Jayud Global Logistics Limited (NASDAQ: JYD) has announced a significant expansion into the North American market through the acquisition of a 51% controlling stake in HYTX Warehouse Inc., a major logistics company based in Azusa, California. This move, executed through Jayud’s subsidiary, Joyed Logistics Services Inc., aims to enhance Jayud’s logistics capabilities and capitalize on the booming e-commerce sector.
Strategic Acquisition and Financial Details
Under the agreement, the equity interests in HYTX will transfer to Joyed Logistics upon execution. The purchase price will be determined based on HYTX’s actual annual average net profit from the acquisition closing date to December 31, 2026, with part of the payment in cash and the remainder in Jayud’s ordinary shares by 2027. This performance-based structure underscores Jayud’s strategic focus on investing in profitable and synergistic business operations.
North American E-Commerce Logistics Growth
According to the Economic and Commercial Development Bureau (ECDB), North America surpassed the Asia-Pacific (APAC) region in e-commerce logistics revenues in 2023. The global market for e-commerce logistics is expected to grow at a compound annual growth rate (CAGR) of over 10%, reaching approximately $788 billion by 2027. This growth is fueled by rising consumer demand and the expansion of online retail platforms.
Global Air Cargo Demand
The acquisition comes at a pivotal time as global air cargo demand continues to rise, driven by the international market and e-commerce boom. The International Air Transport Association (IATA) reported an 11.9% year-over-year increase in demand as of February 2024. Jayud’s acquisition of HYTX aligns with these trends, positioning the company to meet the growing logistics needs of the e-commerce sector.
HYTX’s Expertise and Integration
HYTX Warehouse Inc. brings over two decades of experience in logistics technologies and a comprehensive network of global suppliers, overseas warehouses, and logistics services. Jayud plans to integrate HYTX’s customers into its logistics software solutions, ensuring seamless operations within U.S. and Chinese customs systems. HYTX’s expertise includes one-piece delivery, goods transfer, returns and label replacement, and last-mile delivery, supported by a professional team and efficient operational processes.
Enhanced Service Offerings
This acquisition enables Jayud to offer a wide range of services, including drop shipping of small pieces, bulk forwarding, traditional goods, FBA goods, secondary sales of returns and label replacement, and last-mile delivery. These services cater to the diverse needs of overseas warehouses, enhancing Jayud’s ability to provide comprehensive logistics solutions.
Strategic Impact and Market Position
Jayud’s Chairman and CEO, Xiaogang Geng, commented on the acquisition, stating, “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.”
Geng highlighted the shifting dynamics in global e-commerce logistics, with North America emerging as the leading revenue generator. He expressed confidence that the collaboration with HYTX would enhance Jayud’s service offerings and solidify its position as a leader in the global logistics industry.
Financial Performance and Future Prospects
Jayud reported significant financial growth in its recent annual report. The company achieved a revenue of $200 million in 2023, with a net income of $15 million. The acquisition of HYTX is expected to contribute significantly to Jayud’s financial performance, potentially adding $50 million in annual revenue and representing a 25% increase.
This growth is crucial as Jayud continues to diversify its revenue streams and mitigate risks associated with market fluctuations. The company’s strategic investments in profitable ventures like HYTX are expected to enhance its market valuation and strengthen its financial position.
Annual Report Filing
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 report is accessible via the SEC’s website and Jayud’s investor relations website. Shareholders can request hard copies of the report from Jayud’s Investor Relations Department.
About Jayud Global Logistics Limited
Jayud Global Logistics Limited, headquartered in Shenzhen, is a leading end-to-end supply chain solution provider specializing in cross-border logistics. The company benefits from its strategic location, offering robust support for ocean, air, and overland logistics. Jayud has established a global operation nexus with logistics 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. The company’s strong service capabilities and research and development in proprietary IT systems enable it to provide customized and efficient logistics solutions, fostering long-standing customer relationships.
