MingZhu Logistics to Expand into Commercial Liquor Distribution

Rhea-AI Summary

MingZhu Logistics Holdings Ltd. (NASDAQ: YGMZ) announced plans to expand into the commercial liquor distribution market, leveraging its existing logistics capabilities. The company intends to collaborate with a China-based distributor of Baijiu, a traditional Chinese spirit, and may launch its own premium Baijiu brand. The growing Chinese spirits market presents significant revenue opportunities, as Baijiu sales surpassed 11 billion liters in 2019. CEO Jinlong Yang expressed optimism about capturing market share through this strategic diversification.

Positive

• Expansion into the lucrative commercial liquor distribution market, enhancing diversification.
• Collaboration with a distributor positions the company to capitalize on the growing demand for Baijiu.
• Potential to launch a premium Baijiu brand, tapping into a popular segment in China.

Negative

• Dependence on the successful collaboration with a third-party distributor, which may pose operational risks.
• Entering a new market may require significant investment and expose the company to untested business challenges.

SHENZHEN, China, Dec. 13, 2021 /PRNewswire/ -- MingZhu Logistics Holdings Ltd. (NASDAQ: YGMZ) (MingZhu or the Company), a leading trucking service provider, today announced that it intends to expand into the commercial liquor distribution market given the synergies and adjacency to its existing business. The Company intends to cooperate with a China-based distributor of Baijiu and other spirits to enhance its commercial liquor distribution business across China, subject to final agreement.

As part of its preliminary strategic plan, the company may distribute 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.

Baijiu, which typically has an alcohol content between 35% to 60%, can range in cost from a few U.S. dollars per bottle for a commodity brand to a few thousand dollars for the highest grade. Baijiiu 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. Baijiu rose to international fame when Chairman Mao Zedong served it to President Nixon at their historic 1972 banquet in Beijing.

It is estimated that 11 billion liters of Baijiu were sold in 2019, more than the total of whisky, vodka, gin, rum and tequila combined, equating to a liter and a quarter each for every man, woman and child living at that time. (source: The Drinks Business). Baijiu is also believed to have distinct health benefits. With over a thousand active bacteria involved in the creation of baijiu, taking a shot is akin to purchasing expensive supplements from a health food shop. (source: Baijiublog.com)

Mr. Jinlong Yang, CEO of MingZhu, said, "We have a positive view of the Chinese spirits market given its large, established size, growth profile and sustainability. The industry has never appeared heathier, with incomes increasing and expenditures on Baijiu and other spirits continuing to grow. By combing MingZhu's extensive knowledge of the domestic distribution market, our logistics network and financial resources, with our alliance's keen understanding of the Chinese spirits market and its long-term relationships, we think we can capture significant 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 and Xinjiang Autonomous Region, 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 MingZhu Logistics' stock symbol?

MingZhu Logistics is traded under the stock symbol YGMZ.

What market is MingZhu Logistics expanding into?

MingZhu Logistics is expanding into the commercial liquor distribution market.

Who is partnering with MingZhu Logistics in liquor distribution?

MingZhu is collaborating with a China-based distributor of Baijiu and other spirits.

What is Baijiu?

Baijiu is a traditional Chinese spirit with alcohol content ranging from 35% to 60%.

How many liters of Baijiu were sold in 2019?

Approximately 11 billion liters of Baijiu were sold in 2019, dominating the spirits market in China.