MingZhu Logistics to Acquire Alliance Liquor

Rhea-AI Summary

MingZhu Logistics Holdings Limited (NASDAQ: YGMZ) announced a non-binding memorandum of understanding to acquire Guizhou Alliance Liquor Management Co., Ltd. This strategic acquisition aims to enhance its presence in the commercial liquor distribution market in China, particularly focusing on Baijiu, China's national drink. The deal aligns with MingZhu's plan to leverage synergies between its logistics expertise and Alliance Liquor's market knowledge. With the revival of traditional gatherings and increased consumer spending on spirits, the company anticipates capturing additional market share and revenue opportunities. The acquisition is part of MingZhu's ongoing strategy to expand its business.

Positive

• Strategic acquisition to enhance presence in the lucrative Chinese liquor distribution market.
• Leverages existing logistics network and market position to capture additional market share.
• Potential for revenue growth by developing a Baijiu brand and customization services.

Negative

• None.

SHENZHEN, China, Feb. 21, 2023 /PRNewswire/ -- MingZhu Logistics Holdings Limited ("MingZhu" or the "Company") (NASDAQ: YGMZ), an elite provider of logistics and transportation services to businesses, today announced it has entered into a non-binding memorandum of understanding to acquire Guizhou Alliance Liquor Management Co., Ltd. (formerly known as Guizhou Minzusheng Liquor Co., Ltd., hereafter "Alliance Liquor"), a China-based distributor of Baijiu. The companies plan to further invest in and develop a commercial liquor distribution business across China.

The acquisition is part of Mingzhu's previously announced strategic plan, under which the Company announced its intention to expand into the commercial liquor distribution market given the synergies and adjacency to its existing business. This initially included cooperating with a China-based distributor of Baijiu and other spirits to enhance its commercial liquor distribution business across China, subject to final agreement. The Company was also evaluating distribution of its own series of Premium Chinese Baijiu, along with a broader portfolio consisting of spirits from other third party producers, which it currently plans to brand as the Alliance of Baijiu.

Alliance Liquor is a liquor distributor that focuses on distributing Baijiu brewed in Maotai town, Guizhou. Baijiu is considered to be China's national drink and is the dominant spirits sold in the domestic China market, with the "white liquor" a normal staple at occasions from family gatherings to business banquets while the Maotai town is the most well-known origin of Baijiu. Under the agreement, once the acquisition is completed, Alliance Liquor will develop its own Baijiu brand and high-end liquor customization OBM (Original Brand Manufacturer) services.

Mr. Jinlong Yang, Chairman and Chief Executive Officer of MingZhu, commented, "With the reopening of the economy and business returning to a more normal pace, traditions and customs have returned. With larger gatherings and celebrations once again commonplace staples like Baijiu are now highly sought after. These trends reinforce our positive view of the Chinese spirits market and ability to leverage our market position, which we have been building for over 2 years. The industry has never appeared heathier, with incomes increasing and expenditures on Baijiu and other spirits continuing to grow."

Mr. Jinlong Yang continued, "By combining MingZhu's market position, extensive knowledge of the domestic distribution market, our logistics network and financial resources, with our alliance's keen understanding of the Chinese Baijiu market and its long-term relationships, we think we can capture additional revenue opportunities and market share. We continue to evaluate other opportunities that can serve as natural extensions of our business and be totally additive from both a revenue and profitability standpoint, as we focus on building value for shareholders."

About MingZhu Logistics Holdings Limited (NASDAQ: YGMZ)

Established in 2002 and headquartered in Shenzhen, China, MingZhu Logistics Holdings Limited is a 4A-rated professional trucking service provider. Based on the Company's regional logistics terminals in Guangdong Province, MingZhu Logistics Holdings offers tailored solutions to our clients to deliver their goods through our network density and broad geographic coverage across the country by a combination of self-owned fleets tractors and trailers and subcontractors' fleets. For more information, please visit ir.szygmz.com.

Forward-Looking Statements

The statements in this press release regarding the Company's future expectations, plans and prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding plans, goals, objectives, strategies, future events, expected performance, assumptions and any other statements of fact that have not occurred. Any statements that contain the words "may", "will", "want", "should", "believe", "expect", "anticipate", "estimate", "calculate" or similar statements that are not factual in nature are to be considered forward-looking statements. Actual results may differ materially from historical results or from those expressed in these forward-looking statements as a result of a variety of factors. These factors include, but are not limited to, the Company's strategic objectives, the Company's future plans, market demand and user acceptance of the Company's products or services, technological advances, economic trends, the growth of the trucking services market in China, the Company's reputation and brand, the impact of industry competition and bidding, relevant policies and regulations, fluctuations in China's macroeconomic conditions, and the risks and assumptions disclosed in the Company's reports provided to the CSRC (China Security Regulatory Commission) For these and other related reasons, we advise investors not to place any reliance on these forward-looking statements, and we urge investors to review the Company's relevant SEC filings for additional factors that may affect the Company's future results of operations. The Company undertakes no obligation to publicly revise these forward-looking statements subsequent to the filing of these documents as a result of changes in particular events or circumstances.

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SOURCE MingZhu Logistics Holdings Limited

FAQ

What is the purpose of MingZhu's acquisition of Guizhou Alliance Liquor?

The acquisition aims to enhance MingZhu's presence in the commercial liquor distribution market in China and leverage synergies with its logistics services.

What type of products will MingZhu distribute after acquiring Alliance Liquor?

MingZhu plans to distribute Baijiu and other spirits, including its own premium Baijiu brand and customized liquor services.

When was the acquisition of Alliance Liquor announced?

The acquisition was announced on February 21, 2023.

What are the expected benefits for MingZhu from this acquisition?

MingZhu expects to capture additional revenue opportunities and market share by combining its logistics capabilities with Alliance Liquor's market knowledge.

What market trends support MingZhu's acquisition decision?

The return of traditional gatherings and increasing consumer spending on spirits in China support MingZhu's acquisition decision.