SHENZHEN - Jayud Global Logistics Limited (NASDAQ: JYD), a prominent provider of end-to-end supply chain solutions, announced Monday its expansion into the North American logistics market. The Shenzhen-based company's subsidiary, Joyed Logistics Services Inc., has entered into an agreement to acquire a 51% stake in HYTX Warehouse Inc., a logistics firm with 27 locations in the United States and Canada.
The acquisition, which is based on HYTX's average annual net profit up to December 31, 2026, will see part of the payment made in cash and the remainder in Jayud ordinary shares in 2027. This move comes as the e-commerce logistics sector is expected to grow annually by over 10% to approximately $788 billion by 2027, with North America leading the market, according to ECDB.
HYTX Warehouse brings over two decades of logistics technology experience and a comprehensive network of global suppliers, warehouses, and services. Jayud plans to integrate HYTX's customers into its logistics software solutions, which will enhance operational efficiency within U.S. and Chinese customs systems.
This strategic acquisition will enable Jayud to offer one-stop services for various logistics needs, including drop shipping, bulk forwarding, and last-mile delivery arrangements. Xiaogang Geng, Jayud's CEO, expressed confidence that the partnership with HYTX will strengthen their service offerings and position in the global logistics industry.
The company also announced the availability of its annual report on Form 20-F for the fiscal year ended December 31, 2023, which can be accessed through the SEC's website and Jayud's investor relations site. Shareholders may request hard copies of the report from the company's Investor Relations Department.
This expansion into the North American market aligns with the shifting dynamics of global e-commerce logistics, where robust growth is driven by a strong international market and a surge in e-commerce demand. Jayud's acquisition of HYTX is poised to capitalize on these opportunities and enhance its global logistics network.
The information for this article is based on a press release statement.
InvestingPro Insights
Jayud Global Logistics Limited's (NASDAQ: JYD) foray into the North American logistics market comes at a time when the company's financials and stock performance are attracting investor scrutiny. With a market capitalization of just 19.32 million USD, Jayud is a relatively small player in the logistics sector.
Despite the optimistic outlook of the e-commerce logistics sector, Jayud's recent financial data suggests challenges. The company has experienced a revenue decline of 23.64% in the last twelve months as of Q4 2023, indicating potential headwinds in its core business operations.
InvestingPro Tips highlight that Jayud's stock has been subject to significant price volatility and has taken a considerable hit over the last week, with a 15.89% drop in price total return. This could reflect market reactions to their financial performance or broader economic factors affecting the logistics industry. Moreover, Jayud's gross profit margin stands at -3.19%, which suggests that the company is currently suffering from weak gross profit margins.
Investors looking at the long-term potential of Jayud should note that the company is trading at a low revenue valuation multiple and that its short-term obligations exceed its liquid assets. These factors could impact the company's financial flexibility and its ability to invest in growth opportunities like the acquisition of HYTX Warehouse Inc.
For those interested in a deeper analysis, there are 13 additional InvestingPro Tips available for Jayud Global Logistics Limited, which can be accessed at https://www.investing.com/pro/JYD. Readers can also take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, further enriching their investment strategy with valuable insights.
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