Shares of the MingZhu Logistics Holdings Limited (YGMZ) stock were declining in the current market trading session today on December 29, 2021. YGMZ stock price saw a push of 5.68% to reach $1.86 a share at the time of this writing. The trading volume on the last check was 11,807,344, far higher than the average trading volume. Let’s deep dive to understand the reason behind this bull.

What’s Happening?

YGMZ stock became bullish today after the company announced the share purchase agreement for the acquisition of CheYi Network. MingZhu will acquire 100% equity of the equity interest of Cheyi (BVI) Limited under this agreement. The total consideration for this acquisition is an aggregate of $29,466,032. This consists of 3,189,000 fully paid ordinary shares of the YGMZ stock, $2,000,000 payment at closing, and Year-2021 and 2022 earnout payments of $8,826,019 and $5,884,013 respectively if the net income of the company to be acquired is no less than the $3,000,000 for the fiscal year 2021 and 2022. The transaction is expected to close by December 13, 2021.

CheYi Network is the comprehensive automobile service platform established in December 2015. It provides a variety of services to the automotive industry. Its integrated business platform consists of more than 6,000 vehicles and drivers.

Financial View of the YGMZ stock

In the previous month, the company announced unaudited financial results for the six months ended June 30, 2021, according to which

• MingZhu generated $9.6 million in revenue in the first six months of 2021. This represents an increase of $0.7 million, or 8.2% as compared to $8.9 million in the same period of the previous year. The subcontracting business of the company is mainly attributable to this increase.
• The gross profit of the YGMZ stock was $1.4 million in the first half of 2021. This represents an increase of $0.2 million, or 15.0% from $1.2 million gross profit in the same tenure of the previous year.
• The gross margin of the company was 14.3%, 0.8 percentage points higher than the gross margin in the same period of the previous year.
• The company spent $932,409 in general and administrative expenses in the first six months of 2021. These expenses were $579,139 in the same tenure as the previous year.
• The operating income of the YGMZ stock was $386,940 in the recently reported tenure, 24.0% higher than the same period of the previous year.
• The company ended the quarter with $14.2 million in cash, cash equivalents, and restricted cash.

Wrap Up

The momentum is positive for YGMZ stock after the announcement of the share purchase agreement by MingZhu. The per-share price declined by 15.12% in the last thirty days and almost 82% year to date.