Roslyn, New York, March 21, 2018 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: SINO) ("Sino-Global", the "Company" or "us"), a non-asset based global shipping and freight logistics integrated solution provider, today announced that its Chief Executive Officer, Mr. Lei Cao, released a Letter to Shareholders highlighting current activities and to outline its corporate strategy for 2018. The letter is included in its entirety below:
To Our Valued Shareholders:
We delivered strong results for the fiscal year 2017. We launched an internet-based logistics platform where shippers can connect with independent trucking organizations. We streamlined our operations and improved cash flow. We strengthened our relationships with COSCO as well as several other leading state-owned China companies and have transitioned from a traditional shipping and freight agent company into an integrated global logistics solutions provider. I thank all of our shareholders for their ongoing support. As your company's CEO, I would like to take this opportunity to recap some of the highlights from the previous fiscal year as well as provide you with an update on a few of our recent developments during the fiscal 2017 year and outline our goals for the remainder of fiscal 2018.
FY 2017 Highlights
Our turnaround efforts first began in fiscal year 2016. Our management team and Board of Directors conducted an in-depth review of Sino-Global's business model amid a changing industry landscape in global logistics. We outlined the Company's core strengths and weaknesses and, with the assistance of an outside consultant and the support of our Board, we developed a three-year strategic plan in an effort to transform the Company and expand our focus to an increasingly global strategy, as opposed to a centralized view solely based on the Chinese markets.
At the end of 2016, we decided on a new business model with a specific focus on producing revenues from our operations in the U.S. The new model will generate profits via an automated yet powerful online-driven portal by connecting short-haul container trucking companies with clients at the demand end. Our initial steps as a part of our new profit generating business model was to capitalize on management's relationships with China Ocean Shipping (Group) Company ("COSCO"), a world leader in shipping and logistics services. We wanted to offer our shipping partners a solution to the "port to door" transportation dilemma that many of them face. In Sino-Global's fiscal year 2017, we developed and launched a fully functional website-based platform where shippers can connect with independent trucking organizations to arrange for goods to be transported from U.S. ports to their final destination.
An ever-present challenge for importers into the United States is an imbalance of goods being transported into the country. Approximately 90% of the containers that COSCO shipped back from the United States are returned empty, with the 10% often filled with waste-based products. However, the Chinese government recently set new environmental regulations that strictly prohibit the import of such products. As a solution, COSCO has adopted a new way to containerize goods that used to be shipped in bulk ("bulk-to-container"). As mentioned in previous releases, containerization offers suppliers a competitive price to transport their goods from the U.S. to China by utilizing the high rate of empty containers along these routes.
Given our long-standing relationship with COSCO, Sino-Global partnered again with the company to cross promote its "bulk-to-container" models on routes from the U.S. to China. Through this partnership, we are able to leverage our newly established on-line portal to strengthen our relationship with a leading shipping conglomerate by providing door-to-door logistics solutions.
The effectiveness and profitability of our newly-established business model is evidenced by the improvement of our financials throughout the trial operations period. By fiscal year end, revenues had increased over 56% as compared to the prior year, profit margins had risen to 56.5% as compared to 48.9% (at fiscal year-end 2016) and Sino-Global had turned an operating loss into an operating profit. Our online logistics platform is off to a great start and we have entered into several agreements to further its growth with COSCO subsidiaries, an in-land transportation company, and with U.S.-based suppliers.
In 2017, we leveraged our relationship with COSCO to assist in the build-up of our internet portal. With the portal, we secured the service volume of the container-trucking online portal on demand. We believe this is a great start, but in order for the portal to remain successful we need to continue to provide a significant stable supply of participants on both sides of the platform.
On March 14, 2018 we completed a $3 million direct offering and sale of our common stock concurrent with the private placement of Series A and B Warrants to certain accredited investors. We intend to use a portion of the capital raised towards the further development of our business in the U.S.
FY 2018 Prospects: Growth Catalysts
Our main objective for the calendar year 2018 is to continuously increase our business in the U.S. and to enhance the core competitiveness of our company in its market sector. To achieve this, we plan to further integrate technology into our business model to yield additional benefits for the Company and our clients. With the aid of specialized technology, we aim to strengthen our profit margins even further and to create efficient profitable opportunities between our logistic service networks in the U.S. and China. Over the long run, we hope to revolutionize and lead the market segment in which we specialize through the precise matching of our clients' needs with service providers.
In light of COSCO container shipping route from the U.S. to China, and the rising demand in China for U.S. based products combined with COSCO's empty container shipments rate along these routes (U.S. to China unutilized shipments currently averages around 80-90%), another key objective for 2018 and into fiscal year 2019 is to assist COSCO in the wide spread adoption of containerization. We intend to do this by continuing to build relationships and to partner with suppliers.
We have signed two agreements with leading suppliers for trial "bulk-to-container" runs, which were successfully completed and have started the new calendar year with a significant purchase order that we expect will generate approximately $10 million in gross revenue for the Company. By leveraging our platform and relationships, we believe we can utilize an online-driven platform to take advantage of this trade imbalance on behalf of Sino-Global's primary customers.
On behalf of our board of directors and management, we thank you for your continued confidence and interest in Sino-Global. We also ask for your support for our transformation effort, allowing us time and a stable environment to reshape our business model and bring profitable returns for you, our shareholders.
Mr. Lei Cao,
Chairman and CEO
For a current review of the Company and a copy of this letter, management invites you to access it the Company's website www.sino-global.com.
About Sino-Global Shipping America, Ltd.
Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged in shipping, chartering, logistics and related business services. Headquartered in New York, Sino-Global has offices in Los Angeles, mainland China, Australia, Canada and Hong Kong. The Company's current service offerings consist of inland transportation management, freight logistics and container trucking services. Additional information about Sino-Global can be found on the Company's corporate website at www.sino-global.com. The Company routinely posts important information on its website.
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Any statements contained in this release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties as identified in Sino-Global's filings with the Securities and Exchange Commission. Actual results, events or performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date hereof. Sino-Global undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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SOURCE Sino-Global Shipping America, Ltd.