Canaan(US:CAN)2022-03-03 16:39Financial Data and Key Metrics Changes - In Q4 2021, the company achieved a revenue of RMB 2.18 billion, representing a 55.8% quarter-over-quarter increase and exceeding the upper range of guidance [8][23] - The net profit for Q4 2021 reached RMB 1.2 billion, marking a record high for the company [8] - For the full year 2021, total net revenues were RMB 4.99 billion, up more than tenfold compared to 2020, with a net profit of RMB 2 billion [8][26] - Gross profit for Q4 2021 was RMB 1.49 billion, with a gross margin of 68%, while the full-year gross margin was 57.2% [24][31] Business Line Data and Key Metrics Changes - The company sold 7.74 million Terahash per second of computing power in Q4 2021, a 15.5% increase quarter-over-quarter [9][23] - The total computing power sold for the full year 2021 was 32.34 million Terahash per second, up 238.5% year-over-year [8] - AI business revenue in Q4 2021 was RMB 5.5 million, reflecting a year-over-year growth of 150.3% [25] Market Data and Key Metrics Changes - The company expanded its customer base to include new clients from Malaysia, UAE, Argentina, and Peru, with new customers contributing 41% of total computing power sold [10] - Traditional markets like Central Asia, North America, and Europe remained strong, with existing clients accounting for 59% of total sales [10] Company Strategy and Development Direction - The company aims to enhance its R&D capabilities, focusing on chip design and improving product performance in 2022 [21] - The strategy includes balancing production capacity between machine sales and mining operations to maximize profitability [14][21] - The company is committed to developing its AI business and has established strategic partnerships to promote localized open-source projects [15] Management Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as semiconductor supply shortages and geopolitical factors affecting Bitcoin prices [6][7] - The company remains confident in its revenue for upcoming quarters, supported by strong pre-sales performance and secured production capacity [11] - Management expects total net revenue in Q1 2022 to be between RMB 1.5 billion and RMB 1.6 billion, indicating a year-over-year increase of 275% to 300% [22] Other Important Information - The company completed a share repurchase program, buying back approximately 3.6 million ADS for a total of $20 million [19] - As of December 31, 2021, cash and cash equivalents were RMB 2.68 billion, up 586% from the previous year [32] Q&A Session Summary Question: Impact of Bitcoin price drop on sales and control measures - Management noted that Bitcoin price fluctuations historically lead to a decline in sales, but institutional clients tend to have a long-term perspective, mitigating immediate impacts [34] - Measures to mitigate negative impacts include reaching new clients and adjusting machine allocations between inventory and mining [35] Question: Progress on computing power deployment for mining business - As of February 28, 2022, the company had 2.38 million Terahash of mining computing power under deployment, with plans to continue increasing deployment while balancing sales and mining [38] Question: Competitive moat against competition - The competitive landscape has stabilized, but the company believes its accumulated experience and technological advancements provide a significant advantage [39][40] - The company has developed strong partnerships to secure production capacity and mitigate supply chain risks [40] Question: Market share insights - The company estimated its market share based on computing power sold, achieving 22.3 million Terahash in 2021 compared to 6.6 million in 2020, indicating growth in market share [46] Question: Stock dividend program - Management is evaluating the situation regarding future stock repurchase proposals and is committed to investing in R&D and market development to enhance shareholder value [49]