Nano Labs Ltd

conference call. During today's call, all participants will be in listen-only mode. This conference is being recorded today, Tuesday, March 25, 2025. Joining us today from NanoLabs are the company's chairman and chief executive officer, Mr. Jinping Hong, and the company's chief financial officer, Mr. Bing Chen. On our call today, Mr. Hong 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 of the 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 U.S. 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 and uncertainties or other factors is included in the company's filing with the Securities and Exchange Commission. During today's call, Mr. Kung 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. Kung, the company's chairman and chief executive officer. Mr. Kung, please go ahead.

感谢主持人和所有今天参加Nano Labs 2020年下半年财报电话会议的朋友。 Thank you, operator, and everyone for joining NanoLab's second half of 2024, a new conference call today.

On our call today, I will provide an overview of our recent development and our strategic initiatives in the future.

In 2020, the company continued to expand its business, and there were many opportunities. The demand for digital currency transactions and encrypted currencies in the school market continued to rise. We officially invested in Bitcoin as a new business version, and Bitcoin as the main reserve asset. As of this time, on the day of the press conference, the company holds about 400 bitcoins, and the total purchase price is about 40 million dollars.

The year 2024 represents numerous opportunities as the company continues to expand its business. As demand for digital currency transactions and cryptocurrency adoption continue to rise, we have officially established a Bitcoin value investment as a new business sector and designated Bitcoin as our primary reserve asset. As of the date of this earning comfort score, the company holds about 400 BTC with a total purchase price of around $40 million.

In addition, in November 2020, we released the entire Payback Google 3.0 port. to strengthen performance and reach the world's leading standards. This significant improvement has allowed us to further expand the market. The key competitive advantage is to accelerate the development of the AI field. We plan to develop AI-related applications in the Web3.0 ecosystem, focusing on AI and Web3.0 infrastructure integration. Through rich and advanced strategic planning and continuous implementation, we are as determined as ever to

Additionally, in December 2024, we launched an upgraded complete machine equipped with the QQ3 innovation chip, which delivers enhanced performance that meets all leading standards. These significant improvements provide us with key competitive advantages to further expand our market share. With the rapid evolution of AI, we plan to develop AI applications with the Web3 ecosystem, focusing on integration of AI and Web3 technologies. Through visionary and insightful strategic planning and consistent execution, we remain committed to deepening our expertise in the Web3 space. We believe these efforts will create substantial value and drive strong results for our stakeholders.

Thank you for your support and trust.

Next, I will turn the call over to our chief financial officer, Mr. Chen, for a closer review of our financial results. Mr. Chen, please go ahead.

Thank you, Mr. Kong Jianping. Good morning, everyone. On behalf of the management team, I would like to introduce the financial situation in the second half of 2020. In the second half of 2020, the company's operating income per capita was 1586,000 yuan, or $221,000. Last year, the operating income per capita was 2676,000 yuan. The decline in operating income was mainly due to 2020年下半财年,公司的营收成本为人民币428万元或60美元,2020年同期人民币为6662万元, Thank you, Mr. Kong.

Good morning, everyone. On behalf of the management team, I will provide a brief financial overview of the second half of 2024. In the second half of 2024, our net revenue was RMB 15.86 million, U.S. dollar 2.21 million. compared to RMB 26.07 million in the same period last year. This decline was primarily due to decreased sales volume of the Apollo V series products. However, we recorded a gross profit of RMB 11.57 million, US dollar 1.61 million for the second half of 2024, compared to a gross loss of RMB 40.55 million in the same period of Cost of revenue for the second half of fiscal year 2024 were RMB 4.28 million, U.S. dollar 0.6 million, compared to RMB 66.62 million in the same period of 2023. The decline was mainly due to the decrease in sales volume and less inventory write-down recorded.

In 2024, the total revenue of the second half of the year fell by 38.7% to RMB 5,139,000 or 715,000. In 2023, the same period was RMB 8,384,000. In 2024, the company's sales fee fell by 17.7% to RMB 583,000 in the same period of 2023.

total operating expenses for the second half of fiscal year 2024 decreased by 38.7% to RMB 51.39 million, U.S. dollar 7.15 million. down from RMB 83.84 million in the same period of 2023. Selling and marketing expenses dropped by 17.7% to RMB 4.8 million, US dollar 0.67 million compared to RMB 5.83 million in the same period of 2023. This decrease was mainly due to the decrease in employee salary expenses.

In the second half of 2020, the management cost of RMB 22.36 million in the same period of 2023 increased by 13.5% to RMB 25.38 million or $353 million. The increase in management cost is mainly due to the increase in treatment cost.

General and administrative expenses increased by 30.5% to RMB 25.38 million, US dollar 3.83 million for the second half of 2024, from RMB 22.38 million for the same period of 2023. The decrease in general and administrative expenses was primarily due to the increase in depreciation expenses.

Research and development expenses decreased by 61.9% to RMB 28.9%.

U.S. dollar $4.06 million for the second half of 2024, from RMB $32.97 million for the same period of 2023. The decrease in research and development expenses was primarily due to the decrease in salary expenses, material fees, and equipment fees.

2020 is the second half of 2020. The net profit per capita is RMB3,982,554. In 2023, the net profit per capita is RMB1.2 billion. In 2020, the net profit per capita is RMB6,039,840. In 2023, the net profit per capita is RMB1.2 billion. In 2020, the net profit per capita is RMB6,039,840. $6.01 or $0.84. In 2023, the same period, the average and the rest of the stocks were lost for $19.12. As of December 31, 2020, the company's cash and cash payments were $3,243 or $451 million. As of December 31, 2023,

该数字为人民币4816万元。 Loss from operations was RMB 39.82 million, US dollar 5.54 million for the second half of 2024, compared with loss from operations of RMB 124.4 million for the same period of 2023. Net loss was RMB 60.39 million, US dollar 8.4 million for the second half of 2024, compared to a net loss of RMB 120 million in the same period of 2023. Basic and diluted loss per share was RMB 6.01, US dollar 0.84 for the second half of 2024, compared to basic and diluted loss per share of RMB 19.12 in the same period of 2023. As of December 31, 2024, the company had cash and cash equivalents of RMB 32.43 million, US dollar 4.51 million, compared with RMB 48.16 million as of December 31, 2023.

我们坚信我们未来业务发展的战略和执行能力 我们将继续发挥我们的技术优势 抓住发展机遇 推动公司的长期增长 并为股东创造更多的价值 现在我将电话交给主持人来进行问答环节 We remain confident in our business strategy and ability to execute it

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.

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 handset to ask your question. Your first question comes from Claire Harrison, a private investor.

Hi, thank you, Mr. Kong and Mr. Chen. So why is the company considered increasing its holdings of Bitcoin? Thank you.

I would like to ask why the company is considering continuing to hold Bitcoin.

We believe that Bitcoin is a long-term strategic asset. It is related to the entire Swap3 industry. In addition, because the overall quantity is limited, so Bitcoin is likely to have a greater reach in the long term. What is more important is the basic facilities and opportunities provided by the development of Bitcoin Swap3. At present, many countries have clearly pointed out that Bitcoin will be a national strategic asset. Therefore, we also recognize its value.

We believe Bitcoin is a strategic asset with long-term value for reserves and plays a crucial role in the Web3 ecosystem. Additionally, its limited supply makes it a potential against inflation with significant room for appreciation over time. More importantly, Bitcoin can serve as foundational infrastructure creating opportunities for Web3 development. Furthermore, many countries have officially recognized Bitcoin as a national strategic reserve asset, reinforcing our confidence in its long-term value and potential.

Your next question comes from Alfred Wu, a private investor.

Hello, my question is what considerations have driven the company's recent financing activities?

Thank you. 想问一下公司近期进行融资的考虑是什么呢?

因为公司近期进行了一些业务方向上的拓展, 增加了比特币价值投资板块。

Our recent financing activities were driven by business adjustments and expansion initiatives, particularly our increased investment in Bitcoin as a strategic asset. During discussions with strategic investors, we found that strong alignment between their industry outlook and our long-term vision. Recognizing this synergy, we see the opportunity to introduce these investors at the right time and successfully secure financing.

Your next question comes from Stephanie Bell, a private investor.

My question is, what is the company's plan for future development? Thank you.

公司在未来发展上的计划是怎么样的?

以往公司的业务主要专注于芯片技术 并延伸到元宇宙和计算和应用生态 在未来我们认为整个生态领域充满了机会 我们将会不断挖掘

Our business has primarily focused on cheap technology expanding into metaverse computing and ecological applications. Looking ahead, we see immense opportunities within the broader metaverse ecosystem and will continue exploring emerging market opportunities. We will start from the design of cryptocurrency IC chiefs, and we will be committed to the development of AI fast web 3 in the future.

Your next question comes from Eva Hoffman, a private investor.

Thank you, management team. My question is, the company's income is not significant at present. Do you have any expectation for the future? Thank you.

Can you see that the current income is not high, is there any expectation for the future?

Currently, the current mobile machine with Boogoo 3.0 is in the process of delivery. There will be a certain business deadline this year. The company's overall current expectation is to make the product and operation well and wait for the market opportunity to explode.

Our Google 3 equipped machines are being steadily shipped and their impact will be reflected to some extent in this year's business performance. Our current focus is on optimizing product management and operations while staying prepared to seize emerging market opportunities as they arise. And that concludes the question and answer season. Let me turn the call over to Mr. Chen for closing remarks.

Thank you very much for joining this conference call.

If you have any questions, please contact us through e-mail at ir at nano.com, or reach our IR Council Essence Investor Relations at tnet.co at essenceir.com. Management will respond to your question as soon as possible. We appreciate your interest and support in NanoLabs and look forward to speaking with you again next time.

Thank you again for attending NanoLab's second half of 2024 Earnings Conference Call. This concludes our call for today, and we thank you all for listening in. Goodbye.