This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk06: Ladies and gentlemen, thank you for standing by. Welcome to NanoLabs first half of 2024 earnings conference call. During today's call, all participants will be in a listen only mode. This conference is being recorded today, Wednesday, September 18, 2024. Joining us today from NanoLabs are the company's chairman and chief executive officer, Mr. Jianping Kong, and the company's chief financial officer, Mr. Bing Chen. On our call today, Mr. Kong will give you an overview of the company's performance. Mr. Chen will share the details of the company's financial results. After that, we will conduct a question and answer session to take your questions. Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and as defined in the US Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the Securities and Exchange Commission. During today's call, Mr. Kong and Mr. Chen will deliver their remarks in Chinese, and the company's representative will provide corresponding English translations. With that, I will now turn the call over to Mr. Kong, the company's Chairman and Chief Executive Officer. Mr. Kong, please go ahead.
spk04: Thank you, operator and everyone for joining NanoLabs, first half of 2024, a news conference call today. On our call today, I will provide an overview of our recent development and our strategic initiative in the future. The first half of 2024 has come to an end. We have clearly witnessed a recovery in the industry and the continuous emergence of new market opportunities. Amidst this existing broad market environment, our company has been making substantial investments in the research and development of our upgraded QQ series products. In May 2024, we successfully conversed the mass production of QQ3 chips, which featured significantly enhanced performance compared to the QQ2 chip, setting a new global benchmark. This keeps development positions to capitalize on new market opportunities progressively. Moreover, our company plans to launch a range of models equipped with the QQ3 chips for various application scenarios in the remainder of this year and the first half of next year, which is expected to drive significant growth in ourselves.
spk03: In the future, we will continue to work hard to achieve better results.
spk04: Furthermore, we are continuously innovating in packaging technology and IP to improve the efficiency of chip production. The development of promising AI computing, BK computing and other chips is also on the way. Concurrently, our iSolo Metaverse food graphic studio service a component of our Metaverse business suite is making consistent progress. We have established profound collaborations with various institutions and organizations, which laid the groundwork for substantial growth potential in the future. We anticipate that to the combined persistence and efforts of the industry and ourselves, we will overcome existing bottlenecks and unlock new heights of success in the future. Thank you for your support and trust. Next, I will turn the call over to our Shelf Financial Optimization for a closer review of our financial results. Mr. Chen, please go ahead.
spk09: Thank you, Ms. Cohn. Good morning, everyone. On behalf of the management team, I will provide a brief financial overview of the first half of 2024. In the first half of 2024, our net worth was RMB 24.74 million, $3.47 million, compared to RMB 52.27 million in the same period last year. This decline was primarily due to the decreased sale of the Apollo V1 series products. However, revenues from our 3D printing products showed significant growth, increasing to RMB 459,200 from RMB 22,000. Cost of revenues for the first half of fiscal year 2024, for RMB 24.71 million, $3.47 million, compared to RMB 115.2 million in the same period of 2023. The decline was mainly due to the decreased sales volume and the next inventory write-down recorded.
spk01: For the first half of 2024, our net worth was RMB 8.24 million, $7.35 million in the same period of 2023. The sales volume for the first half of fiscal year 2024, for the same period of 2023, was RMB 9.50 million, which was a decline of 54.4%. This means that RMB 4.33 million, or $60.8 million, was mainly due to the decreased sales volume and the next inventory write-down recorded.
spk09: Social operating expenses for the first half of fiscal year 2024 decreased by .1% to RMB 58.72 million, $8.24 million, down from RMB 73.15 million, in the same period of 2023. Sales and marketing expenses dropped by .4% to RMB 4.33 million, $0.61 million, compared to RMB 9.15 million, in the same period of 2023. This decrease was mainly due to reduced sales commission and productive shipping expenses.
spk01: The decrease in management costs was mainly due to the decrease in the increase in the number of employees and employees in the general and administrative expenses, and the decrease in the number of general and administrative expenses, which led to the decrease in the employees' wages.
spk09: General and administrative expenses decreased by 18% to RMB 25.45 million, $3.57 million for the first half of 2024. From RMB 31.04 million for the same period of 2023, the decrease in general and administrative expenses was primarily due to the decrease in office list expenses, meaning attributable to the relocation of the head office, and the decrease in employee salary expenses as the number and salaries of general and administrative staff decreased. Research and development expenses decrease. increased by .2% to RMB 28.93 million, year's dollar 4.06 million for the first half of 2024. From RMB 32.95 million for the same period of 2023, the decrease in research and development expenses was primarily due to the decrease in salary expenses.
spk01: The same period of 2023 was a loss of RMB 1.33 billion. The same period of 2024 was a loss of RMB 0.85 or 0.12 billion. The same period of 2023 was a loss of RMB 2.41 billion. From RMB 33.5 million to RMB 33.5 million for the same period of 2023, the decrease in salary expenses was primarily due to the decrease in salary expenses. The same period of 2023 was a loss of RMB 4.816 million.
spk09: Loss from operations was RMB 58.69 million, year's dollar 8.24 million for the first half of 2024. Compared with loss from operations of RMB 136.4 million for the same period of 2023, net loss was RMB 69.50 million, year's dollar 8.30 million for the first half of 2024. Compared to net loss of RMB 134.3 million in the same period of 2023, basic and relative loss per share was RMB 0.85, year's dollar 0.12 for the first half of 2024. Compared to basic and relative loss per share of RMB 2.41 in the same period of 2023. As of June 30, 2024, the company had cash and cash equivalents of RMB 23.51 million, year's dollar 3.3 million compared with RMB 48.60 million as of December 31, 2023. We remain confident in our business strategy and ability to execute it. We will continue to leverage the strength of our technology to make the most of the opportunity. We will continue to leverage the strength of our technology to capture development opportunities, drive long-term growth and create additional value for our shareholders. Now I would like to turn the call over to the operator for questions and answers session.
spk06: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the phone and use the handset to ask your question. Your first question comes from Oscar Tracy, private investor. Please go ahead.
spk05: Thank you for your introduction. So I'm just wondering, could you provide some more details about your new iterator products? Thank you.
spk04: Could you please give us some more details about your new iterator products?
spk03: Our new product, Kuku 3.0, is an iterator product of Kuku 2.0. The performance of Kuku 2.0 is significantly improved compared to other products. It has a global leading level. It has different types of devices with different number of different types of devices. Not only can it be used in data center environments, but also in data center environments. It can also be used in home or consumer environments.
spk04: Our company's newly launched Kuku 3.0 chip is an upgraded iteration of the original Kuku 2.0. It has significantly improved performance. The Kuku 3.0 has reached a leading position globally. Machines equipped with varying quantities of these chips can be used not only in data center environments, but also independently in home or consumer settings, offering flexibility for various user scenarios.
spk06: Your next question comes from Irana Rabno, a private investor. Please go ahead.
spk08: Hi, thank you. What are the company's expectations for the market and financial figures in the second half of this year? Mr. Chen,
spk09: I would like to ask about the company's future plans for the next half year's market and financial numbers.
spk01: Because the company expects to launch the Kuku 3.0 chip in the next half year, the sales of new products are also progressing, and sales will also increase.
spk09: Our company plans to launch our complete machine equipped with Kuku 3.0 chip in the second half of the year, which is expected to drive an increase in sales of new series products. Additionally, we are gradually introducing new product lines to the market, and we anticipate the sales volume to go over time.
spk06: Your next question comes from Clara Watten, a private investor. Please go ahead. Okay, thank you.
spk07: I have a question. What kind of compactivity advantage of the recent launch of Kuku 3.0? Does it have relevance to the recent air trends? Thank you.
spk04: I would like to ask, what kind of compactivity advantage of the recent launch of Kuku 3.0? Does it have anything in common with the recent popular AI?
spk03: In the current products, Kuku 3.0 single chip has the highest power, the lowest P1, and the company has developed multiple models for user choices for different application scenarios. The 3D Delimes designed a dedicated distributed-piped network for AI Kuku 3.0, which is one of the key technologies in AI chip. In addition, Kuku 3.0 has a dedicated low-pressure circuit designed for low power, and a set of corresponding time sign-off processes can also create a competitive advantage for AI chip design.
spk04: The Kuku 3.0 chip offers the highest computing power and the lowest power efficiency among our current products. Our company has developed multiple models to capture two different application scenarios. Regarding AI, the Kuku 3.0 features a high bandwidth multi-channel 3D Dram with a dedicated distributed on-chip network to enable efficient data exchange between computing and storage units, which is a key technology in AI chips. Additionally, the chip specializes in low-voltage circuits designed to reduce power consumption, allowing with corresponding time sign-off processes to provide a comparative advantage for AI chip design.
spk06: The next question comes from Armstrong Wu, private investor. Please go ahead.
spk02: Hi, thank you. My question is, will the company introduce any new product lines that could support its business revenue in the future? Thank you.
spk04: I would like to ask, will the company introduce any new product lines that could support its business revenue in the future?
spk03: As I mentioned, the company will launch the Kuku 3.0 chip in the second half of this year and the second half of next year. This will have a significant promotion for our sales. Our photo service will also help the company's overall business revenue. We are also looking for new opportunities for AI computing to create new revenue for the company.
spk04: As mentioned before, our company plans to launch complete machines equipped with Kuku 3.0 chips in the second half of this year and the first half of next year, which is expected to significantly boost sales. Additionally, our photo studio services will contribute to the company's overall revenue. We are also exploring new opportunities in those, such as AI computing to drive our future revenue growth.
spk06: And that concludes the question and answer session. Let me turn the call over to Mr. Chen for closing remarks.
spk01: Thank you very much for attending this call. If you have any questions, please contact us via e-mail. Or you can contact us via the e-mail at .nano.cn or visit our AI consultant center. You can email us at .ar.com. The management will respond to your questions as soon as possible. We thank you for your interest and support in NanoLabs. We look forward to hearing from you again next time.
spk09: Thank you again for attending NanoLabs. First, let me turn the call over to you, Mr. Chen, for closing remarks. Thank you for attending this call. If you have any questions, please contact us via e-mail. Or you can email us via the e-mail at .ar.com. The management will respond to your questions as soon as possible. We appreciate your interest and support in NanoLabs. And we look forward to speaking with you again next time.
spk06: Thank you again for attending NanoLabs. First half of 2024 earnings conference call. This concludes our call today and we thank you all for listening in. Goodbye.
Disclaimer