Jayud Global Logistics Announces Entry into the North American Market with the Acquisition of HYTX Warehouse Inc.

Rhea-AI Summary

Jayud Global Logistics, listed as NASDAQ: JYD, has entered the North American market by acquiring a 51% controlling stake in HYTX Warehouse Inc. This move aligns with the growing e-commerce logistics sector, expected to reach a value of approximately US$788 billion by 2027, with North America surpassing APAC in revenue generation. The acquisition aims to capitalize on the robust global air cargo demand, driven by a thriving international market and booming e-commerce. The partnership with HYTX enhances Jayud's logistics network and service offerings, positioning the company as a leader in the global logistics industry.

Positive

• Jayud Global Logistics expanding into the North American market through the acquisition of HYTX Warehouse Inc., strengthening its position in the logistics industry.

• Aiming to capitalize on the growing e-commerce logistics sector, with North America leading in revenue generation and an expected 10% annual growth rate in the industry.

• Acquisition of HYTX Warehouse Inc. brings over two decades of logistics experience and comprehensive network of global suppliers, enabling Jayud to offer a wide range of logistics services to its customers.

Negative

• The purchase price for the acquisition will be based on HYTX's annual average net profit from the acquisition closing date to December 31, 2026, which may pose financial risks if the performance does not meet expectations.

• The payment for the acquisition includes a portion in cash and the remainder in ordinary shares of Jayud in 2027, potentially leading to dilution for existing shareholders.

• While the partnership with HYTX presents opportunities, there is a risk of integration challenges and operational adjustments within Jayud's existing logistics network.

Insights

Market Research Analyst

The entry of Jayud Global Logistics into the North American market via the acquisition of HYTX Warehouse Inc. is a strategic maneuver that capitalizes on the uptrend in global e-commerce logistics. The average annual growth rate of over 10% in the sector and the robust growth in global air cargo demand underscore the timeliness and potential benefits of this expansion. By leveraging HYTX's established network and technological expertise in logistics, Jayud is positioning itself to enhance service offerings and operational efficiencies, which are critical for maintaining competitive advantage in the logistics industry. The performance-based payment structure for the acquisition demonstrates a focus on sustained profitability. Investors should monitor how Jayud integrates and scales HYTX's operations, as this will be instrumental in realizing the forecasted growth and market share gains in North America.

Financial Analyst

The acquisition's financial structure, where payment is contingent upon HYTX's net profit until 2026, aligns Jayud's cash outflow with the acquired company's performance, mitigating financial risk. Moreover, the use of ordinary shares of Jayud as part of the payment in 2027 reflects a strategic approach to capital management. For shareholders and potential investors, the implications of this deal on the company's earnings per share and balance sheet liquidity will be areas to watch closely. Additionally, the integration costs and the efficiency of the combined operations will influence Jayud's profitability margins and return on investment in the medium to long term.

Tech Industry Analyst

Jayud's focus on incorporating HYTX's customers into its existing suite of logistics software solutions is noteworthy. This technology integration, especially within U.S. and Chinese customs systems, is an indicator of Jayud's commitment to building a synergistic and technologically advanced global logistics platform. The operational efficiencies gained from these software solutions can lead to cost savings and service improvements, both of which are critical factors for customer retention and competitive differentiation in the logistics sector. The tech integration strategy will impact the company's valuation by enhancing its reputation as an innovative logistics provider and potentially leading to higher multiples in the market.

Further Expansion Addresses Expected Global E-Commerce Logistics Growth of Over 10% Per Year

SHENZHEN, China, April 30, 2024 (GLOBE NEWSWIRE) -- Jayud Global Logistics Limited (NASDAQ: JYD) ("Jayud" or the "Company"), a leading end-to-end supply chain solution provider based in Shenzhen, specializing in cross-border logistics, today announced a significant expansion into the North American logistics market through its wholly owned subsidiary, Joyed Logistics Services Inc. ("Joyed Logistics"). Joyed Logistics has entered into an equity purchase agreement to acquire a 51% controlling stake in HYTX Warehouse Inc. ("HYTX"), a prominent logistics company headquartered in Azusa, California, with 27 locations across the United States and Canada.

Under the terms of the agreement, the equity interests in HYTX will be transferred to Joyed Logistics upon execution, with the purchase price based on HYTX's actual annual average net profit from the acquisition closing date to December 31, 2026, with part of the payment to be made in cash and the remainder in ordinary shares of Jayud in 2027. This performance-based approach is the latest example of Jayud's commitment to investing in successful and synergistic business operations.

According to ECDB, in 2023, North America replaced APAC as the strongest region for eCommerce logistics revenues, with APAC second and Europe third. The market for eCommerce logistics is expected to grow at an average yearly growth rate of over 10% to a value of approximately US$788 billion of revenues generated by 2027.

The acquisition comes at a pivotal time as the global air cargo demand continues to see robust growth, driven by a buoyant international market and booming e-commerce, with demand growing by 11.9% year over year as of February 2024, according to the International Air Transport Association (IATA).

HYTX leadership brings over two decades of experience in logistics technologies, and boasts a comprehensive network of global suppliers, overseas warehouses, and logistics services. Jayud is currently incorporating HYTX's customers into its suite of logistics software solutions, enabling seamless integration within U.S. and Chinese customs systems, providing greater operational efficiencies. HYTX's expertise spans one-piece delivery, goods transfer, returns and label replacement, and last-mile delivery, supported by a professional team and operational process.

This acquisition enables Jayud to offer one-stop services for drop shipping of small pieces, bulk forwarding, traditional goods, FBA goods, secondary sales of returns and label replacement, and last-mile delivery arrangements, catering to the diverse needs of overseas warehouses.

Xiaogang Geng, Chairman of the Board and CEO of Jayud, commented, "The acquisition of HYTX Warehouse is an important milestone for Jayud as we expand our global logistics network into the U.S. market. HYTX's extensive experience and innovative logistics solutions align perfectly with our mission to provide comprehensive, efficient, and high-quality logistics services worldwide.”

“This acquisition leans into the shifting dynamics in global e-commerce logistics, where North America has emerged as the leading revenue generator. With an anticipated annual growth rate of over 10% in the sector, our collaboration with HYTX positions us to capitalize on these opportunities. We are confident that this partnership will enhance our service offerings and further solidify our position as a leader in the global logistics industry.”

Annual Report on 20-F for Fiscal Year 2023 Now Available

Jayud has filed its annual report on Form 20-F for the fiscal year ended December 31, 2023, with the Securities and Exchange Commission. The annual report can be accessed via the SEC's website at http://www.sec.gov and the Company’s investor relations website at https://ir.jayud.com/.

The Company will provide hard copies of its annual report, free of charge, to its shareholders upon request. Requests should be directed to the Company's Investor Relations Department at Jayud Global Logistics Limited, Building 3, No.7 Gangqiao Road, Li Lang Community Nanwan Street, Longgang District Shenzhen, China.

About Jayud Global Logistics Limited

Jayud Global Logistics Limited is one of the leading Shenzhen-based end-to-end supply chain solution providers in China, focusing on cross-border logistics services. Headquartered in Shenzhen, the Company benefits from the unique geographical advantages of providing a high degree of support for ocean, air, and overland logistics. The Company has established a global operation nexus featuring logistic facilities throughout major transportation hubs in China and globally, with footprints in 12 provinces in Mainland China and 16 countries across six continents. Jayud offers a comprehensive range of cross-border supply chain solution services, including freight forwarding, supply chain management, and other value-added services. With its strong service capabilities and research and development capabilities in proprietary IT systems, the Company provides customized and efficient logistics solutions and develops long-standing customer relationships. For more information, please visit the Company’s website: https://ir.jayud.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs, including the expectation that the Offering will be successfully completed. Investors can identify these forward-looking statements by words or phrases such as “may”, “will”, “expect”, “anticipate”, “aim”, “estimate”, “intend”, “plan”, “believe”, “is/are likely to”, “potential”, “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

For more information, please contact:

Jayud Global Logistics Limited
Investor Relations Department
Email: ir@jayud.com  

Investor Relations Contact:
Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email: matthew@strategic-ir.com

FAQ

What is the stock symbol for Jayud Global Logistics?

Jayud Global Logistics is listed as NASDAQ: JYD.

What is the expected growth rate of the e-commerce logistics sector by 2027?

The e-commerce logistics sector is anticipated to grow at an average yearly rate of over 10% to a value of approximately US$788 billion by 2027.

Where can shareholders access Jayud's annual report for fiscal year 2023?

Shareholders can access Jayud's annual report for fiscal year 2023 on the SEC's website at http://www.sec.gov and the Company’s investor relations website at https://ir.jayud.com/.