SHENZHEN, China, Jan. 23, 2024 /PRNewswire/ -- Jayud Global Logistics Limited (NASDAQ: JYD) ("Jayud" or the "Company"), a leading end-to-end supply chain solution provider based in Shenzhen, specializing in cross-border logistics, today announced that Shenzhen Jayud Logistics Technology Co., Ltd., a wholly-owned subsidiary of Jayud in China, entered into equity purchase agreements to acquire 51% stakes in two international logistics companies, respectively, namely Qingdao Oranda Supply Chain Management Co., ...

Financial Performance - Revenues for the year ended December 31, 2022, were RMB 651,991,593 (approximately US$93,615,081), representing a 19.4% increase from RMB 545,593,497 in 2021[22] - Gross profit for 2022 was RMB 37,386,114 (approximately US$5,368,020), up from RMB 34,500,975 in 2021, indicating a gross margin improvement[22] - Operating profit decreased to RMB 702,208 (approximately US$100,825) in 2022 from RMB 12,807,764 in 2021, reflecting increased operating expenses[22] - Net income for 2022 was RMB 1,377,897 (approximately US$197,843), a significant decline from RMB 10,223,668 in 2021, highlighting challenges in profitability[22] - Total operating expenses rose to RMB 36,683,906 (approximately US$5,267,195) in 2022, compared to RMB 21,693,211 in 2021, driven by higher selling and administrative expenses[22] - Research and development expenses increased to RMB 2,096,317 (approximately US$300,996) in 2022, up from RMB 1,460,960 in 2021, indicating a focus on innovation[22] Assets and Liabilities - As of December 31, 2022, total assets decreased to RMB 125,422,314 from RMB 170,842,238 in 2021, representing a decline of approximately 26.6%[25] - Total liabilities decreased to RMB 94,524,726 in 2022 from RMB 154,071,959 in 2021, a reduction of about 38.7%[25] - Cash and cash equivalents at the end of 2022 were RMB 28,440,241, down from RMB 40,266,725 at the end of 2021, reflecting a decrease of approximately 29.3%[26] - Net cash provided by operating activities turned negative at RMB (15,231,895) for the year ended December 31, 2022, compared to RMB 4,239,582 in 2021, indicating a significant operational cash flow deterioration[26] - The company reported a net cash used in investing activities of RMB (5,728,754) for 2022, a substantial increase from RMB (634,871) in 2021, indicating increased capital expenditures[26] Regulatory Environment - As of December 31, 2022, the company had obtained all necessary licenses and permits for operations in China, but future regulatory changes may require additional approvals[15] - The company is not currently subject to the filing requirements with the China Securities Regulatory Commission (CSRC) for its initial public offering on Nasdaq in April 2023[16] - The Holding Foreign Companies Accountable Act poses a risk, as the company could face trading prohibitions if its auditor is not inspected by the PCAOB for two consecutive years[17] - The company has not received any formal inquiries or sanctions from the CSRC regarding its overseas listing, but future offerings may be subject to new regulatory requirements[16] - The CSRC released new regulations for overseas securities offerings and listings by domestic companies, effective March 31, 2023, which require filing for both direct and indirect offerings[171] Market and Competition - The company faces intense competition in the logistics industry, which could adversely affect its market share and operational results[29] - The company is significantly affected by macroeconomic factors and trade restrictions that may impact demand for its supply chain solutions and logistics services[29] - The company’s business growth is highly dependent on the development of international commerce and the e-commerce industry, which are sensitive to macroeconomic conditions[46] - The company faces intense competition in the supply chain solution industry, which is highly fragmented, potentially affecting revenue and profitability[51] - Trade disputes and tariffs between the PRC and the United States have contributed to increased market volatility and may adversely impact the company's operations[48] Customer Dependency - The company relies on a limited number of customers for a significant portion of its revenues, and the loss of key customers could negatively impact its financial performance[33] - Revenue from the five largest customers accounted for approximately 59.9%, 35.8%, and 46.1% for the years ended December 31, 2020, 2021, and 2022 respectively[89] Operational Challenges - The company may face challenges in meeting customer demand during peak seasons, which could adversely affect its competitive position[68] - The company may face challenges in obtaining adequate cargo space during peak seasons, which could damage its reputation[80] - The company relies on third-party service providers for transportation and logistics, and any failure in these relationships could adversely affect operations[84] - The company is sensitive to fluctuations in China's road transportation market, which can impact cargo volumes and revenue[77] Growth and Expansion - The company may require additional capital to pursue its business objectives, and failure to secure sufficient financing could adversely affect its financial condition[30] - The company may require significant capital for expansion plans, including logistics infrastructure and technology investments, which may not be available on acceptable terms[62] - The company plans to establish larger, custom-designed warehouses to increase storage capacity and improve logistics workflow[86] - The total number of customers increased from 535 in 2020 to 1,299 in 2021 and further to 1,879 in 2022, indicating a growth of approximately 251% from 2020 to 2022[93] Labor and Costs - The company has observed an overall tightening labor market, leading to increased labor costs and potential seasonal labor shortages[96] - Labor costs comprised 5.3%, 3.5%, and 3.6% of total operating expenses for the years ended December 31, 2020, 2021, and 2022, respectively[96] - The company may face significant increases in fuel prices, which could adversely affect gross profits if costs cannot be passed on to customers[100] Technology and Operations - The technology platform's performance is critical, and any disruptions could adversely affect business operations and results[117] - The company may face challenges in maintaining and upgrading its technology platform, leading to service outages and delays[117] Legal and Compliance Risks - The company is subject to various regulations and must maintain necessary licenses and permits, with potential penalties for non-compliance[102] - The company is subject to anti-corruption and anti-bribery laws, and non-compliance could result in severe penalties and impact financial condition[131] - The company faces increased costs and risks associated with compliance to evolving regulatory measures, which may divert management's focus from revenue-generating activities[136] Economic and Political Risks - The company’s operations are significantly influenced by economic, political, and legal developments in China, where it sources substantially all of its revenues[150] - Changes in China's economic policies or regulations could adversely affect the company's financial condition and results of operations[151] - The Chinese government has significant oversight and discretion over business operations, which could materially and adversely impact the company's results and future prospects[160] Taxation and Financial Reporting - The statutory enterprise income tax rate in China is 25%, but small low-profit enterprises can benefit from a reduced rate of 20% on 12.5% of their taxable income up to RMB 1 million[202] - If deemed a PRC resident enterprise, dividends to non-PRC individual shareholders may be taxed at 20%, while non-PRC enterprises face a 10% tax rate[197] - The PRC tax authorities have discretion to adjust taxable capital gains based on the fair value of transferred assets, potentially increasing tax costs[200]