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MingZhu Logistics: 2021 Should Bring Growth, But Valuation Remains High

Sunrise Analysis profile picture
Sunrise Analysis


  • MingZhu's revenue was down in the first half of 2020 due to a lockdown in Xinjiang.
  • Otherwise, ecommerce seems to be a significant boon to the company.
  • Further, with new deals, the company is prepared for growth in 2021.
  • Unfortunately, the company remains expensive compared to peers and barely profitable.

MingZhu Logistics (NASDAQ:YGMZ) is an interesting Chinese trucking company, whose revenue has taken a hit from Covid-19, but maintains the potential to significantly pickup with new agreements and growth in e-commerce. However, the company’s profitability remains limited and though its market cap is small, its relative valuation remains high.


For the first half, MingZhu Logistics earned $8.9 million in revenue, a $0.8 million decrease year over year, due to a decrease in demand in Xinjiang. The company saw a 33% revenue increase in Guangdong to $5.2 million, which was offset by a 36.5% decrease in Xinjiang to $3.7 million. The reason behind this was a lockdown in Xinjiang, which had a worse Covid outbreak, and an increase in e-commerce in Guangdong. Net income for the period decreased year over year to $106.7 thousand from $317.2 thousand. This represents earnings per share of $0.01, down from $0.04 a year ago.

The company saw a significant impact from Covid-19, particularly when Xinjiang locked down again in June. Going forward, MingZhu should see an improvement in its business as demand continues to return in both provinces and e-commerce continues to stay strong. Likely too, as the economy recovers, MingZhu will be able to collect on some of its accounts receivable.

New Agreements

Over the past month, MingZhu has inked several new agreements. The first is an agreement with China Merchants in Xinjiang to provide exclusive first and last-mile transportation between slack coal mines and railroads. The slack coal market in Xinjiang is expected to reach 87.7 million tons in 2021, which translates to the equivalent of, at least, 1.75 million truckloads - potentially twice that. Though it should be recognized that MingZhu will not be transporting all of the coal in Xinjiang, nor that all coal will need to go to the railway. Other factors too will affect how this business

This article was written by

Sunrise Analysis profile picture
I'm an individual investor. I generally invest for the long term and look for companies at an attractive price that have the ability to grow naturally and who stand to benefit from large trends in the economy. I try to provide insight into how new developments at certain companies will affect their long-term prospects. I also try to share other interesting investment ideas with investors where I think there is significant mispricing or potential for growth.

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Comments (3)

It’s over 10 stock
Will fly soon
what the heck was that crazy pop to $58 high all about?
Sunrise Analysis profile picture
Perhaps an anomaly in the bid/ask price.
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