NEW YORK – MingZhu Logistics Holdings Limited (Nasdaq: YGMZ), a prominent logistics and transportation service provider, has announced its intention to acquire Oxylus Global Inc., a company specializing in digital asset infrastructure. The transaction, which is an all-stock acquisition, is expected to close by the end of 2024, pending customary closing conditions and regulatory approvals.
The acquisition is part of MingZhu's strategy to diversify its business and accelerate growth by integrating cutting-edge technologies such as AI and satellite-based services into the traditional logistics industry. Oxylus is known for its development of a virtual Starlink and space-based supercomputing and optical communications network, which supports customers globally through an AI-enabled, global satellite network.
Jinlong Yang, Chairman and CEO of MingZhu, expressed confidence that Oxylus's industry leadership and successful platform will bolster MingZhu's growth and significantly expand future opportunities. He emphasized the transformative impact of AI and new technologies on the global economy, noting that companies integrating these platforms can achieve competitive advantages. Yang stated that the acquisition aligns with MingZhu's commitment to aggressive diversification and growth, positioning the company for long-term success.
Oxylus, which plans to establish its headquarters in Zug, Switzerland, operates regional offices in Shanghai, Seoul, and New York. It is deploying the world's first virtual Starlink and space-based supercomputing network, with multiple satellite launch sites in strategic locations.
MingZhu, headquartered in Shenzhen, China, has been a 4A-rated trucking service provider since 2002, offering tailored logistics solutions across China. The company operates a network of self-owned and subcontracted fleets.
This news is based on a press release statement from MingZhu Logistics Holdings Limited. The company cautions that the statements regarding future expectations and plans are forward-looking and subject to risks and uncertainties. These include the possibility that the benefits of the acquisition may not materialize as expected or within the anticipated timeframe, integration challenges, and potential regulatory actions related to the acquisition. Investors are advised not to place undue reliance on these forward-looking statements.
InvestingPro Insights
As MingZhu Logistics Holdings Limited (Nasdaq: YGMZ) embarks on its strategic acquisition of Oxylus Global Inc., investors and analysts are closely monitoring the company's financial health and market position. According to InvestingPro, MingZhu is currently trading at a low Price / Book multiple of 0.3, which might indicate that the company's market valuation is relatively conservative compared to its book value. This could be an attractive entry point for value investors seeking to capitalize on the potential upside from the company's diversification into digital asset infrastructure.
Despite MingZhu's aggressive growth strategy, it's important to note that the company has experienced significant price volatility. The stock has seen a 1 Month Price Total Return of -13.72% and a 6 Month Price Total Return of -36.75%, reflecting the high-risk nature of the investment. Moreover, with a gross profit margin of just 3.45% over the last twelve months as of Q4 2023, MingZhu's profitability from core operations appears to be under pressure, which is a critical factor for investors to consider.
On the upside, the company's revenue grew by 40.13% during the same period, indicating robust top-line growth that could be further accelerated by the acquisition of Oxylus. Additionally, MingZhu's market capitalization stands at 12.98M USD, suggesting that it is a smaller player in the industry with room to grow.
InvestingPro Tips highlight that MingZhu does not pay a dividend to shareholders, which may be relevant for income-focused investors. However, for those interested in the growth potential of MingZhu's merger with Oxylus, the company's expansion into new technology frontiers could offer long-term benefits.
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