries, operated 24 service outlets across China.
For details on third-party transportation providers, see “—Our Transportation Providers.” Service Outlets As of December 31, 2025, we, through the VIE and the VIE’s subsidiaries, operated 14 service outlets across China.
As of December 31, 2024, all of the service outlets operated by us with an aggregate gross floor area of approximately 102,016.85 square feet are on the land we leased. The terms of such leases range from 1 to 5 years.
As of December 31, 2025, all of the service outlets operated by us with an aggregate gross floor area of approximately 76,356 square feet are on the land we leased. The terms of such leases range from 1 to 5 years.
They are “cloud-based” because we take full responsibility for the optimal allocation of our clients’ inventory into different Cloud OFCs and save our clients from the hassle of day-to-day operations, therefore, from our clients’ point of view, these Cloud OFCs are “in the cloud.” As of December 31, 2024, we, through the VIE and the VIE’s subsidiaries, directly operated 39 Cloud OFCs across China with a total area of approximately 4,095,491 square feet, among which 13 Cloud OFCs were multistory facilities.
They are “cloud-based” because we take full responsibility for the optimal allocation of our clients’ inventory into different Cloud OFCs and save our clients from the hassle of day-to-day operations, therefore, from our clients’ point of view, these Cloud OFCs are “in the cloud.” As of December 31, 2025, we, through the VIE and the VIE’s subsidiaries, directly operated 57 Cloud OFCs across China with a total area of approximately 5,606,976 square feet, among which 21 Cloud OFCs were multistory facilities.
In addition, as of December 31, 2024, 3 of the regional sorting centers operated by the VIE and the VIE’s subsidiaries with an aggregate gross floor area of approximate 64,838.16 square feet are on the land we own, and 23 of the regional sorting centers operated by the VIE and the VIE’s subsidiaries with an aggregate gross floor area of approximately 1,097,544.06 square feet are on leased land.
In addition, as of December 31, 2025, 3 of the regional sorting centers operated by the VIE and the VIE’s subsidiaries with an aggregate gross floor area of approximate 64,838 square feet are on the land we own, and 23 of the regional sorting centers operated by the VIE and the VIE’s subsidiaries with an aggregate gross floor area of approximately 1,124,333 square feet are on leased land.
The provisions state, in broad terms, that violators may face warnings, fines, public exposure and, criminal liability whereas the case constitutes a crime. The Cybersecurity Law of the PRC, as adopted by the National People’s Congress on November 7, 2016, has come into force on June 1, 2017.
The provisions state, in broad terms, that violators may face warnings, fines, public exposure and, criminal liability whereas the case constitutes a crime. 87 The Cybersecurity Law of the PRC, as adopted by the National People’s Congress on November 7, 2016 and amended on October 28, 2025, has come into force on January 1, 2026.
We had an annual net profit growth of approximately 17.8% in 2022, approximately 31.7% in 2023 and approximately 5.0% in 2024.
We had an annual net profit growth of approximately 31.7% in 2023, approximately 5.0% in 2024, and approximately 12.8% in 2025.
We determine our pricing based on various factors, including, but not limited to, operating costs, general market conditions, competitions, and service quality. Our service pricing may also be influenced by market conditions and competitions. From time to time, we may evaluate and adjust our service pricing based on, among other factors, market conditions and operating costs.
We determine our pricing based on various factors, including, but not limited to, operating costs, general market conditions, competitions, and service quality. Our service pricing may also be influenced by market conditions and competitions.
Our net profit amounted to approximately $10.8 million $10.3 million and $7.8 million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively; our net profit margins for the fiscal years ended December 31, 2024, 2023 and 2022 were approximately 2.1%, 2.6% and 2.1%, respectively.
Our net profit amounted to approximately $12.2 million, $10.8 million and $10.3 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively; our net profit margins for the fiscal years ended December 31, 2025, 2024 and 2023were approximately 2.1%, 2.1% and 2.6%, respectively.
Our total net revenue increased by approximately 24.8% during 2024 compared to 2023. We generated operating profit of approximately $14.7 million and $13.9 million for the fiscal years ended December 31, 2024 and 2023, respectively. Our operating profit margin was approximately 2.9% and 3.4% for the fiscal years ended December 31, 2024 and 2023, respectively.
Our total net revenue increased by approximately 13.6% during 2025 compared to 2024. We generated operating profit of approximately $16.9 million and $14.7 million for the fiscal years ended December 31, 2025 and 2024, respectively. Our operating profit margin was approximately 2.9% and 2.9% for the fiscal years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024, we, through the VIE and the VIE’s subsidiaries, have achieved strong operational efficiency through centralized control and management of 26 regional sorting centers, 39 Cloud OFCs, 24 service outlets, approximately 410 self-owned trucks and vehicles, and over 110,000 transportation providers, route planning and optimization, and transportation and management system.
As of December 31, 2025, we, through the VIE and the VIE’s subsidiaries, have achieved strong operational efficiency through centralized control and management of 26 regional sorting centers, 57 Cloud OFCs, 14 service outlets, approximately 420 self-owned trucks and vehicles, and over 122,000 transportation providers, route planning and optimization, and transportation and management system.
Through years of effort, as of December 31, 2024, we have registered 117 computer software copyrights with the PRC National Copyright Administration and 2 invention patent with the National Intellectual Property Administration.
Through years of effort, as of December 31, 2025, we have registered 122 computer software copyrights with the PRC National Copyright Administration and 3 invention patent with the National Intellectual Property Administration.
As of the date of this annual report, we have not identified any specific strategic alliances or acquisition opportunities. Our Service Offerings Through our integrated network model, we, through the VIE and the VIE’s subsidiaries, provide B2B freight transportation services and cloud storage services to our clients.
We may also selectively pursue acquisitions that will complement our business and operations. As of the date of this annual report, we have not identified any specific strategic alliances or acquisition opportunities. Our Service Offerings Through our integrated network model, we, through the VIE and the VIE’s subsidiaries, provide B2B freight transportation services and cloud storage services to our clients.
Our Mission The VIE is one of the leading contract logistics service providers in China. Since the establishment of the VIE in 2001, our mission has been to provide logistics solutions to companies in need of storage and delivery assistance in China.
Since the establishment of the VIE in 2001, our mission has been to provide logistics solutions to companies in need of storage and delivery assistance in China.
Regulations Relating to Foreign Investment The PRC Foreign Investment Law The Foreign Investment Law, promulgated by the National People’s Congress on March 15, 2019, has come into effect on January 1, 2020 and has replaced the major existing laws and regulations governing foreign investment in the PRC, including the Sino-foreign Equity Joint Ventures Enterprises Law, the Sino-foreign Co-operative Enterprises Law, the Wholly Foreign-invested Enterprise Law, and their implementation rules and ancillary regulations.
PRC Regulations This section sets forth a summary of the principal laws and regulations relevant to our business and operations in the PRC. 83 Regulations Relating to Foreign Investment The PRC Foreign Investment Law The Foreign Investment Law, promulgated by the National People’s Congress on March 15, 2019, has come into effect on January 1, 2020 and has replaced the major existing laws and regulations governing foreign investment in the PRC, including the Sino-foreign Equity Joint Ventures Enterprises Law, the Sino-foreign Co-operative Enterprises Law, the Wholly Foreign-invested Enterprise Law, and their implementation rules and ancillary regulations.
Regulations relating to Leasing Pursuant to the Law on Administration of Urban Real Estate of the PRC promulgated by the SCNPC on July 5, 1994, amended on August 30, 2007, August 27, 2009, August 26, 2019 and took effect on January 1, 2020, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing provisions such as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties.
We are subject to the Pricing Law as a service provider and believe that our pricing activities are currently in compliance with the law in all material aspects. 86 Regulations Relating to Leasing Pursuant to the Law on Administration of Urban Real Estate of the PRC promulgated by the SCNPC on July 5, 1994, amended on August 30, 2007, August 27, 2009, August 26, 2019 and took effect on January 1, 2020, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing provisions such as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties.
We dispatch freight to the regional sorting center closest to its destination even if the regional sorting center and the destination are located in different administrative regions. This reduces transportation time and lowers our and our clients’ transportation costs.
When planning routes, we prioritize the efficiency of the entire network. We dispatch freight to the regional sorting center closest to its destination even if the regional sorting center and the destination are located in different administrative regions. This reduces transportation time and lowers our and our clients’ transportation costs.
Some of our leases have not completed the registration. 88 According to the Civil Code of the PRC, the lessee may sublease the leased and occupies premises to a third party, subject to the consent of the lessor. Where the lessee subleases the premises, the lease contract between the lessee and the lessor remains valid.
According to the Civil Code of the PRC, the lessee may sublease the leased and occupies premises to a third party, subject to the consent of the lessor. Where the lessee subleases the premises, the lease contract between the lessee and the lessor remains valid.
Pursuant to the Administrative Regulations on the Housing Provident Fund, which became effective on April 3, 1999 and was amended on March 24, 2002 and March 24, 2019, enterprises are required to register with the competent administrative centers of housing provident fund and open bank accounts for housing provident funds for their employees.
We are in compliance with laws and regulations related to social insurance and housing funds in China in material aspects. 93 Pursuant to the Administrative Regulations on the Housing Provident Fund, which became effective on April 3, 1999 and was amended on March 24, 2002 and March 24, 2019, enterprises are required to register with the competent administrative centers of housing provident fund and open bank accounts for housing provident funds for their employees.
Interdepartmental Management Meeting – In order to connect all departments, from headquarters to our 35 operating branches, we hold monthly business meetings during which we summarize our monthly operations, provide feedbacks to market changes, track business progress, boost employee morals, and ensure meeting objectives. 63 Scalable Integrated Network Model We believe our scalable integrated network model is best suited to support our growth.
Interdepartmental Management Meeting – In order to connect all departments, from headquarters to our 35 operating branches, we hold monthly business meetings during which we summarize our monthly operations, provide feedbacks to market changes, track business progress, boost employee morals, and ensure meeting objectives.
The SAFE Circular No. 59 also simplified the capital verification and confirmation formalities for foreign invested entities, the foreign capital and foreign exchange registration formalities required for the foreign investors to acquire equities from Chinese parties, and further improved the administration on exchange settlement of foreign exchange capital of foreign invested entities. 98 SAFE Circular 37 In July 2014, SAFE promulgated SAFE Circular 37, which replaces the previous SAFE Circular 75.
The SAFE Circular No. 59 also simplified the capital verification and confirmation formalities for foreign invested entities, the foreign capital and foreign exchange registration formalities required for the foreign investors to acquire equities from Chinese parties, and further improved the administration on exchange settlement of foreign exchange capital of foreign invested entities.
Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in April 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (1) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of relevant national provisions; (2) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (3) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (4) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations.
Specifically, (1) the users’ personal information shall not be collected without prior consent; (2) the personal information shall not be collected or used other than those necessary for internet service providers to provide services; (3) the personal information shall be kept strictly confidential; and (4) a series of detailed measures shall be taken to prevent any divulge, damage, tamper or loss of personal information of users. 89 Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in April 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (1) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of relevant national provisions; (2) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (3) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (4) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations.
For the fiscal years ended December 31, 2024, 2023, and 2022, we, through the VIE and the VIE’s subsidiaries, provided freight transportation services for 1,923, 2,160 and 2,291 clients, respectively, in the industries of, among others, manufacturing, energy, new energy (vehicle), telecommunications, internet, fashion, fast moving consumer goods, publishing, agriculture and e-commerce. 67 Shipment Flow The following diagram illustrates the process for the completion of a typical freight transportation order.
For the fiscal years ended December 31, 2025, 2024 and 2023, we, through the VIE and the VIE’s subsidiaries, provided freight transportation services for 1,871, 1,923 and 2,160 clients, respectively, in the industries of, among others, manufacturing, energy, new energy (vehicle), telecommunications, internet, fashion, fast moving consumer goods, publishing, agriculture and e-commerce.
The infringed party may claim damages from the manufacturer of the product or the seller of the product. If the product defect is caused by the producer, the seller shall have the right to recover the damages from the producer after compensation, and vice versa.
If the product defect is caused by the producer, the seller shall have the right to recover the damages from the producer after compensation, and vice versa.
On March 20, 2019, MOF, SAT and the General Administration of Customs jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019, and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purposes of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%.
The Notice on Comprehensively promoting the Pilot Plan of the Conversion of Business Tax to Value-Added Tax, which was promulgated on March 23, 2016, became effective on May 1, 2016 and was amended on July 11, 2017, sets out that VAT in lieu of business tax be collected in all regions and industries. 95 On March 20, 2019, MOF, SAT and the General Administration of Customs jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019, and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purposes of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%.
Trademark As of the date of this annual report, we had registered, through the VIE and the VIE’s subsidiaries, 38 trademarks, including 35 trademarks with the Trademark Office of the State Administration for Industry and Commerce in China, such as our Company’s Chinese name, “Shengfeng (盛丰),” 1 trademark with the Economic Affairs Bureau of Macao Special Administrative Region, 1 trademark with Trade Marks Registry Intellectual Property Department of the Government of the Hong Kong Special Administrative Region and 1 trademark with the Intellectual Property Office of Taiwan.
Trademark As of the date of this annual report, we had registered, through the VIE and the VIE’s subsidiaries, 37 trademarks, including 34 trademarks with the Trademark Office of the State Administration for Industry and Commerce in China, such as our Company’s Chinese name, “Shengfeng (盛丰),” 1 trademark with the Economic Affairs Bureau of Macao Special Administrative Region, 1 trademark with Trade Marks Registry Intellectual Property Department of the Government of the Hong Kong Special Administrative Region and 1 trademark with the Intellectual Property Office of Taiwan. 78 Copyright As of the date of this annual report, we had registered, through the VIE and the VIE’s subsidiaries, 122 computer software copyrights, including those that relate to Shengfeng TMS, with the PRC National Copyright Administration.
Pursuant to the PRC Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information shall follow the principles of legitimacy, properness and necessity. 91 On March 12, 2021, the CAC, MIIT, the Ministry of Public Security and the SAMR, announced the Provisions on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which provide that the operators of mobile internet applications shall not deny the users who do not consent to the collection of unnecessary information from using basic functional services of such applications.
On March 12, 2021, the CAC, MIIT, the Ministry of Public Security and the SAMR, announced the Provisions on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which provide that the operators of mobile internet applications shall not deny the users who do not consent to the collection of unnecessary information from using basic functional services of such applications.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Our major customers are in the manufacturing industry, the fast-moving consumer goods industry, the new energy (vehicle) industry, the telecommunication industry, and the publishing industry. Revenue from transportation services is recognized upon customers’ receipt of the transported goods.
Our major customers are in the manufacturing industry, the fast-moving consumer goods industry, the new energy (vehicle) industry, the telecommunication industry, and the publishing industry. Revenue from transportation services is recognized upon customers’ receipt of the transported goods.
Cost of revenues Our cost of revenue consists of cost of transportation services and cost of warehouse storage management services. The cost of transportation services comprises cooperation cost (the payments made to third-party transportation providers), depreciation and amortization expenses, toll fees, employee wages and benefits and fuel cost.
Cost of revenues Our cost of revenue consists of cost of transportation services and cost of warehouse storage management services. The cost of transportation services comprises cooperation cost (the payments made to third-party transportation providers), depreciation and amortization expenses, toll fees, employee wages and benefits and fuel cost.
Cooperation cost is the direct cost of transportation paid by the Company to third-party transportation providers, who are independent contractors and third-party carriers. The cost of warehouse storage management services consists of rental fees, handling fees, employee wages and benefits in connection with our services to our clients.
Cooperation cost is the direct cost of transportation paid by the Company to third-party transportation providers, who are independent contractors and third-party carriers. The cost of warehouse storage management services consists of rental fees, handling fees, employee wages and benefits in connection with our services to our clients.
For the years ended December 31, 2024 and 2023 Years Ended December 31, 2024 2023 Change Amount in thousand % Amount in thousand % (Amount in thousand) % Revenue Transportation $ 484,754 96.1 % $ 383,211 94.8 % $ 101,543 26.5 % Warehouse storage management services 16,432 3.3 % 18,160 4.5 % (1,728 ) (9.5 )% Other revenue 2,972 0.6 % 2,750 0.7 % 222 8.1 % Net revenue 504,158 100 % 404,121 100 % 100,037 24.8 % Cost of revenue (457,874 ) (90.8 )% (357,615 ) (88.5 )% (100,259 ) 28.0 % Gross profit $ 46,284 9.2 % $ 46,506 11.5 % $ (222 ) (0.5 )% 103 Net revenues Transportation services We, primarily through the VIE and the VIE’s subsidiaries, provide transportation services to companies in mainland China.
For the years ended December 31, 2024 and 2023 Years Ended December 31, 2024 2023 Change Amount in thousand % Amount in thousand % (Amount in thousand) % Revenue Transportation $ 484,754 96.1 % $ 383,211 94.8 % $ 101,543 26.5 % Warehouse storage management services 16,432 3.3 % 18,160 4.5 % (1,728 ) (9.5 )% Other revenue 2,972 0.6 % 2,750 0.7 % 222 8.1 % Net revenue 504,158 100 % 404,121 100 % 100,037 24.8 % Cost of revenue (457,874 ) (90.8 )% (357,615 ) (88.5 )% (100,259 ) 28.0 % Gross profit $ 46,284 9.2 % $ 46,506 11.5 % $ (222 ) (0.5 )% Net revenues Transportation services We, primarily through the VIE and the VIE’s subsidiaries, provide transportation services to companies in mainland China.
Cash flows in Investing Activities For the year ended December 31, 2024, net cash used in investing activities was approximately $32.6 million, consisting primarily of approximately $29.5 million cash used to acquire property and equipment, approximately $9.1 million cash used for purchasing intangible assets, approximately $9.1 million cash paid for investments deposit and approximately $5.8 million loan to a third party, partially offset by cash proceeds received from disposal of subsidiaries of approximately $9.7 million and investment deposit refund of approximately $6.8 million, loan repayment from a third party of approximately $2.8 million and cash received from disposal property and equipment of approximately $1.3 million.
For the year ended December 31, 2024, net cash used in investing activities was approximately $32.6 million, consisting primarily of approximately $29.5 million cash used to acquire property and equipment, approximately $9.1 million cash used for purchasing intangible assets, approximately $9.1 million cash paid for investments deposit and approximately $5.8 million loan to a third party, partially offset by cash proceeds received from disposal of subsidiaries of approximately $9.7 million and investment deposit refund of approximately $6.8 million, loan repayment from a third party of approximately $2.8 million and cash received from disposal property and equipment of approximately $1.3 million.
We primarily charge our customers service fees for our storage services and the daily management services. Revenue from the warehouse storage management services is recognized over the service period. Our net revenues increased by approximately 24.8% from approximately $404.1 million for the year ended December 31, 2023 to approximately $504.2 million for the year ended December 31, 2024.
We primarily charge our customers service fees for our storage services and the daily management services. Revenue from the warehouse storage management services is recognized over the service period. 105 Our net revenues increased by approximately 24.8% from approximately $404.1 million for the year ended December 31, 2023 to approximately $504.2 million for the year ended December 31, 2024.
Unfavorable changes in any of these general factors could materially and adversely affect our business and our results of operations. Key Factors Affecting Our Results of Operations Our ability to expand our customer base We will continue to seek to expand our customer base to achieve sustainable growth. We aim to attract new customers and maintain our existing customers.
Unfavorable changes in any of these general factors could materially and adversely affect our business and our results of operations. 101 Key Factors Affecting Our Results of Operations Our ability to expand our customer base We will continue to seek to expand our customer base to achieve sustainable growth. We aim to attract new customers and maintain our existing customers.
Critical Accounting Estimates . We prepare our financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements.
E. Critical Accounting Estimates . We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements.
For a description of the VIE Agreements, see “Item 3. Key Information — Our VIE Agreements.” The VIE is a contract logistics service provider in China. Contract logistics is a comprehensive process that merges traditional logistics with supply chain management.
For a description of the VIE Agreements, see “Item 3. Key Information — Our VIE Agreements.” 100 The VIE is a contract logistics service provider in China. Contract logistics is a comprehensive process that merges traditional logistics with supply chain management.
Warehouse storage management services We, primarily through the VIE and the VIE’s subsidiaries, generate revenue of warehouse storage management services through the provision of warehouse storage management services to various customers. We help companies place the goods and maintain the daily input and output of the goods.
Warehouse storage management services We, primarily through the VIE and the VIE’s subsidiaries, generate revenue of warehouse storage management services through the provision of integrated warehouse storage management services to various customers. We help companies place the goods and maintain the daily input and output of the goods.
Warehouse storage management services We, primarily through the VIE and the VIE’s subsidiaries, generate revenue of warehouse storage management services through the provision of warehouse storage management services to various customers. We help companies place the goods and maintain the daily input and output of the goods.
Warehouse storage management services We, primarily through the VIE and the VIE’s subsidiaries, generate revenue of warehouse storage management services through the provision of integrated warehouse storage management services to various customers. We help companies place the goods and maintain the daily input and output of the goods.
Other than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results or financial condition. 112 E.
Other than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results or financial condition.
Since 2001, we, through the VIE and the VIE’s subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities in over 32 provinces as of December 31, 2024.
Since 2001, we, through the VIE and the VIE’s subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities in over 32 provinces as of December 31, 2025.
In addition, our PRC subsidiary is required to set aside at least 10% of its respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. We had various outstanding bank loans of approximately $55.8 million as of December 31, 2024.
In addition, our PRC subsidiary is required to set aside at least 10% of its respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. We had various outstanding bank loans of approximately $81.3 million as of December 31, 2025.
Net income As a result of the foregoing, our net income increased by 31.7% from approximately $7.8 million for the year ended December 31, 2022 to approximately $10.3 million for the year ended December 31, 2023. Impact of Foreign Currency Fluctuations The reporting currency of the Company is USD.
Net income As a result of the foregoing, our net income increased by 5.0% from approximately $10.3 million for the year ended December 31, 2023 to approximately $10.8 million for the year ended December 31, 2024. Impact of Foreign Currency Fluctuations The reporting currency of the Company is USD.
We recorded net income of approximately $10.8 million and $10.3 million for the years ended December 31, 2024 and 2023, respectively. For the fiscal years ended December 31, 2023 and 2022, our net revenue, mainly generated from providing transportation and warehouse storage management services, was approximately $404.1 million and $370.3 million, respectively.
We recorded net income of approximately $12.2 million and $10.8 million for the years ended December 31, 2025 and 2024, respectively. For the fiscal years ended December 31, 2024 and 2023, our net revenue, mainly generated from providing transportation and warehouse storage management services, was approximately $504.2 million and $404.1 million, respectively.
Dollar Exchange Rate December 31, 2024 December 31, 2023 December 31, 2022 At the end of the period - USD: RMB US$1=RMB7.1884 US$1=RMB7.0827 US$1=RMB6.9646 Average rate for the period - USD: RMB US$1=RMB7.1217 US$1=RMB7.0467 US$1=RMB6.7261 We did not have any foreign currency investments hedged by currency borrowings or other hedging instruments in years ended December 31, 2024, 2023 and 2022. 109 B.
Dollar Exchange Rate December 31, 2025 December 31, 2024 December 31, 2023 At the end of the period - USD: RMB US$1=RMB7.0288 US$1=RMB7.1884 US$1=RMB7.0827 Average rate for the period - USD: RMB US$1=RMB7.1429 US$1=RMB7.1217 US$1=RMB7.0467 We did not have any foreign currency investments hedged by currency borrowings or other hedging instruments in years ended December 31, 2025, 2024 and 2023. 108 B.
We, through the VIE and the VIE’s subsidiaries, have achieved strong operational efficiency through centralized control and management of 26 regional sorting centers, 39 Cloud OFCs, 24 service outlets, approximately 410 self-owned trucks and vehicles, and over 110,000 transportation providers, route planning and optimization, and transportation and managements system.
We, through the VIE and the VIE’s subsidiaries, have achieved strong operational efficiency through centralized control and management of 26 regional sorting centers, 57 Cloud OFCs, 14 service outlets, approximately 420 self-owned trucks and vehicles, and over 122,000 transportation providers, route planning and optimization, and transportation and managements system.
Years Ended December 31, 2024 2023 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Other income (expense) Interest income $ 159 $ 126 $ 33 26.2 % Interest expense (1,972 ) (1,775 ) (197 ) 11.1 % Other (expense) income, net (360 ) 371 (731 ) (197.0 )% Total other expense, net $ (2,173 ) $ (1,278 ) $ (895 ) 70.0 % 105 Our total net other expense increased by approximately 70.0% from approximately $1.3 million for the year ended December 31, 2023 to approximately $2.2 million for the year ended December 31, 2024 for the following reasons.
Years Ended December 31, 2024 2023 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Other income (expense) Interest income $ 159 $ 126 $ 33 26.2 % Interest expense (1,972 ) (1,775 ) (197 ) 11.1 % Other (expense) income, net (360 ) 371 (731 ) (197.0 )% Total other expense, net $ (2,173 ) $ (1,278 ) $ (895 ) 70.0 % Our total net other expense increased by approximately 70.0% from approximately $1.3 million for the year ended December 31, 2023 to approximately $2.2 million for the year ended December 31, 2024 for the following reasons. 107 Other (expense) income, net Our other (expense) income mainly consists of government subsidies, penalties and others.
For the fiscal years ended December 31, 2024 and 2023, our net revenue, mainly generated from providing transportation and warehouse storage management services, was approximately $504.2 million and $404.1 million, respectively. Our total net revenue increased by approximately 24.8% during 2024 compared to 2023, primarily driven by the higher net revenue from transportation services.
For the fiscal years ended December 31, 2025 and 2024, our net revenue, mainly generated from providing transportation and warehouse storage management services, was approximately $572.5 million and $504.2 million, respectively. Our total net revenue increased by approximately 13.6% during 2025 compared to 2024, primarily driven by the higher net revenue from transportation services.
Accordingly, our total revenues had a lower proportional increase than the increase in cost of revenues during the same period, leading to a lower overall gross profit margin. 104 Years Ended December 31, 2024 2023 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Operating expenses Selling and marketing $ (5,964 ) $ (6,688 ) $ 724 (10.8 )% General and administrative (25,654 ) (25,912 ) 258 (1.0 )% Total operating expenses $ (31,618 ) $ (32,600 ) $ 982 (3.0 )% Operating expenses Our operating expenses decreased by approximately 3.0% from approximately $32.6 million for the year ended December 31, 2023 to approximately $31.6 million for the year ended December 31, 2024 for the following reasons: Selling and marketing expenses Our selling and marketing expenses consist primarily of employee wages, rental expenses, benefits for sales and marketing staff, depreciation expenses and other daily expenses which are related to the sales and marketing functions.
Years Ended December 31, 2024 2023 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Operating expenses Selling and marketing $ (5,964 ) $ (6,688 ) $ 724 (10.8 )% General and administrative (25,654 ) (25,912 ) 258 (1.0 )% Total operating expenses $ (31,618 ) $ (32,600 ) $ 982 (3.0 )% 106 Operating expenses Our operating expenses decreased by approximately 3.0% from approximately $32.6 million for the year ended December 31, 2023 to approximately $31.6 million for the year ended December 31, 2024 for the following reasons: Selling and marketing expenses Our selling and marketing expenses consist primarily of employee wages, rental expenses, benefits for sales and marketing staff, depreciation expenses and other daily expenses which are related to the sales and marketing functions.
Net income As a result of the foregoing, our net income increased by 5.0% from approximately $10.3 million for the year ended December 31, 2023 to approximately $10.8 million for the year ended December 31, 2024.
Net income As a result of the foregoing, our net income increased by 12.8% from approximately $10.8 million for the year ended December 31, 2024 to approximately $12.2 million for the year ended December 31, 2025.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this annual report. 101 A. Operating Results .
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this annual report. A. Operating Results . Overview We are a holding company incorporated in the Cayman Islands and are not a Chinese operating company.
Foreign currency capital of a foreign-invested enterprise may be converted into Renminbi capital at its will according to the actual operation of the enterprise, as long as it is within such enterprise’s business scope. 110 Cash flows in Operating Activities For the year ended December 31, 2024, net cash provided by operating activities was approximately $15.0 million, primarily comprised of net income of approximately $10.8 million and adjusted for non-cash items such as depreciation and amortization for property and equipment of approximately $6.4 million, approximately $6.6 million for amortization of operating lease right-of-use assets and interest of operating lease liabilities, decrease of prepayments and other current assets approximately $4.8 million, increase of accounts payable approximately $29.3 million, decrease of other non-current assets of approximately $2.9 million.
Foreign currency capital of a foreign-invested enterprise may be converted into Renminbi capital at its will according to the actual operation of the enterprise, as long as it is within such enterprise’s business scope. 109 Cash flows in Operating Activities For the year ended December 31, 2025, net cash provided by operating activities was approximately $16.1 million, primarily comprised of net income of approximately $12.2 million and adjusted for non-cash items such as depreciation and amortization for property and equipment of approximately $6.4 million, approximately $4.6 million for amortization of operating lease expense, decrease of prepayments and other current assets approximately $3.3 million, increase of salary and welfare payable approximately $2.4 million, increase of accrued expenses and other current liabilities of approximately $2.0 million, increase of tax payables approximately $1.0 million and decrease of other non-current assets approximately $0.9 million.
For the year ended December 31, 2022, net cash provided by operating activities was approximately $6.9 million, primarily comprised of net income of approximately $7.8 million and adjusted for non-cash items such as depreciation and amortization expense for property and equipment of approximately $7.0 million, approximately $10.8 million for amortization of operating lease right-of-use assets and interest of operating lease liabilities, deferred income taxes expenses of approximately $1.2 million, increase of accounts payable of approximately $7.9 million.
For the year ended December 31, 2024, net cash provided by operating activities was approximately $15.0 million, primarily comprised of net income of approximately $10.8 million and adjusted for non-cash items such as depreciation and amortization for property and equipment of approximately $6.4 million, approximately $6.6 million for amortization of operating lease right-of-use assets and interest of operating lease liabilities, decrease of prepayments and other current assets approximately $4.8 million, increase of accounts payable approximately $29.3 million, decrease of other non-current assets of approximately $2.9 million.
Overview We are a holding company incorporated in the Cayman Islands and are not a Chinese operating company. As a holding company with no material operations of our own, our operations have been conducted in China by our subsidiaries and through the VIE Agreements, with the VIE and the VIE’s subsidiaries.
As a holding company with no material operations of our own, our operations have been conducted in China by our subsidiaries and through the VIE Agreements, with the VIE and the VIE’s subsidiaries.
For the year ended December 31, 2023, net cash provided by financing activities was approximately $11.2 million, consisting primarily of cash proceeds from bank loans of approximately $37.9 million, proceeds from the initial public offering of approximately $8.5 million, proceeds from notes payable of approximately $8.5 million and advance from a third party of approximately $7.2 million, partially offset by repayment of bank loans of approximately $48.7 million and repayment of notes payable of approximately $2.0 million.
For the year ended December 31, 2023, net cash provided by financing activities was approximately $11.2 million, consisting primarily of cash proceeds from bank loans of approximately $37.9 million, proceeds from the initial public offering of approximately $8.5 million, proceeds from notes payable of approximately $8.5 million and advance from a third party of approximately $7.2 million, partially offset by repayment of bank loans of approximately $48.7 million and repayment of notes payable of approximately $2.0 million. 110 Capital Expenditures Our capital expenditures are incurred primarily in connection with purchase of fixed assets, including electronic equipment, office equipment and vehicles, and intangible assets.
For the year ended December 31, 2022, net cash used in investing activities was approximately $6.7 million, consisted primarily of approximately $6.9 million cash used to acquire property and equipment and approximately $0.3 million cash used for purchasing intangible assets, offset by cash proceeds received from disposal of property and equipment of approximately $0.5 million. 111 Cash flows in Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was approximately $29.1 million, consisting primarily of cash proceeds from bank loans of approximately $66.8 million, proceeds from notes payable of approximately $34.0 million and cash contribution from non-controlling shareholders of approximately $2.1 million, partially offset by repayment of bank loans of approximately $46.5 million and repayment of notes payable of approximately $27.4 million.
For the year ended December 31, 2024, net cash provided by financing activities was approximately $29.1 million, consisting primarily of cash proceeds from bank loans of approximately $66.8 million, proceeds from notes payable of approximately $34.0 million and cash contribution from non-controlling shareholders of approximately $2.1 million, partially offset by repayment of bank loans of approximately $46.5 million and repayment of notes payable of approximately $27.4 million.
We recorded net income of approximately $10.3 million and $7.8 million for the years ended December 31, 2023 and 2022, respectively. 102 General Factors Affecting Our Results of Operations Our business and operating results are affected by a number of general factors in China’s transportation industry, including, but not limited to: ● China’s overall economic growth, level of urbanization and level of consumption; ● the development of the manufacturing industry, fast moving consumer goods industry, telecommunication industry, and publishing industry; and ● market competition.
General Factors Affecting Our Results of Operations Our business and operating results are affected by a number of general factors in China’s transportation industry, including, but not limited to: ● China’s overall economic growth, level of urbanization and level of consumption; ● the development of the manufacturing industry, fast moving consumer goods industry, telecommunication industry, and publishing industry; and ● market competition.
As of December 31, 2024, we have not recorded any liabilities related to these letters of guarantee, as there are no indications of default. However, these commitments represent potential obligations that could result in liabilities if we fail to fulfill agreement terms.
The Company was required to maintain restricted cash of approximately $2.1 million (RMB15.0 million) for letters of guarantee. As of December 31, 2025, we have not recorded any liabilities related to these letters of guarantee, as there are no indications of default. However, these commitments represent potential obligations that could result in liabilities if we fail to fulfill agreement terms.
We primarily charge our customers service fees for our storage services and the daily management services. Revenue from the warehouse storage management services is recognized over the service period. Our net revenues increased by approximately 9.1% from approximately $370.3 million for the year ended December 31, 2022 to approximately $404.1 million for the year ended December 31, 2023.
We primarily charge our customers service fees for our storage services and the daily management services. Revenue from the warehouse storage management services is recognized over the service period. 102 Our net revenues increased by approximately 13.6% from approximately $504.2 million for the year ended December 31, 2024 to approximately $572.5 million for the year ended December 31, 2025.
For the year ended December 31, 2022, net cash provided by financing activities was approximately $8.2 million, consisted primarily of cash proceeds from bank loans of approximately $61.3 million and cash proceeds from notes payable of approximately $2.1 million, partially offset by repayment of bank loans of approximately $55.5 million.
Cash flows in Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was approximately $18.8 million, consisting primarily of cash proceeds from bank loans of approximately $74.0 million, proceeds from notes payable of approximately $9.1 million, partially offset by repayment of bank loans of approximately $50.2 million and repayment of notes payable of approximately $15.0 million.
Our cost of revenues increased by approximately 8.8%, from approximately $328.8 million for the year ended December 31, 2022 to approximately $357.6 million for the year ended December 31, 2023, which was in line with the increase of revenue.
Our cost of revenues increased by approximately 13.4%, from approximately $457.9 million for the year ended December 31, 2024 to approximately $519.4 million for the year ended December 31, 2025, which was in line with the increase in revenue.
The following table sets forth our contractual obligations as of December 31, 2024: Payments Due by Period (Amount in thousand) Total Within 1 Year 1-3 Years 3-5 Years More than 5 Years Bank loans $ 55,791 $ 39,401 $ 2,458 $ 4,098 $ 9,834 Operating lease commitments 9,863 4,371 3,963 827 702 Total $ 65,654 $ 43,772 $ 6,421 $ 4,925 $ 10,536 Cash flows and working capital The following table sets forth a summary of our cash flows for the periods indicated: December 31, December 31, December 31, 2024 2023 2022 (Amount in thousand) (Amount in thousand) (Amount in thousand) Net cash provided by operating activities $ 15,010 $ 14,135 $ 4,811 Net cash used in investing activities (32,629 ) (18,821 ) (6,715 ) Net cash flows provided by financing activities 29,072 11,169 8,168 Effects of exchange rate changes on cash, cash equivalent and restricted cash (533 ) (558 ) (1,814 ) Cash, cash equivalent and restricted cash, beginning of year 29,293 23,368 18,918 Cash, cash equivalent and restricted cash, end of year $ 40,213 $ 29,293 $ 23,368 As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our PRC subsidiary and the VIE in China.
The following table sets forth our contractual obligations as of December 31, 2025: Payments Due by Period (Amount in thousand) Total Within 1 Year 1-3 Years 3-5 Years More than 5 Years Bank loans $ 81,253 $ 47,421 $ 20,912 $ 4,678 $ 8,242 Operating lease commitments 5,233 2,746 1,838 399 250 Total $ 86,486 $ 50,167 $ 22,750 $ 5,077 $ 8,492 Cash flows and working capital The following table sets forth a summary of our cash flows for the periods indicated: Years Ended December 31, 2025 2024 2023 (Amount in thousand) (Amount in thousand) (Amount in thousand) Net cash provided by operating activities $ 16,099 $ 15,010 $ 14,135 Net cash used in investing activities (37,428 ) (32,629 ) (18,821 ) Net cash flows provided by financing activities 18,817 29,072 11,169 Effects of exchange rate changes on cash, cash equivalent and restricted cash 867 (533 ) (558 ) Cash, cash equivalent and restricted cash, beginning of year 40,213 29,293 23,368 Cash, cash equivalent and restricted cash, end of year $ 38,568 $ 40,213 $ 29,293 As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our PRC subsidiary and the VIE in China.
The increase was primarily driven by a significant increase in revenue from our transportation services. Net revenues generated from our transportation services increased by approximately 10.7% from approximately $346.0 million for the year ended December 31, 2022 to approximately $383.2 million for the year ended December 31, 2023.
The increase was primarily driven by a significant increase in revenue from our transportation services. Net revenues generated from our transportation services increased by approximately 14.4% from approximately $484.8 million for the year ended December 31, 2024 to approximately $554.8 million for the year ended December 31, 2025.
Income from operations As a result of the foregoing, our profit from operations increased by approximately 41.2% from approximately $9.8 million for the year ended December 31, 2022 to approximately $13.9 million for the year ended December 31, 2023.
Income from operations As a result of the foregoing, our profit from operations increased by approximately 15.1% from approximately $14.7 million for the year ended December 31, 2024 to approximately $16.9 million for the year ended December 31, 2025.
General and administrative expenses Our general and administrative expenses consist primarily of employee wages and benefits for corporate employees, rental expenses, depreciation and amortization expense and other expenses which are related to the general corporate functions.
Our selling and marketing expenses kept at approximately $6.0 million for the years ended December 31, 2025 and 2024. 103 General and administrative expenses Our general and administrative expenses consist primarily of employee wages and benefits for corporate employees, rental expenses, depreciation and amortization expense and other expenses which are related to the general corporate functions.
Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. For the year ended December 31, 2024, we identified no critical accounting estimates in the preparation of our financial statements.
See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions.
Gross profit Our overall gross profit increased by approximately 12.0% from approximately $41.5 million for the year ended December 31, 2022 to approximately $46.5 million for the year ended December 31, 2023. For the years ended December 31, 2023 and 2022, our overall gross margin was approximately 11.5% and 11.2%, respectively.
Gross profit Our overall gross profit increased by approximately 14.7% from approximately $46.3 million for the year ended December 31, 2024 to approximately $53.1 million for the year ended December 31, 2025. For the years ended December 31, 2025 and 2024, our overall gross margin was stable and amounted to approximately 9.3% and 9.2%, respectively.
The change was due to loss on disposal of property and equipment as well as decreased one-time compensation income.
Other expense, net was approximately $0.4 million for the year ended December 31, 2024, as compared to other income, net of approximately $0.4 million for the year ended December 31, 2023. The change was due to loss on disposal of property and equipment as well as decreased one-time compensation income.
Other (expense) income, net Our other (expense) income mainly consists of government subsidies, penalties and others. Other expense, net was approximately $0.4 million for the year ended December 31, 2024, as compared to other income, net of approximately $0.4 million for the year ended December 31, 2023.
Interest expense Our interest expense increased by approximately 38.7% from approximately $2.0 million for the year ended December 31, 2024 to approximately $2.7 million for the year ended December 31, 2025, due to increased average bank loan balance during the year ended December 31, 2025. Other expense, net Our other expense, net mainly consists of government subsidies, penalties and others.
Net revenue generated from our warehouse storage management services decreased by approximately 10.6% from approximately $20.3 million for the year ended December 31, 2022 to approximately $18.2 million for the year ended December 31, 2023, primarily due to shutting down redundant warehouses and shift focusing on transportation services for the year ended December 31, 2023.
Net revenue generated from our warehouse storage management services decreased by approximately 13.2% from approximately $16.4 million for the year ended December 31, 2024 to approximately $14.3 million for the year ended December 31, 2025, primarily due to a shifting of focus on transportation services for the year ended December 31, 2025.
Net cash generated from operating activities was partially offset by approximately $11.3 million decrease in operating lease liabilities, approximately $1.0 million decrease in salary and welfare payables, approximately $2.0 million increase in prepayments and other current assets, approximately $17.0 million increase in account receivable and approximately $1.0 million increase in notes receivable.
Net cash generated from operating activities was partially offset by approximately $5.8 million increase in account receivable, approximately $4.5 million decrease in operating lease liabilities, approximately $4.4 million increase in due from related parties, approximately $1.6 million decrease in other non-current liabilities and approximately $1.1 million decrease in accounts payable.
The gross margin decreased mainly due to decreased average selling prices, driven by market competition, for the year ended December 31, 2024.
The gross margin decreased mainly due to decreased average selling prices, driven by market competition, for the year ended December 31, 2024. Accordingly, our total revenues had a lower proportional increase than the increase in cost of revenues during the same period, leading to a lower overall gross profit margin.
Years Ended December 31, 2023 2022 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Income before income taxes $ 12,628 $ 9,425 $ 3,203 34.0 % Provision for income taxes (2,320 ) (1,599 ) (721 ) 45.1 % Net income $ 10,308 $ 7,826 $ 2,482 31.7 % Income before income taxes As a result of the foregoing, our income before income taxes increased by 34.0% from approximately $9.4 million for the year ended December 31, 2022 to approximately $12.6 million for the year ended December 31, 2023.
Years Ended December 31, 2025 2024 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Income before income taxes $ 14,256 $ 12,493 $ 1,763 14.1 % Provision for income taxes (2,047 ) (1,666 ) (381 ) 22.9 % Net income $ 12,209 $ 10,827 $ 1,382 12.8 % 104 Income before income taxes As a result of the foregoing, our income before income taxes increased by 14.1% from approximately $12.5 million for the year ended December 31, 2024 to approximately $14.3 million for the year ended December 31, 2025.
Our general and administrative expenses increased by approximately 6.8% from approximately $24.3 million for the year ended December 31, 2022 to approximately $25.9 million for year ended December 31, 2023, which was attributable to the increase in employee salaries and benefits, due to increased revenue and increased headcount of G&A department to support our expended business.
Our general and administrative expenses increased by approximately 17.8% from approximately $25.7 million for the year ended December 31, 2024 to approximately $30.2 million for the year ended December 31, 2025, which was attributable to increased employee salaries and related benefits.
Accordingly, our total revenues had higher proportional increase than the increase in cost of revenues during the same period, led a higher overall gross profit margin. 107 Years Ended December 31, 2023 2022 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Operating expenses Selling and marketing $ (6,688 ) $ (7,427 ) $ 739 (10.0 )% General and administrative (25,912 ) (24,259 ) (1,653 ) 6.8 % Total operating expenses $ (32,600 ) $ (31,686 ) $ (914 ) 2.9 % Operating expenses Our operating expenses increased by approximately 2.9% from approximately $31.7 million for the year ended December 31, 2022 to approximately $32.6 million for the year ended December 31, 2023 for the following reasons: Selling and marketing expenses Our selling and marketing expenses consist primarily of employee wages, rental expenses, benefits for sales and marketing staff, depreciation expenses and other daily expenses which are related to the sales and marketing functions.
Years Ended December 31, 2025 2024 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Operating expenses Selling and marketing $ (5,999 ) $ (5,964 ) $ (35 ) 0.6 % General and administrative (30,209 ) (25,654 ) (4,555 ) 17.8 % Total operating expenses $ (36,208 ) $ (31,618 ) $ (4,590 ) 14.5 % Operating expenses Our operating expenses increased by approximately 14.5% from approximately $31.6 million for the year ended December 31, 2024 to approximately $36.2 million for the year ended December 31, 2025 for the following reasons: Selling and marketing expenses Our selling and marketing expenses consist primarily of employee wages, rental expenses, benefits for sales and marketing staff, depreciation expenses and other daily expenses which are related to the sales and marketing functions.
Off-Balance Sheet Commitments and Arrangements As of December 31, 2024, the Company had letters of guarantee in aggregate of approximately $6.1 million (RMB43.8 million) issued by several banks to the customers, which terms extend through 2027. The Company was required to maintain restricted cash of approximately $2.1 million (RMB14.9 million) for letters of guarantee.
We intend to fund our future capital expenditures with our existing cash balance, proceeds of bank loans and proceeds from the new equity financing. Off-Balance Sheet Commitments and Arrangements As of December 31, 2025, the Company had letters of guarantee in aggregate of approximately $7.8 million (RMB54.8 million) issued by several banks to the customers, which terms extend through 2028.
Our total net revenue increased by approximately 9.1% during 2023 compared to 2022, primarily driven by the higher net revenue from transportation services.
Our total net revenue increased by approximately 24.8% during 2024 compared to 2023, primarily driven by the higher net revenue from transportation services. We recorded net income of approximately $10.8 million and $10.3 million for the years ended December 31, 2024 and 2023, respectively.
Years Ended December 31, 2023 2022 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Other income (expense) Interest income $ 126 $ 1,274 $ (1,148 ) (90.1 )% Interest expense (1,775 ) (2,227 ) 452 (20.3 )% Other income, net 371 532 (161 ) (30.3 )% Total other expense, net $ (1,278 ) $ (421 ) $ (857 ) 203.6 % 108 Our total net other expense increased by approximately 203.6% from approximately $0.4 million for the year ended December 31, 2022 to approximately $1.3 million for the year ended December 31, 2023 for the following reasons.
Years Ended December 31, 2025 2024 Change (Amount in thousand) (Amount in thousand) (Amount in thousand) % Other income (expense) Interest income $ 255 $ 159 $ 96 60.4 % Interest expense (2,736 ) (1,972 ) (764 ) 38.7 % Other expense, net (143 ) (360 ) 217 (60.3 )% Total other expense, net $ (2,624 ) $ (2,173 ) $ (451 ) 20.8 % Our total net other expense increased by approximately 20.8% from approximately $2.2 million for the year ended December 31, 2024 to approximately $2.6 million for the year ended December 31, 2025 for the following reasons.
Capital Expenditures Our capital expenditures are incurred primarily in connection with purchase of fixed assets, including electronic equipment, office equipment and vehicles, and intangible assets. Our capital expenditures were approximately $38.6 million, $28.7 million and $7.2 million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.
Our capital expenditures were approximately $19.0 million, $38.6 million and $28.7 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively. Subsequent to December 31, 2025 and as of the date of this annual report, we made capital expenditures of approximately $1.2 million.
Provision for income taxes The effective income tax rate increased from approximately 17.0% for the year ended December 31, 2022 to approximately 18.4% for the year ended December 31, 2023, due to the higher profit made in subsidiaries and VIE’s subsidiaries, which didn’t have preferential tax treatment for the year ended December 31, 2023.
Provision for income taxes The effective income tax rate increased from approximately 13.3% for the year ended December 31, 2024 to approximately 14.4% for the year ended December 31, 2025.
For the years ended December 31, 2023 and 2022 Years Ended December 31, 2023 2022 Change Amount in thousand % Amount in thousand % (Amount in thousand) % Revenue Transportation $ 383,211 94.8 % $ 346,039 93.4 % $ 37,172 10.7 % Warehouse storage management services 18,160 4.5 % 20,322 5.5 % (2,162 ) (10.6 )% Other revenue 2,750 0.7 % 3,964 1.1 % (1,214 ) (30.6 )% Net revenue 404,121 100 % 370,325 100 % 33,796 9.1 % Cost of revenue (357,615 ) (88.5 )% (328,793 ) (88.8 )% (28,822 ) 8.8 % Gross profit $ 46,506 11.5 % $ 41,532 11.2 % $ 4,974 12.0 % 106 Net revenues Transportation services We, primarily through the VIE and the VIE’s subsidiaries, provide transportation services to companies in mainland China.
For the years ended December 31, 2025 and 2024 Years Ended December 31, 2025 2024 Change Amount in thousand % Amount in thousand % (Amount in thousand) % Revenue Transportation $ 554,761 96.9 % $ 484,754 96.1 % $ 70,007 14.4 % Warehouse storage management services 14,258 2.5 % 16,432 3.3 % (2,174 ) (13.2 )% Other revenue 3,459 0.6 % 2,972 0.6 % 487 16.4 % Net revenue 572,478 100 % 504,158 100 % 68,320 13.6 % Cost of revenue (519,390 ) (90.7 )% (457,874 ) (90.8 )% (61,516 ) 13.4 % Gross profit $ 53,088 9.3 % $ 46,284 9.2 % $ 6,804 14.7 % Net revenues Transportation services We, primarily through the VIE and the VIE’s subsidiaries, provide transportation services to companies in mainland China.
Interest expense Our interest expense decreased by approximately 20.3% from approximately $2.2 million for the year ended December 31, 2022 to approximately $1.8 million for the year ended December 31, 2023, as a result of a decreased average balance and interest rate of bank loans for the year ended December 31, 2023 compared with the year ended December 31, 2022.
Interest income Our interest income increased by approximately 60.4% from approximately $0.2 million for the year ended December 31, 2024 to approximately $0.3 million for the year ended December 31, 2025, as a result of an increased interest income from loan to Xingqidian Supply Chain Management Co., Ltd, a third party.
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The increase was mainly driven by increasing orders from some new customers, as well as the growth of other existing clients’ businesses.
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The growth was primarily driven by the expansion of services with existing clients, reflecting a deepened partnership and expanded service offerings.
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The gross margin increased mainly due to our cost optimization structure by outsourcing transport service, reducing redundant departments, and incorporating workforce optimization practices for the year ended December 31, 2023.
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Other expense, net was approximately $0.1 million for the year ended December 31, 2025, as compared to approximately $0.4 million for the year ended December 31, 2024. The decrease was due to lower loss on disposal of property and equipment as well as increased one-time compensation income.
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Selling and marketing expenses decreased by approximately 10.0% from approximately $7.4 million for the year ended December 31, 2022 to approximately $6.7 million for the year ended December 31, 2023, which was attributable to decreased related employee wages and benefits due to workforce optimization practices.
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Cash flows in Investing Activities For the year ended December 31, 2025, net cash used in investing activities was approximately $37.4 million, consisting primarily of approximately $19.0 million cash used to acquire property and equipment, approximately $11.4 million loan to third parties, approximately $2.8 million loan to related parties, and approximately $6.2 million cash paid for long-term investments, partially offset by investment deposit refund of approximately $1.6 million.
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Interest income Our interest income decreased by approximately 90.1% from approximately $1.3 million for the year ended December 31, 2022 to approximately $0.1 million for the year ended December 31, 2023, which was driven by a decreased interest income from deposit for investment.
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The critical accounting policies, judgments and estimates that we believe to have the most significant impact on our consolidated financial statements are described below, which should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report.
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Subsequent to December 31, 2024 and as of the date of this annual report, we made capital expenditures of approximately $2.7 million. We intend to fund our future capital expenditures with our existing cash balance, proceeds of bank loans and proceeds from the initial public offering.
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When reviewing our consolidated financial statements, you should consider. ● our selection of critical accounting policies; ● the judgments and other uncertainties affecting the application of such policies; ● the sensitivity of reported results to changes in conditions and assumptions; Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) accounts receivable, net; and (iii) income taxes.
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For the year ended December 31, 2025, we identified no critical accounting estimates in the preparation of our consolidated financial statements. 111

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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A director shall not, as a director, vote in respect of any contract, transaction, arrangement or proposal in which they have an interest which (together with any interest of any person connected with them) is a material interest (otherwise then by virtue of their interests, direct or indirect, in shares or debentures or other securities of, or otherwise in or through, the Company) and if they shall do so their vote shall not be counted, nor in relation thereto shall they be counted in the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below) none of these prohibitions shall apply to: (a) the giving of any security, guarantee or indemnity in respect of: (i) money lent or obligations incurred by them or by any other person for the benefit of the Company or any of its subsidiaries; or (ii) a debt or obligation of the Company or any of its subsidiaries for which the director themself has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security; (b) where the Company or any of its subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the director is to or may participate; (c) any contract, transaction, arrangement or proposal affecting any other body corporate in which he is interested, directly or indirectly and whether as an officer, shareholder, creditor or otherwise howsoever, provided that he (together with persons connected with them) does not to their knowledge hold an interest representing one per cent or more of any class of the equity share capital of such body corporate (or of any third body corporate through which his interest is derived) or of the voting rights available to members of the relevant body corporate; (d) any act or thing done or to be done in respect of any arrangement for the benefit of the employees of the Company or any of its subsidiaries under which they are not accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; (e) any matter connected with the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Companies Act (Revised) of the Cayman Islands) indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against him or them or the doing of any thing to enable such director or directors to avoid incurring such expenditure; or (f) any contract, transaction, arrangement or proposal in which the director has an interest which is not a material interest. 115 Duties of Directors Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties.
A director shall not, as a director, vote in respect of any contract, transaction, arrangement or proposal in which they have an interest which (together with any interest of any person connected with them) is a material interest (otherwise then by virtue of their interests, direct or indirect, in shares or debentures or other securities of, or otherwise in or through, the Company) and if they shall do so their vote shall not be counted, nor in relation thereto shall they be counted in the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below) none of these prohibitions shall apply to: (a) the giving of any security, guarantee or indemnity in respect of: (i) money lent or obligations incurred by them or by any other person for the benefit of the Company or any of its subsidiaries; or (ii) a debt or obligation of the Company or any of its subsidiaries for which the director themself has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security; (b) where the Company or any of its subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the director is to or may participate; (c) any contract, transaction, arrangement or proposal affecting any other body corporate in which he is interested, directly or indirectly and whether as an officer, shareholder, creditor or otherwise howsoever, provided that he (together with persons connected with them) does not to their knowledge hold an interest representing one per cent or more of any class of the equity share capital of such body corporate (or of any third body corporate through which his interest is derived) or of the voting rights available to members of the relevant body corporate; (d) any act or thing done or to be done in respect of any arrangement for the benefit of the employees of the Company or any of its subsidiaries under which they are not accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; (e) any matter connected with the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Companies Act (Revised) of the Cayman Islands) indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against him or them or the doing of anything to enable such director or directors to avoid incurring such expenditure; or (f) any contract, transaction, arrangement or proposal in which the director has an interest which is not a material interest. 113 Duties of Directors Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties.
The compensation committee is responsible for, among other things: ● reviewing and approving the total compensation package for our most senior executive officers; ● approving and overseeing the total compensation package for our executives other than the most senior executive officers; 117 ● reviewing and recommending to the board with respect to the compensation of our directors; ● reviewing periodically and approving any long-term incentive compensation or equity plans; ● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and ● reviewing programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.
The compensation committee is responsible for, among other things: ● reviewing and approving the total compensation package for our most senior executive officers; ● approving and overseeing the total compensation package for our executives other than the most senior executive officers; ● reviewing and recommending to the board with respect to the compensation of our directors; ● reviewing periodically and approving any long-term incentive compensation or equity plans; ● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and ● reviewing programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.
The registered address of Shengfeng International Limited is 30 de Castro Street, Wickhams Cay 1, P.O. Box 4519, Road Town, Tortola, British Virgin Islands. 119 (3) The number of Class A Ordinary Shares beneficially owned represents 8,736,000 Class A Ordinary Shares held by Everbright International Development Limited, a British Virgin Islands company.
The registered address of Shengfeng International Limited is 30 de Castro Street, Wickhams Cay 1, P.O. Box 4519, Road Town, Tortola, British Virgin Islands. (3) The number of Class A Ordinary Shares beneficially owned represents 8,736,000 Class A Ordinary Shares held by Everbright International Development Limited, a British Virgin Islands company.
Ye has been chosen as a director appointee because of her extensive financial knowledge and extensive work experience in the investment and financing field. Family Relationships None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. Controlled Company Mr.
Ye has been chosen as a director appointee because of her extensive financial knowledge and extensive work experience in the investment and financing field. 112 Family Relationships None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. Controlled Company Mr.
The registered address of Changle International Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (6) The number of Class A Ordinary Shares beneficially owned represents 3,784,000 Class A Ordinary Shares held by Yuansheng International Limited, a British Virgin Islands company, which is 100% owned by Yusheng Yang.
The registered address of Changle International Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (5) The number of Class A Ordinary Shares beneficially owned represents 3,784,000 Class A Ordinary Shares held by Yuansheng International Limited, a British Virgin Islands company, which is 100% owned by Yusheng Yang.
The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy; ● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy; ● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 115 Code of Business Conduct and Ethics Our board of directors has adopted a code of business conduct and ethics applicable to all of our directors, officers, and employees.
Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A Ordinary Shares or and Class B Ordinary Shares shown as beneficially owned by them.
Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A Ordinary Shares or and Class B Ordinary Shares shown as beneficially owned by them.
The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A Ordinary Shares and Class B Ordinary Shares as of the date of this annual report for: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our Class A Ordinary Shares or Class B Ordinary Shares. 118 Beneficial ownership includes voting or investment power with respect to the securities.
The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A Ordinary Shares and Class B Ordinary Shares as of the date of this annual report for: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our Class A Ordinary Shares or Class B Ordinary Shares.
The registered address of Mid-Castle Development Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (8) The number of Class A Ordinary Shares beneficially owned represents 2,880,000 Class A Ordinary Shares held by Sky Top Capital International Limited, a British Virgin Islands company, which is 100% owned by Qiang Lin.
The registered address of Yuansheng International Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (6) The number of Class A Ordinary Shares beneficially owned represents 2,880,000 Class A Ordinary Shares held by Sky Top Capital International Limited, a British Virgin Islands company, which is 100% owned by Qiang Lin.
Class A Ordinary Shares Beneficially Owned Class B Ordinary Shares Beneficially Owned Voting Power* Number % Number % % Directors, Director Appointees, and Executive Officers (1) : Yongxu Liu (2) 500,000 1.23 % 41,880,000 100 % 91.27 % Guoping Zheng — — — — — Zhiping Yang — — — — — Dan Liu — — — — — Wen Li — — — — — Qingyan Ye — — — — — All directors, director appointees, and executive officers as a group (6 individuals): 500,000 1.23 % 41,880,000 100 % 91.27 % 5% Shareholders: Shengfeng International Limited (2) — — % 41,880,000 100 % 91.16 % Everbright International Development Limited (3) 8,736,000 21.51 % — — 1.90 % Double Sun Capital Limited (4) 2,332,011 5.74 % — — 0.51 % Changle International Limited (5) 3,904,000 9.61 % — — 0.85 % Chia-Yu Chen 3,519,251 8.66 % — — 0.77 % Yuansheng International Limited (6) 3,784,000 9.32 % — — 0.82 % Mid-Castle Development Limited (7) 3,412,636 8.40 % — — 0.74 % Sky Top Capital International Limited (8) 2,880,000 7.09 % — — 0.63 % * Represents the voting power with respect to all of our Class A Ordinary Shares and Class B Ordinary Shares, voting as a single class.
Class A Ordinary Shares Beneficially Owned Class B Ordinary Shares Beneficially Owned Voting Power* Number % Number % % Directors, Director Appointees, and Executive Officers (1) : Yongxu Liu (2) 500,000 1.23 % 41,880,000 100 % 91.27 % Guoping Zheng - - - - - Jin Wang - - - - - Wen Li - - - - - Qingyan Ye - - - - - All directors, director appointees, and executive officers as a group (5 individuals): 500,000 1.23 % 41,880,000 100 % 91.27 % 5% Shareholders: Shengfeng International Limited (2) - - % 41,880,000 100 % 91.16 % Everbright International Development Limited (3) 8,736,000 21.51 % - - 1.90 % Changle International Limited (4) 3,904,000 9.61 % - - 0.85 % Yuansheng International Limited (5) 3,784,000 9.32 % - - 0.82 % Chia-Yu Chen 3,519,251 8.66 % - - 0.77 % Sky Top Capital International Limited (6) 2,880,000 7.09 % - - 0.63 % Double Sun Capital Limited (7) 2,846,011 7.01 % - - 0.62 % * Represents the voting power with respect to all of our Class A Ordinary Shares and Class B Ordinary Shares, voting as a single class.
(1) Unless otherwise indicated, the business address of each of the individuals is Shengfeng Building, No. 478 Fuxin East Road, Jin’an District, Fuzhou City, Fujian Province, People’s Republic of China, 350001 (2) The number of Class B Ordinary Shares beneficially owned represents 41,880,000 Class B Ordinary Shares held by Shengfeng International Limited, a British Virgin Islands company, which is 100% owned by Yongxu Liu, our CEO, Chairman and President.
Each holder of Class A Ordinary Shares is entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares is entitled to ten votes per one Class B Ordinary Share. 116 (1) Unless otherwise indicated, the business address of each of the individuals is Shengfeng Building, No. 478 Fuxin East Road, Jin’an District, Fuzhou City, Fujian Province, People’s Republic of China, 350001 (2) The number of Class B Ordinary Shares beneficially owned represents 41,880,000 Class B Ordinary Shares held by Shengfeng International Limited, a British Virgin Islands company, which is 100% owned by Yongxu Liu, our CEO, Chairman and President.
The registered address of Double Sun Capital Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (5) The number of Class A Ordinary Shares beneficially owned represents 3,904,000 Class A Ordinary Shares held by Changle International Limited, a British Virgin Islands company, which is 100% owned by Rong Zheng.
The registered address of Everbright International Development Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (4) The number of Class A Ordinary Shares beneficially owned represents 3,904,000 Class A Ordinary Shares held by Changle International Limited, a British Virgin Islands company, which is 100% owned by Rong Zheng.
The registered address of Everbright International Development Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (4) The number of Class A Ordinary Shares beneficially owned represents 2,332,011 Class A Ordinary Shares held by Double Sun Capital Limited, a British Virgin Islands company, which is 100% owned by Yiping Wu.
The registered address of Sky Top Capital International Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (7) The number of Class A Ordinary Shares beneficially owned represents 2,846,011 Class A Ordinary Shares held by Double Sun Capital Limited, a British Virgin Islands company, which is 100% owned by Yiping Wu.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of our three independent director appointees, Dan Liu, Wen Li, and Qingyan Ye. Qingyan Ye is the chairperson of our nominating and corporate governance committee.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of our three independent director appointees, Jin Wang, Wen Li, and Qingyan Ye. Qingyan Ye is the chairperson of our nominating and corporate governance committee.
Compensation Committee . Our compensation committee consists of our three independent director appointees, Dan Liu, Wen Li, and Qingyan Ye. Dan Liu is the chairperson of our compensation committee.
Compensation Committee . Our compensation committee consists of our three independent director appointees, Jin Wang, Wen Li, and Qingyan Ye. Jin Wang is the chairperson of our compensation committee.
The registered address of Sky Top Capital International Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.
The registered address of Double Sun Capital Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.
As of the date of this annual report, approximately 42.94% of our issued and outstanding Class A Ordinary Shares are held in the United States by one record holder (CEDE & CO), representing 3.80% of the aggregated voting power.
As of the date of this annual report, approximately 45.58% of our issued and outstanding Class A Ordinary Shares are held in the United States by one record holder (CEDE & CO), representing 4.03% of the aggregated voting power.
Name Age Position(s) Yongxu Liu 54 Chief Executive Officer, Director, President and Chairman Guoping Zheng 39 Chief Financial Officer and Vice President Zhiping Yang 43 Director Dan Liu 58 Independent Director Wen Li 58 Independent Director Qingyan Ye 40 Independent Director The following is a brief biography of each of the executive officers and directors listed above: Yongxu Liu has been our chief executive officer, president and chairman since May 20, 2021 and director since July 16, 2020.
Name Age Position(s) Yongxu Liu 55 Chief Executive Officer, Director, President and Chairman Guoping Zheng 40 Chief Financial Officer, Director and Vice President Jin Wang 60 Independent Director Wen Li 59 Independent Director Qingyan Ye 41 Independent Director The following is a brief biography of each of the executive officers and directors listed above: Yongxu Liu has been our chief executive officer, president and chairman since May 20, 2021 and director since July 16, 2020.
Compensation Recovery Policy We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules, and applicable listing standards. D. Employees . See “Item 4. Information on the Company—B. Business Overview—Employees.” E. Share ownership .
We have made our code of business conduct and ethics publicly available on our website. Compensation Recovery Policy We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules, and applicable listing standards. D. Employees . See “Item 4.
Liu received his master’s degree in Executive Master of Business Administration from Tsinghua University in 2016. Guoping Zheng has been our chief financial officer and vice president since May 20, 2021. Mr. Zheng has served as the vice president and chief financial officer of Shengfeng Logistics, principal of its Strategy Department and its Finance Department since 2016.
Liu received his master’s degree in Executive Master of Business Administration from Tsinghua University in 2016. Guoping Zheng has been our chief financial officer and vice president since May 20, 2021 and director since June 1, 2025. Mr.
Our audit committee consists of our three independent director appointees, Dan Liu, Wen Li, and Qingyan Ye. Wen Li is the chairperson of our audit committee. We have determined that each of our independent directors also satisfy the “independence” requirements of Rule 5602(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Securities Exchange Act.
We have determined that each of our independent directors also satisfy the “independence” requirements of Rule 5602(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Securities Exchange Act.
Under these agreements, we have agreed to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company. Insider Participation Concerning Executive Compensation Before the establishment of our Compensation Committee, our chief executive officer, president and chairman, Mr.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we have agreed to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company.
Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing rules even if we are a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. 114 Additionally, our biggest shareholder, Shengfeng International Limited, has the ability to control the outcome of matters submitted to the shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.
Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing rules even if we are a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
Each executive officer agrees to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information. 116 We have also entered into indemnification agreements with each of our directors and executive officers.
An executive officer may terminate his or her employment at any time with a one-month prior written notice. Each executive officer agrees to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.
Prior to that, Mr. Zheng served as the senior director of the Financial Management Department of East China and North China in Deppon Logistics Co., Ltd. from 2008 to 2016. Mr. Zheng received his bachelor’s degree in Financial Management from Xiamen University in 2008. Zhiping Yang has been our director since April 7, 2021. Mr.
Zheng has served as the vice president and chief financial officer of Shengfeng Logistics, principal of its Strategy Department and its Finance Department since 2016. Prior to that, Mr. Zheng served as the senior director of the Financial Management Department of East China and North China in Deppon Logistics Co., Ltd. from 2008 to 2016. Mr.
B. Compensation . Yongxu Liu $ 92,393.85 Guoping Zheng $ 85,844.47 Zhiping Yang $ 110,065.90 C. Board practices . Board of Directors Our board of directors consists of five (5) directors. Our board of directors has determined that our three independent director, Dan Liu, Wen Li, and Qingyan Ye, satisfy the “independence” requirements of the Nasdaq corporate governance rules.
Board of Directors Our board of directors consists of five (5) directors. Our board of directors has determined that our three independent director, Jin Wang, Wen Li, and Qingyan Ye, satisfy the “independence” requirements of the Nasdaq corporate governance rules.
Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate governance committee. Our independent directors serve on each of the committees. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee .
Since the establishment of our Compensation Committee, it has been making all determinations regarding executive officer compensation (please see below). 114 Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate governance committee. Our independent directors serve on each of the committees.
Yongxu Liu, made all determinations regarding executive officer compensation from the inception of the Company. Since the establishment of our Compensation Committee, it has been making all determinations regarding executive officer compensation (please see below).
Insider Participation Concerning Executive Compensation Before the establishment of our Compensation Committee, our chief executive officer, president and chairman, Mr. Yongxu Liu, made all determinations regarding executive officer compensation from the inception of the Company.
Liu received her bachelor’s degree in Material Management Engineering from Huazhong University of Science & Technology (formerly named Huazhong Institute of Technology) in 1987, her master’s degree in Business Management from Fuzhou University in 2005 and her Ph.D. in Logistics Management from Fuzhou University in 2012. Wen Li is an independent director. Ms.
Wang received his received his Bachelor’s degree in Mathematics from Yangzhou University in 1986; his Master’s Degree in National Economic Planning and Management from Renmin University of China in 1989, and his Ph.D. in Economics from Emory University, Georgia, USA 1996. Wen Li is an independent director. Ms.
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Yang joined Shengfeng Logistics in 2001. He has served as the vice president of Shengfeng Logistics since 2020 and the general manager of the Operation Center in Shengfeng Logistics since 2014. Mr. Yang has served as the director of Shengfeng Logistics from December 2018 to April 2021.
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Zheng received his bachelor’s degree in Financial Management from Xiamen University in 2008. Jin Wang is an independent director. Jin Wang is a co-founder and Vice Chairman of the New Energy International Investment Alliance since 2018, and in that capacity, he has driven cross-sector collaborations in renewable energy.
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From 2001 to 2013, he served as the General Manager of Beijing Shengfeng Supply Chain Management Co., Ltd., a subsidiary wholly owned by Shengfeng Logistics. Mr. Yang received his bachelor’s degree in Applied Psychology from Xi ‘an Institute of Political Science of the People’s Liberation Army in 2015.
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Since 2015, he has served as President of the Guohe Energy Research Institute, focusing on energy policy and sustainable development. Between 2010 and 2022, he served as director of the NDRC’s International Energy Research Institute, which solidified his expertise in global energy governance. Dr.
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He also completed a Human Resources Advanced Training Class conducted by Tsinghua University in 2014. 113 Dan Liu is an independent director. Ms. Liu has been a professor in the School of Economics and Management of Fuzhou University since 2017. Prior to that, she served as an associate professor in the same school of Fuzhou University from 2006 to 2017.
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Additionally, our biggest shareholder, Shengfeng International Limited, has the ability to control the outcome of matters submitted to the shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. B. Compensation . 2025 Yongxu Liu $ 90,709.34 Guoping Zheng $ 90,586.84 C. Board Practices .
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From 2001 to 2006, Ms. Liu served as an associate professor in Fuzhou Polytechnic. From 2000 to 2001, she was a senior lecturer of the Department of Vocational Education of Fujian Economics and Management Cadre Institute after being a lecturer in the same department from 1994 to 2000.
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We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of our three independent director appointees, Jin Wang, Wen Li, and Qingyan Ye. Wen Li is the chairperson of our audit committee.
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From 1987 to 1994, she served as a teaching assistant under the same department. Ms.
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Information on the Company—B. Business Overview—Employees.” E. Share Ownership .
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An executive officer may terminate his or her employment at any time with a one-month prior written notice.
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Code of Business Conduct and Ethics Our board of directors has adopted a code of business conduct and ethics applicable to all of our directors, officers, and employees. We have made our code of business conduct and ethics publicly available on our website.
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Each holder of Class A Ordinary Shares is entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares is entitled to ten votes per one Class B Ordinary Share.
Removed
The registered address of Yuansheng International Limited is 4th Floor, Water’s Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands. (7) The number of Class A Ordinary Shares beneficially owned represents 3,412,636 Class A Ordinary Shares held by Mid-Castle Development Limited, a British Virgin Islands company, which is 100% owned by Qing Lin.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Key Information—Our VIE Agreements.” 120 Material Transactions with Related Parties The relationship and the nature of related party transactions are summarized as follow: The table below sets forth the major related parties and their relationships with the Company as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022: Name of related parties Relationship with the Company Fujian Bafang Shengfeng Logistics Co., Ltd (“Fujian Bafang”) An equity investee of the Company Fuzhou Tianyu Shengfeng Industrial Co., Ltd (“Fuzhou Tianyu”) A company controlled by Yongxu Liu, CEO and Chairman of the Company Fuzhou Tianyu Shengfeng Property Management Co., Ltd (“Fuzhou Tianyu Management”) A company under the control of a shareholder Fuzhou Tianyu Yuanmei Catering Co., Ltd (“Fuzhou Tianyu Catering”) A company under the control of a shareholder Fujian Desheng Logistics Co., Ltd (“Fujian Desheng”) A company under the control of a shareholder Yongxu Liu The Company’s CEO and Chairman Yongteng Liu CEO’s brother Fujian Yunlian Shengfeng Industry Co., Ltd., (“Fujian Yunlian”) Shengfeng VIE’s shareholder Fuzhou Puhui Technology Co., Ltd Non-controlling shareholder of Ningde Shengfeng Logistics Co.
Key Information—Our VIE Agreements.” 117 Material Transactions with Related Parties The relationship and the nature of related party transactions are summarized as follow: The table below sets forth the major related parties and their relationships with the Company as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023: Name of related parties Relationship with the Company Fujian Bafang Shengfeng Logistics Co., Ltd (“Fujian Bafang”) An equity investee of the Company Fuzhou Tianyu Shengfeng Industrial Co., Ltd (“Fuzhou Tianyu”) A company controlled by Yongxu Liu, CEO and Chairman of the Company Fuzhou Tianyu Shengfeng Property Management Co., Ltd (“Fuzhou Tianyu Management”) A company under the control of a shareholder Fuzhou Tianyu Yuanmei Catering Co., Ltd (“Fuzhou Tianyu Catering”) A company under the control of a shareholder Fujian Desheng Logistics Co., Ltd (“Fujian Desheng”) A company under the control of a shareholder Yongxu Liu The Company’s CEO and Chairman Xiying Yang CEO’s spouse Yongteng Liu CEO’s brother Fujian Yunlian Shengfeng Industry Co., Ltd., (“Fujian Yunlian”) Shengfeng VIE’s shareholder Fuzhou Puhui Technology Co., Ltd Non-controlling shareholder of Ningde Shengfeng Logistics Co.
(“Kunshan Changjiang”) A company under the control of Chongqing Changjiang i) Significant transactions with related parties were as follows: Year ended December 31, 2024 Year ended December 31, 2023 Year ended December 31, 2022 (All amounts in thousands) Transportation services to Fujian Bafang $ - $ - $ 18 Transportation services to Fujian Desheng 157 37 - Transportation services to Zhangwu Changjiang 24 - - Transportation services to Changjiang Modeling 539 - - Transportation services to Kunshan Changjiang 12 - - Total $ 732 $ 37 $ 18 Year ended December 31, 2024 Year ended December 31, 2023 Year ended December 31, 2022 (All amounts in thousands) Transportation services from Fujian Bafang $ 1,799 $ 1,108 $ 1,196 Lease services from Fuzhou Tianyu $ 227 $ 228 $ 305 Lease services from Fuzhou Tianyu Management $ 47 $ 17 $ 35 Catering services from Tianyu Catering $ 1 $ 2 $ - 121 ii) Guarantees The Company’s shareholder, CEO and Chairman, Yongxu Liu, his brother, Yongteng Liu, Fujian Yunlian and Fuzhou Puhui Technology Co., Ltd, were the guarantors of the Company’s short-term bank loans. iii) Significant balances with related parties were as follows: As of December 31, 2024 As of December 31, 2023 Due from related parties (All amounts in thousands) Fuzhou Tianyu $ 41 $ 41 Fujian Desheng 39 40 Zhangwu Changjiang 26 - Changjiang Modeling 582 - Kunshan Changjiang 13 - Total $ 701 $ 81 As of December 31, 2024 As of December 31, 2023 Due to related parties (All amounts in thousands) Fujian Bafang (a) $ 1,662 $ 1,622 Fuzhou Tianyu 18 48 Fuzhou Tianyu Management 7 34 Total $ 1,687 $ 1,704 (a) On December 10, 2007, the Company entered into an interest-free loan agreement with Fujian Bafang for a principal amount of approximately $1.4 million (RMB 9.6 million).
(“Mid-Castle”) The Company’s shareholder i) Significant transactions with related parties were as follows: Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 (All amounts in thousands) Transportation services to Fujian Bafang $ 40 $ - $ - Transportation services to Fujian Desheng 28 157 37 Transportation services to Chongqing Changjiang and its subsidiaries 13,307 575 - Total $ 13,375 $ 732 $ 37 Years ended December 31, 2025 2024 2023 (All amounts in thousands) Transportation services from Fujian Bafang $ 2,796 $ 1,799 $ 1,108 Lease services from Fuzhou Tianyu 274 227 228 Lease services from Fuzhou Tianyu Management 17 47 17 Catering services from Tianyu Catering - 1 2 Total $ 3,087 $ 2,074 $ 1,355 118 ii) Guarantees The Company’s shareholder, CEO and Chairman, Yongxu Liu, CEO’s spouse, Xiying Yang, CEO’s brother, Yongteng Liu, Fujian Yunlian and Fuzhou Puhui Technology Co., Ltd, were the guarantors of the Company’s bank loans. iii) Significant balances with related parties were as follows: As of December 31, 2025 As of December 31, 2024 Due from related parties (All amounts in thousands) Fuzhou Tianyu $ 42 $ 41 Fujian Desheng - 39 Fujian Bafang 31 - Pingtan SF (a) 6,971 Mid-Castle 472 Chongqing Changjiang and its subsidiaries 4,642 621 Total $ 12,158 $ 701 (a) See Note 4 As of December 31, 2025 As of December 31, 2024 Due to related parties (All amounts in thousands) Fujian Bafang (a) $ 1,699 $ 1,662 Fuzhou Tianyu 21 18 Yongteng Liu 110 Fuzhou Tianyu Management - 7 Total $ 1,830 $ 1,687 (a) On December 10, 2007, the Company entered into an interest-free loan agreement with Fujian Bafang for a principal amount of approximately $1.4 million (RMB 9.6 million).
Ltd. Chongqing Changjiang River Moulding Material (Group) Co., Ltd. (“Chongqing Changjiang”) Non-controlling shareholder of Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. Zhangwu Changjiang Materials Technology Co., Ltd.
Ltd. Chongqing Changjiang River Moulding Material (Group) Co., Ltd. (“Chongqing Changjiang”) Non-controlling shareholder of Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. Pingtan Tianyu Shengfeng Technology Co., Ltd. (“Pingtan SF”) An equity method investee of the Company Mid-Castle Development Ltd.
Removed
(“Zhangwu Changjiang”) A company under the control of Chongqing Changjiang Changjiang Modeling Materials (Group) Kezuohou Banner Co., Ltd (“Changjiang Modeling”) A company under the control of Chongqing Changjiang Kunshan Changjiang Modeling Materials Co., Ltd.

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