Canaan Inc.

Q4 2021 Earnings Conference Call


spk02: Ladies and gentlemen, thank you for standing by and welcome to Canon Inc.' 's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen-only mode. After the management's prepared remarks, we will have a question and answer session. Please note that this event is being recorded. Now I'd like to hand the conference over to your host today, Ms. C. Xiong, Investor Relations Manager of the company. Please go ahead, Ms. Xiong.
spk07: Thank you, operator. And hello, everyone. Welcome to our earnings conference call. The company's financial and operating results were released by our newswire services earlier today and are currently available online. Joining us today are our chairman and CEO, Mr. Nan Geng Zhang, and our CFO, Mr. Jin Cheng, James. In addition, Mr. Xiao Minglu, our SVP, Mr. Liu Wang, Our senior director will also be available during the question and answer session. Mr. Zhang will start the call by providing an overview of the company and performance highlights for the quarter. Mr. Cheng will then provide details on the company's operating and financial results for the period before, and we open the call up for your questions. Before we continue, I would like to refer you to our State Harbor Statement in our earnings press release. Today's call will include forward-looking statements. These statements include, but not limited to, our outlook for the company, statements and estimates, and project future results of operations, or the performance of the company. These statements speak only as of the date hereof, and the company assumes no obligation to revise any forward-looking statements that may be made in today's press release call, or webcast, except as required by law. These statements do not guarantee future performance and are subject to risk, uncertainties, and assumptions. These report to the press release and the risk factors and documents we file with Securities and Exchange Commission, including our most recent annual report on Form 20-F for information on risk, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call and webcast, we will discuss both GAAP financial measures and certain non-GAAP financial measures, which we believe are useful as supplemental measures of the company's performance. These non-GAAP measures should be considered in addition to and not as a substitute or in isolation for GAP results.
spk01: You can find additional resources regarding GAP measures, including a great compilation of comparable GAP methods and GAP results in our learning series, which is posted on the company's website. With that, I would now like to call over to our chairman and CEO, Ms. Anna Tuchel.
spk05: Hello, everyone. I'm Chang Langgeng, CEO and CEO of Chang Langgeng Technologies. First of all, I'd like to start with the CQO and the whole year's guidelines. In the fourth quarter of 2021, we experienced a massive fluctuation in the price of Bitcoin, continuous development changes in the epidemic, complex influence of geopolitical factors, and difficulties such as the emergence of further shortcomings in different systems. We have a firm attitude to do things, and a steady but flexible operation to overcome many challenges. We have seized opportunities and achieved many results. With a strong 4G performance, we have successfully completed the operation of 2021. This quarter, as we continue to expand in the overseas market, our profit-saving sales have maintained an upward trend, reaching 7.74 million T, creating a new record. We achieved a revenue of RMB21.8 billion, with a return growth of 65.8%, significantly exceeding our previous record. The net profit reached RMB12 billion, creating the best profit in history. In 2021, we completed a year-round sales of 2234,000 units, with a return growth of 238.5%. We achieved a total revenue of RMB49.87 billion, with a return growth of 1014%, with a net profit of RMB21 billion.
spk07: In the fourth quarter of 2021, we face a wide range of challenges, including high volatility in Bitcoin prices, pandemic involvement, complex impacts due to geopolitical factors, and continued semiconductor supply shortages across different fabrication production lines. With a pragmatic attitude and flexible yet steady operations, we seized opportunities amidst numerous challenges. This enabled us to achieve progress on multiple fronts, as demonstrated by our strong financial performance in the fourth quarter to close out the year 2021. During the fourth quarter, as we continued to expand in overseas markets, we maintained growth momentum in our computing power sales, reaching a record high of 7.74 million terahash per second. For the quarter, we achieved a 65.8% quarter-over-quarter increase in revenue to earn RMB 2.18 billion, smashing through the upper range of our guidance. We earned a net profit of RMB 1.2 billion, another record high for our company. For the full year, we completed 22.34 million terahash per second in total computing power sold, up 238.5% year-over-year. Total net revenues reached an RMB 4.99 billion, up more than tenfold than 2020, generating a net profit of an RMB 2 billion for the year.
spk05: The second part is about mining sales. Let's take a look at the operation of this quarter. In terms of mining sales, in the fourth quarter, we completed a total sales of 7.74 million pieces. In the third quarter, we made a 15.5% growth on a strong sales record, and we made the best record in the single quarter. We see that the market demand continues to remain in a strong state. Although the price of Bitcoin has experienced a lot of fluctuations during the fourth quarter, we are still able to develop new customers through improved productivity and yield, flexible pricing strategies, stable supply, We have improved the overall sales unit price and promoted revenue growth. We will continue to diversify the sales network in the overseas market, such as Southeast Asia and South America. This is the first time that we have customers from Malaysia, Argentina, Argentina, and Peru. Our new customers buy 41% of the profit. At the same time, we see that the demand for traditional overseas markets, such as Central Asia, North America, and Europe, is still strong. Next, let's look at our detailed operations during the quarter. In terms of our mining machine sales, we realized a 15.5% quarter-over-quarter increase
spk07: to deliver 7.74 million terahash per second of computing power to our clients, setting a new historical high for our quarterly sales performance. Market demand remains robust. Despite considerable volatility in Bitcoin prices during the first quarter, we were able to increase the overall average selling price and drive revenue growth through various measures. These measures include enhancing production capacity and yield rate, acquiring new customers, leveraging flexible pricing strategies, maintaining stable supply, dynamically adjusting the proportion of spot sales. We continue to diversify our computing power sales to more overseas markets, especially in Southeast Asia and Southeast America. For the first time, we have customers from Malaysia, UAE, Argentina, Peru, and other emerging markets. Orders by new customers contributed a significant portion of our computing power sold, reaching 41%. Meanwhile, demand remains strong in traditional overseas markets like Central Asia, North America, and Europe. as orders by our existing clients represented 59% of total computing power sold. Our ability to expand our geographic coverage, foster repeat repurchases from large mining companies, and maintain a consistent and stable supply chain allows us to more efficiently convert market demand into our sales.
spk05: The company's pre-sale data and the year-end production capacity set by the delivery factory also give us confidence in the future sales. After saving a certain proportion of the production capacity of the self-sufficiency mining and cash sales, until December 31, 2021, the level of pre-sale was RMB 13.4 billion, reaching a new record, with a transfer of more than 6 million T. We will be very confident in our revenue for the quarters to come as we have recorded a solid equation of performance and secured production capacity with our founding partners for the year.
spk07: In addition to our production capacity allocation for spot sales and mining business, we received contract advances of an RMB 1.34 billion from contract sales customers as of December 31st, 2021, setting a new record. This demonstrates over 6 million THS to be delivered. The strong contract sales brought substantial cash inflows for our company, and reflect strong demands from Bitcoin miners and their recognition of our product quality and delivery capabilities.
spk05: The third part is mining. We are now working on the operation of equipment business such as overseas operation centers and mining. Regarding our Bitcoin mining business,
spk07: We set up overseas operation centers to carry out the mining operations and other Bitcoin-related business. During this quarter, our mining operations in Kazakhstan encountered multiple challenges, including pandemic factors, logistic congestion, and the power supply shortage in the winter, which all negatively impacted our mining machine online rate. We are closely monitoring the local energy supply situation. Our staff on-site are making best efforts and proactively communicate with our partners to solve the problem as soon as possible. We will also be prudent in carrying out additional deployment.
spk05: I would like to emphasize that although mine mining business has recently encountered some unfavorable factors, But we will continue to work on mining business as a long-term strategy of the company. We will continue to play our own mining and supply advantages. Through more extensive layout and deeper cooperation, we will be able to make dynamic adjustments between sales and mining business to improve the efficiency of operation.
spk07: It is necessary to emphasize that although our mining business encounters headwinds in the near term, Developing the mining business is still one of our long-term strategies. With lessons from past experience, we will decisively execute this strategy. We will continue to leverage the advantages of our mining machine supply through expanded presence and deepened collaboration, as well as dynamic allocation of production capabilities between production capacities between machine sales and mining. We endeavor to further enhance the overall economic benefits of our operations.
spk05: The fourth part is about AI. The company's AI business is steadily developing. Currently, it has received positive feedback and continued attention from customers in market scenarios such as smart education hardware and smart home. Recently, we have reached strategic cooperation with the leading operating system open source community and innovation platform Longxi. We remain steadfast in developing our AI business in the fourth quarter. Feedback has been positive thus far, and we are seeing continued interest from customers in intelligent educational hardware, smart homes, and various other education scenarios.
spk07: Recently, we reached a strategic cooperation agreement with OpenAnalyst, a leading open source operating system community and innovation platform. We will jointly explore the development and applications based on the OpenAnalyst operating system and the 10Gate AI chip platform, promoting localized open source projects in the field of edge computing AI chip applications.
spk05: Regarding our R&D,
spk07: In terms of our research and development, we continue to expand our R&D team and enhance our design capabilities. We have achieved the ability to independently implement cheap front-end logic and back-end physical design for multiple advanced nodes, covering the entire packaging, heat dissipation, and mass production processes. In the fourth quarter, our total number of R&D staff increased by 99% year-over-year.
spk05: We established a more comprehensive IT self-reliance system with the help of the self-reliance IP organization. We actively applied through the patent to protect our research and development results. As of December 31, 2021, we have 156 authorized patents, 70 IC design rights and 105 software copyrights.
spk07: we possess a deep self-developed IP matrix and have established an even more comprehensive self-developed IP system. We carefully protect the achievements of our R&D efforts with a range of active patents. As of December 31, 2021, we have accumulated 156 authorized patents, 70 IC layout design rights, and 105 software copyrights. 多国新一代LV矿机项目也在稳步开展中。 我们将坚持深耕行业,为矿工提供更好的产品。 今后我们会坚持只有在芯片投片并成功回片, 整机测试完成的情况下, 再行披露新一代矿机的具体性能参数。 We also continue to make steady progress on a number of R&D projects for new generations of Bitcoin mining machines. We are dedicated to cultivating the industry and providing better products for miners. Going forward, we will disclose specific performance parameters of new generation mining machines only after we chip in and successfully type out and complete the full testing for the machine.
spk05: These six parts are about repurchase. While working hard to promote business development, the company also pays attention to improving the value of shareholders. We have completed the repurchase plan approved in September 2021. The total repurchase is about 3.6 million shares, which is a total of $20 million. The repurchase progress is smooth. The company completed the original plan in advance of this share repurchase. As we continue to propel forward our business, we remain committed to driving value for our shareholders.
spk07: As of today, we have completed the repurchase program approved in September 2021, representing a repurchasing of approximately $3.6 million for the total of $20 million. The repurchase program progressed smoothly, and we were able to complete the program earlier than the expiration date. Subsequently, the Board of Directors will continue to evaluate new repurchase plans from multiple aspects. We will keep you updated on any further progress.
spk05: In 2021, we achieved sustained growth and a strong performance despite various uncertainties and market challenges. It's testament to the efficacy of our strategy and our solid execution 2020 will be a year where we continue to strengthen our research and development skills. The company will continue to upgrade its chip design and improve product performance. 2022 will also be a year where we fully strengthen the customer mindset. As the company's market transfers overseas and the market is globalized, it is important to communicate more closely with customers and provide services for them, including mechanical research, manufacturing, transportation, and social services, In 2022, we remain committed to amplifying our research and development capabilities
spk07: deep diving in chip design, and improving product performance. In 2022, we will also comprehensively enhance our customer orientation as we shift our focus towards overseas markets and expand our presence across the globe. Maintaining close communications and providing best-of-class services become increasingly important to better serve our customers. We are exploring more client-centric ways across our product R&D, manufacturing, transportation, and after-sales services. Additionally, we will further leverage our pragmatic, flexible, and resilient operations to thrive amidst market uncertainties. We will continue to mitigate the impact from market involvement and Bitcoin price fluctuation with steady supply and secure production capacity. and to maximize our profits through strategic balancing our mining machine sales and mining business. We expect our total net revenues in the first quarter of 2022 will be in the range of RMB 1,500 million to RMB 1,600 million, representing an increase of 275% to 300% compared with the first quarter of 2021. Please know that this forecast reflects our current and preliminary views on the market and operational conditions, which are subject to change.
spk05: 我的介绍就到这里,感谢大家。下面有请CFO James。 This concludes my take-home remarks.
spk07: I will now turn the call over to our CFO, James.
spk03: Thank you, Mr. Zhang. And hello, everyone. This is James speaking. Despite volatile market environments and various challenges, we achieved another robust quarter with solid financial results from top line to bottom line. In the fourth quarter, we delivered the computing power sold of 7.7 million tera hashes, representing a sequential growth of 15.5%. Our total net revenues reached RMB 2,184.6 million. up 65.8% quarter over quarter, which was 15.8% higher than the upper limit of our previous forecast in November. For the full year of 2021, our total net revenue reached RMB 4,986.7 million, up more than 10 times year over year. The good top line results came from our record high computing power sold and the responsive delivery, as well as our effective pricing strategy that enables more sports sales driving higher average selling price. Additionally, our effective business development across the continents helped us record strong contract advances of RMB $1,340.7 million as of 2021 end, ensuring substantial cash inflow and steady revenue recognition for quarters ahead. Our gross profit for the quarter doubled sequentially to RMB 1,486.9 million, and the gross margin rate hit 68%, which is an outliner in the past four quarters. Gross margin rate for full year 2021 is 57.2%. Please note that for mining machines delivered during the fourth quarter, we secured the correspondent wafer cost several quarters earlier. From the ongoing demand and supply imbalance across the semiconductor industry and the feedback from our foundry partners, we expect wafer cost price increases in 2022. which will have an impact on our future growth margin rate. Regarding our Bitcoin mining business, as of December 31st, 2021, we have 1.13 million terahashes computing power deployed at mining farms. As of the 2021 end, we held 70.5 Bitcoin with a carrying value of RMB 20.3 million. Our AI business revenue achieved RMB 5.5 million in a quarter, representing a year-on-year growth rate of 150.3% and a sequential growth rate of 20.9%. We kept getting positive feedback from customers in different industries, and we newly cooperated with the ecosystem platform partner, Open Analyst. Development expenses for R&D, 112.0 million, increasing by 179.6% year-over-year, and 20.8% quarter-over-quarter. The increase was primarily attributable to the increased research and development costs for new products. And new hires in research and development team, we will continue to invest in R&D to advance our technology capabilities. As a result of our strong revenue efficient operation and expense management, we realized a record high net profit of RMB 1,196.5 million for quarter four, representing a sequential growth of 114.6%. For the full year of 2021, net profit achieved RMB 2,000.3 million. Non-GAAP adjusted net income was RMB 1,250.7 million for Q4, representing a sequential growth of 112.9%. For the full year of 2021, non-GAAP adjusted net income hit RMB 2,301.6 million. While we are very pleased with our performance achieved in quarter four and in the full year of 2021, we are fully aware that the existing challenges may persist and new challenges may emerge. It's time to think and plan the new year in a prudent way. I would like to talk more about the risk factors and how we tackle them. From marketing environment perspective, we are in the Fed interest rate hike cycle for U.S. dollar. The pace of interest rate increase has and will continue to have an impact on Bitcoin price fluctuation. On the other hand, geopolitical conflicts, even military operations, may also bring further uncertainties to Bitcoin price fluctuations. As Bitcoin price is closely linked to the demand enterprise, for our mining machine. Its fluctuation always has an impact on miners' willingness to expand their mining skills. In past quarters, we continued building up the capability of flexibly allocating goods among contract sales, support sales, and mining operations to seize the opportunity during the Bitcoin price fluctuation and to maximize the average selling price and the overall value. On the supply front, given the ongoing waiver demand and supply imbalance across the semiconductor industry and the ensuing price increase, we expect our production costs to scroll up and bring pressure on the gross margin rate. To sustain adequate waiver supply, we have been actively in communication with our foundry partners and secured the production capacities with considerable amount of cash repayments. We will also continue to support our R&D team to further improve products and better utilize waivers to have higher product efficiency at a lower cost. For our Bitcoin mining businesses, we managed to deploy our computing power as scheduled. and we encountered unexpected winter electricity shortage in both quarter four 2021 and quarter one 2022. We closely monitor the local condition involvement and will continue to be cautious in deploying additional computing power. We also actively evaluate target markets to diversify operational risks. We are aware of the obstacles and we remain resilient in mining business as one of our strategies. We are also aware that some investors have questions about the delisting risk as a US listed Chinese company. Canaan is different from some other China companies listed in the US. We are not under a VIE structure, and we are running a B2B business with markets and corporate customers mostly located outside China. And our principal business activities do not involve large numbers of registered users or deal with vast amounts of user data. Additionally, there is still around a two-year window before SEC gives the final decision. And things may be sorted out before then, considering SEC and CSRC are working closely to figure out a better solution. Ultimately, as a listed company, Canaan has been committed to operational compliance and continues to optimize its management operation and the corporate governance. It takes a good blacksmith to make steel. Despite all the challenges ahead, we are confident in our effective strategies solid execution, as well as our nine-year experience in the industry. We will keep sharpening our R&D capabilities and stay vigilant and proactively mitigate risks with our dynamic operations. Now, I would like to briefly walk you through our financial results for the quarter. Total net revenues in the fourth quarter were RMB 2,184.6 million compared to RMB 38.2 million in the same period of 2020 and RMB 1,317.6 million in the third quarter of 2021, representing a sequential increase of 65.8%. Gross profit was RMB 1,486.9 million compared to RMB 9.1 million in the same period of 2020, representing a sequential increase of 100.5%. Total operating expenses in the fourth quarter of 2021 were RMB 273.7 million compared to RMB 80.1 million in the same period of 2020, and RMB 278.4 million in the third quarter of 2021. Income from operations was RMB $1,213.2 million, up 161.9% sequentially. Net income attributed to ordinary shareholders was RMB $1,196.5 million, up 114.6% sequentially. Non-GAAP adjusted net income was RMB $1,250.7 million, up 112.9% sequentially. Non-GAAP adjusted net income loss excludes share-based compensation expenses. Basic and diluted net earnings per ADS for the quarter were RMB 690 and RMB 681, respectively. As of December 31st, 2021, The company had a cash and cash equivalents of RMB 2,684.2 million, up 586.0% compared to RMB 391.3 million as of December 31, 2020. This concludes our prepared remarks. We are now open for questions.
spk02: We will now begin the question and answer session. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, you press the pound key. Our first question comes from Shuang Sun with Guo Shuang Securities. Your line is open. Hi. Hi. Can you hear me?
spk04: Yes.
spk06: Hi there. I'm Shuang Sun from Guo Shuang Securities. In early 2022, we saw the Bitcoin price experience a dramatic drop. So what was the impact on your sales? How countermeasures have you implemented to mitigate the impact? What measures have been taken to reduce such a negative impact? Thank you. Hello, I'm Zhang Nangeng from the company.
spk05: The first quarter of 2022 is not over yet. The price of coins is still fluctuating. So we can only provide some relatively positive observations. Previously, when the price of Bitcoin fell sharply, So we are still in the first quarter of 2022, and the price of Bitcoin is still fluctuating.
spk07: As such, we can only share our observations for a macro perspective. Previously, when the price of Bitcoin fell sharply, customers' demand for our mining machines would decline. They would generally have a wait-and-see attitude, resulting in a decline in sales. Historically, the first quarter is also traditionally the off-season. And production and sales are usually lower due to the holidays, including Christmas, New Year, and the Chinese New Year.
spk05: However, there are other factors at play during the first quarter of this year.
spk07: This primarily includes the continuing industry-wide supply shortage of chips and mining machines caused by miners' growing deployment of mining machines last year. As clients tend to be highly institutionalized, and institutional clients hold a long-term horizon in terms of financing and investment activities. Therefore, the price fluctuation of Bitcoin during this period have had little impact on our sales price and sales volume. Our guidance for the first quarter of 2022 reflects our focus of performance.
spk05: Meanwhile, we are mitigating the negative impact of the 6.5% decline.
spk07: through a variety of measures. First, we are actively expanding new channels to reach new clients. Second, we leverage future contracts to reduce inventory pressures, as evidenced by the stable future contract relationship that we have with a number of large mining companies. Finally, if the Bitcoin price continues to fall, and depending on the changes in market conditions, We will also adjust the allocation of machines between inventory and mining deployment to balance long-term and short-term revenues.
spk02: Thank you. Our next question comes from Louis Fan with Benchmark Company. Your line is open.
spk04: Hi, thanks for taking my call. Congratulations on a very strong quarter. My first question for the management is, could you please elaborate on your progress and plan on your computing power deployment for the mining business? Hello? Hello, can you hear me?
spk07: Hey, Lu, can you please translate your question into English?
spk04: Okay, sure, sure, sure. Sure, no problem. Okay.
spk05: As of December 31st, 2021,
spk07: we had 1.126 million terahash of mining computing power under deployment. As of February 28, 2022, this has risen to 2.38 million terahash of mining computing power under deployment. We are currently in the process of deploying more computing power and negotiating potential for a mining project. In the future, we still continue to increase the deployment of computing power to our mining business, but we do not consider rapidly increasing our computing power as a priority. We will adjust the deployment pace to balance allocation between future sales, spot sales, and mining computing power. In this way, we strive to obtain maximum value and avoid potential risks. In addition, all machines deployed in our mining businesses can also be reallocated to spot sales if necessary.
spk04: Okay, thank you. Thank you for the color. I do have a couple of follow-up questions, and I will go ahead and ask the question in English first, then I will translate them into Chinese myself. My second question in terms of computing power deployment is, in the management's opinion, what is the company's moat against competition?
spk05: In fact, in recent years, the competitive pattern of this industry has been relatively stable compared to the booming blockchain industry. This is not without reason. Recently, some very large companies have begun to enter this industry, and have even declared that they have been deployed for many years. However, from the current product analysis, These new competitors may still need to improve their product power in order to have a real competitive advantage in the market. In the chip industry, in the area of cryptocurrency mining and chip division, our technology team has accumulated a lot of core technologies, patents, and know-how over the years. These factors together have pushed our products to the current level.
spk07: When compared to the more vibrant blockchain industry, our industry's competitive landscape has indeed become more stable in recent years. There's a reason for that. Recently, some very large companies have started to enter the industry after years of planning and preparation. However, based on our analysis of their products so far, they still need substantial improvement in order to be competitive in the market, in niche markets of the industry, such as the Bitcoin mining chip. Our team has accumulated extensive technology, patents, and a great deal of know-how over many years. By leveraging this strength, we have developed our products to an industry-leading level, thereby forming the company's technological mode.
spk05: In addition, our supply chain has been consolidated and optimized in the past few years. We use technology to develop the multi-factory strategy, which helps us to establish cooperation with a number of high-tech multi-factory companies, and to fight for advanced production capacity. In addition, we continuously solidify and optimize our supply chain,
spk07: over the past few years of operation. Our multi-Foundry partnership strategy, powered by our strong technology and R&D capabilities, has enabled us to build cooperation with several competitive Foundry partners. These partnerships allowed us to secure production capacity with advanced nodes. Our effective cash management also allows us to lock in capacities through advance payments in a timely manner. In addition, our Bitcoin mining business launched in 2021 will also help us navigate the supply chain risk in the future.
spk05: As we strive to expand our business globally,
spk07: our customers and partners have become more diversified and institutionalized. As such, our collaboration model has developed from mining machine sales to joint mining, creating a deeper win-win proposition. You can also see that some of our large-scale institutional mining enterprise customers continue to repurchase from us. forming long-term and stable relationships. At the same time, we are constantly exploring new geographic markets and establishing cooperation with new customers.
spk05: Our business model is a core technology that uses chip design to carry out mining sales, Bitcoin mining operations, and AI chip sales. Our business has a mutual relationship.
spk07: So in essence, our business model with chip design as the core technology is selling many mining machines operating in Bitcoin mining business and selling AI chips. Our businesses complement one another and combined with our underlying technology that form a continuously self-reinforcing business model.
spk05: In the past nine years, we have accumulated from the upstream supply chain to the downstream market a lot of operating experience and ability to make flexible operations adjustments to deal with market and price changes.
spk07: In addition, we accumulated extensive operational experience and capabilities from the upstream supply chain to the downstream market as we operated through cycles of significant Bitcoin price volatility during the past nine years. We are able to respond to changes in the market and Bitcoin prices with flexible and swift operational adjustments, strategically mitigate risks and seize opportunities.
spk05: Last but not least, as a U.S. listed company,
spk07: We are more transparent and compliant in terms of company operations, governance, and disclosure. At the same time, we also have access to more financing options and opportunities.
spk05: So in the above few aspects, we have formed a relatively立体的互承合. Thank you.
spk07: So to answer your question, these factors form our multi-layered competitive mode. Hope I answered your question.
spk04: Thanks. That's very helpful. Thank you. Just a couple more quick follow-up questions. First of all, could you please share some color on Cleaner's market share? 公司目前的市场价有六十多少啊?
spk05: This question, we actually have a general calculation method before, that is, based on our export volume and the growth of this whole network algorithm, to roughly calculate our market rate. But last year, the fluctuation of this whole network algorithm was very intense, so it brought some difficulties to us to estimate the actual market scale. Because some miners are frequently going down the line, moving and then going up the line, including the damage caused by the adjustment of the policy, resulting in the downfall of the profit, and so on. So there are some figures that can be used as reference. In 2020, our total sales profit was 6.6 EXA hash, and in 2021, it was 22.3 EXA hash. In 2020, the sales volume was about 4 billion yuan, and in 2021, it reached nearly 50 billion yuan. Okay, let me translate. Previously, we generally estimated our market share according to our computing power source.
spk07: and the delta of network hash rate in the corresponding period. However, in 2021, the severe fluctuation of the network hash rate made it difficult to estimate the market scale. Specifically, mining machines went offline, transited their physical locations, and connected online back and forth due to regulatory reasons. Nevertheless, in 2021, we achieved 22.3 hash in total computing power sold, compared with 6.6 hash in 2020. In 2021, our total revenues reached nearly RMB 5,000 million, compared with RMB $400 million in 2020. Therefore, we believe we gained some market share in 2010. Hopefully, we can have guidance from professional market research institutions for the specific figures. I hope I answered your question.
spk04: Okay, that's helpful. Thank you. Just one last question. I know the management has just talked about share repurchase plans. Does the management have any stock dividend program or plan in mind? I'll translate that into Chinese. I heard that the management said that they talked about buying back the stock. From the management's perspective, do you have any plans to split the stock? Thank you. First of all,
spk05: The board recognizes the company's performance and execution in the last stage of the stock repurchase plan. The repurchase plan that we announced in the last stage has also been completed in advance. In fact, I think the repurchase plan shows the long-term confidence of the board and management for the company. In the near future, we will submit a new stage of the stock repurchase plan to the board. This will be disclosed to the investors after the board is approved.
spk07: The board recognized our execution in the latest share repurchase program. The early completion of our share buyback plan demonstrates the long-term confidence of both the board and our management team. We are evaluating the situation and will submit a new stock repurchase proposal to the board accordingly. We will make formal announcements once the proposal is approved.
spk05: I think 2021 is a year of high-speed growth. But this is actually not enough for me. I think we now hope that the next company can continue to accelerate growth. This growth needs more research and investment and business expansion. We also need to develop more businesses and provide better services to our customers. I think we should still ask our customers and shareholders
spk07: The year 2021 saw our rapid growth, and we will forge ahead further. We look forward to continued and expected growth through our best endeavor. To fulfill this goal, we need to invest more into our R&D, further enhance our market development, expand our business, and optimize our services. We are committed to generating more for our clients and the shareholders, driving meat to long-term value. I hope I answered your question.
spk04: Yes. Thank you very much. We appreciate it. Again, congratulations on the strong quarter. Thank you.
spk02: Thank you, and that's all the time we have for questions. I'd like to turn the call back over to management for closing remarks.
spk07: Thank you once again for joining us today. If you have further questions, please feel free to reach us through the contact information provided on our website. Thank you.
spk02: Thank you. That concludes the call today. Thank you everyone for attending. You may now disconnect.

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