BEIJING, Sept. 15, 2021 /PRNewswire/ -- Canaan Inc.
(NASDAQ: CAN) ("Canaan" or the "Company"), a leading
high-performance computing solutions provider, today announced its
unaudited financial results for the second quarter ended
June 30, 2021 and the Change of Board
Composition.
Second Quarter 2021 Operating and Financial
Highlights
Total computing power sold was 5.9 million Thash/s, up
126.9% from 2.6 million Thash/s in the same period of 2020 and up
200.0% from 2.0 million Thash/s in the first quarter of 2021,
setting a new high mark. The robust year-over-year and sequential
increases were mainly due to the increase in the number of Bitcoin
mining machines being delivered driven by strong market demand.
As of June 30, 2021, the Company
had cash and cash equivalents of RMB1,220.2 million (US$189.0 million), up 211.8% compared to
RMB391.3 million as of December 31, 2020, primarily due to a larger
number of down payments received by the Company as a result of the
larger volume of sales orders of Bitcoin mining machines, as well
as the net proceeds from the Company's registered
direct offering in May 2021.
Total net revenues were RMB1,081.8
million (US$167.5 million),
marking the strongest quarterly sales in the Company's operating
history, up 507.3% from RMB178.1
million in the same period of 2020, and up 168.6% from
RMB402.8 million in the first quarter
of 2021.
Gross profit was RMB427.1
million (US$66.2 million), up
887.0% from RMB43.3 million in the
same period of 2020, and up 119.9% from RMB194.2 million in the first quarter of
2021.
Net income was RMB245.0
million (US$37.9 million),
marking the highest quarterly net profit since the Company's
initial public offering in 2019 (the "IPO"), compared to a net loss
of RMB16.8 million in the same period
of 2020 and a net income of RMB1.2
million in the first quarter of 2021.
Non-GAAP adjusted net income was RMB320.1 million (US$49.6
million), again signifying a new high mark since the
Company's IPO, compared to a non-GAAP adjusted net loss of
RMB16.0 million in the same period of
2020 and a non-GAAP adjusted net income of RMB143.2 million in the first quarter of 2021.
Mr. Nangeng Zhang, Chairman and Chief Executive Officer of
Canaan, commented, "We delivered a remarkable performance in the
second quarter of 2021. Despite unexpected regulatory policy
dynamics and Bitcoin price volatility, we achieved record-high
topline results as we delivered a robust 5.9 million Thash/s of
computing power to our clients. During the second quarter and
recently, we also secured substantial preorders, thanks to the
effective execution of our strategies, including business
development in the overseas markets, institutional client
relationship building, and strengthening our supply chain.
Regarding our self-operated Bitcoin mining program, we plan to
continue to deploy computing power to grasp the tremendous
opportunities of Bitcoin mining. We also made encouraging strides
in the AI business by launching our self-developed edge AI chip,
Kendryte K510, and garnered demand from multiple outstanding
clients in the technology field. Looking ahead, while we endeavor
to gain greater market share in our Bitcoin mining machine
business, we will continue our research and development efforts to
further advance our underlying ASIC and edge computing
technologies, propelling forward our growth prospects."
Mr. James Cheng, Chief Financial
Officer of Canaan, stated, "We reported solid financial results for
the quarter. Besides the record-setting revenue of RMB1.08 billion and a non-GAAP net profit of
RMB320.1 million, our vigorous book
of preorders, primarily from overseas clients, have brought
abundant prepayments, which further enhanced our cash position.
This enabled us to secure future wafer supply, grow our research
and development team, and carry out strategic investments.
Currently, we are fully aware of the industry-wide challenges, such
as Bitcoin price fluctuation, wafer supply instability, regulatory
uncertainties in different countries. Nevertheless, we remain
confident in our effective growth strategies, technologically
advanced products, solid operating capabilities, as well as the
enormous potential of the industry."
Second Quarter 2021 Financial Results
Total net revenues in the second quarter of 2021
increased by 507.3% to RMB1,081.8
million (US$167.5 million)
from RMB178.1 million in the
same period of 2020, and up 168.6% compared to RMB402.8 million in the first quarter of 2021.
The year-over-year and quarter-over-quarter increases were mainly
due to the substantial increase in total computing power sold.
Cost of revenues in the second quarter of 2021
increased to RMB654.6 million
(US$101.4 million) from RMB134.8 million in the same period of 2020 and
RMB208.6 million in the first quarter
of 2021. Both the year-over-year and sequential increases in cost
of revenues were in line with the increases in the Company's Thash
sales volume and cost per Thash.
Gross profit in the second quarter of 2021 was
RMB427.1 million (US$66.2 million), up 887.0% from RMB43.3 million in the same period of 2020
and up 119.9% from RMB194.2 million
in the first quarter of 2021.
Total operating expenses in the second quarter of
2021 were RMB261.6 million
(US$40.5 million), compared to
RMB62.2 million in the same period of
2020 and RMB207.9 million in the
first quarter of 2021, as the Company enhanced its investment in
research and development efforts and sales bonus spending during
the quarter.
Research and development expenses in the second quarter of 2021
were RMB64.0 million (US$9.9 million), representing an increase of
145.4% from RMB26.1 million in the
same period of 2020 and an increase of 10.0% from RMB58.2 million in the first quarter of 2021. The
increase was primarily attributable to the increased headcounts in
technology related departments. Research and development expenses
in the second quarter of 2021 also included share-based
compensation expenses of RMB23.7
million (US$3.7 million).
Sales and marketing expenses in the second quarter of 2021 were
RMB25.8 million (US$4.0 million), compared to RMB6.5 million in the same period of 2020 and
RMB6.3 million in the first quarter
of 2021. The increase was mainly attributable to the increased
sales bonus for the outstanding sale performance in the quarter.
Sales and marketing expenses in the second quarter of 2021 also
included share-based compensation expenses of RMB1.8 million (US$0.3
million).
General and administrative expenses in the second quarter of
2021 were RMB171.9 million
(US$26.6 million), compared to
RMB29.6 million in the same period of
2020 and RMB143.4 million in the
first quarter of 2021. The increase was mainly due to the staff
cost and the rental costs for new offices expansion. General and
administrative expenses in the second quarter of 2021 also included
share-based compensation expenses of RMB126.5 million (US$19.6
million).
Income from operations in the second quarter of 2021
was RMB165.5 million (US$25.6 million), compared to a loss from
operations of RMB18.9 million in the
same period of 2020 and a loss from operations of RMB13.7 million in the first quarter of 2021.
Change in fair value of warrant liability in the second
quarter of 2021 was a gain of RMB77.7
million (US$12.0 million),
compared to nil in the same period of 2020 and nil in the first
quarter of 2021, due to the fair value change in warrants issued in
May 2021.
Net income attributable to ordinary shareholders in
the second quarter of 2021 reached a new high since the Company's
IPO to RMB245.0 million (US$37.9 million), compared to a net loss of
RMB16.8 million in the same period of
2020 and a net income of RMB1.2
million in the first quarter of 2021.
Non-GAAP adjusted net income in the second quarter
of 2021 was RMB320.1 million
(US$49.6 million), compared to a
non-GAAP adjusted net loss of RMB16.0
million in the same period of 2020 and a non-GAAP adjusted
net income of RMB143.2 million in the
first quarter of 2021. Non-GAAP adjusted net (loss)/income excludes
share-based compensation expenses and change in fair value of
warrant liability. For further information, please refer to "Use of
Non-GAAP Financial Measures" in this press release.
Foreign currency translation adjustment, net of nil tax,
was a loss of RMB10.2 million
(US$1.6 million), compared with a
loss of RMB0.08 million in the same
period of 2021 and a gain of RMB2.4
million in the first quarter of 2021, due to the US dollar
depreciation against the Renminbi during the second quarter of
2021.
Basic net earnings per American depositary share
("ADS") in the second quarter of 2021 was RMB1.46 (US$0.23).
In comparison, basic net loss per ADS in the same period of 2020
was RMB0.11, while basic net earnings
per ADS in the first quarter of 2021 was RMB0.01. Each ADS represents 15 of the Company's
Class A ordinary shares.
Diluted net earnings per ADS in the second quarter
of 2021 was RMB1.40 (US$0.22). In comparison, diluted net loss per
ADS in the same period of 2020 was RMB0.11, while diluted net earnings per ADS in
the first quarter of 2021 was RMB0.01. Each ADS represents 15 of the Company's
Class A ordinary shares.
Contract liabilities as of June 30, 2021, were RMB1,040.6 million (US$161.2 million), increasing from RMB430.4 million as of December 31, 2020, mainly due to the increased
down payments for the sales orders of Bitcoin mining machines to be
delivered in the coming quarters.
As of June 30, 2021, the Company
had cash and cash equivalents of RMB1,220.2 million (US$189.0 million), up 211.8% compared to
RMB391.3 million as of December 31, 2020.
Recent Developments
The Company's Share Repurchase Update
Between September 22, 2020, and
September 12, 2021, the Company has
cumulatively deployed approximately US$9.3
million to repurchase approximately 2.51 million ADSs under
the Company's share repurchase program with a total authorized
amount of up to US$10 million.
Strategic Investment
On August 11, 2021, the Company
through its wholly-owned subsidiary, Hangzhou Canaan Creative
Information Technology Limited, entered into an agreement with
Pixelworks Semiconductor Technology (Shanghai) Co., Ltd.("PWSH"), a subsidiary of
Pixelworks, Inc. (NASDAQ: PXLW) ("Pixelworks") to invest
approximately US$3.1 million in cash
in exchange for an equity interest in PWSH (the "Investment"),
subject to certain closing conditions. PWSH designs, manufactures
and sales visual display processing semiconductors and custom
application specific integrated circuits solutions for video
applications, advanced media processing, and the efficient delivery
and streaming of video in the target markets of smartphones,
tablets, digital projection systems, high-quality video
infrastructure equipment, and over-the-air streaming devices. This
investment reflects the Company's strategy of further expanding
Canaan's compelling computing power beyond cryptocurrency mining to
AI solutions.
Change of Board Composition
Mr. Jiaxuan Li, a director of the
Company, has stepped down from the board of directors of the
Company for personal reasons, effective September 15, 2021.
Mr. Jiaxuan Li has served as a
director of the Company since December
2015. Mr. Nangeng Zhang, Chairman and Chief Executive
Officer of Canaan, commented, "On behalf of the board of directors,
I would like to express our sincerest gratitude to Mr. Jiaxuan Li, for his outstanding contributions to
the Company over the past years. We wish him success in his future
endeavors."
Business Outlook
For the third quarter of 2021, the Company expects total
revenues to have a sequential increase of 10% to 30%. This forecast
reflects the Company's current and preliminary views on the market
and operational conditions, which are subject to change.
Conference Call Information
The Company's management team will hold a Direct Event
conference call on Wednesday, September 15,
2021, at 8:00 A.M. Eastern
Time (or 8:00 P.M. Beijing
Time on the same day) to discuss the financial results. Details for
the conference call are as follows:
Event
Title:
Canaan Inc. Second Quarter 2021 Earnings Conference Call
Registration Link:
http://apac.directeventreg.com/registration/event/6764915
All participants must use the link provided above to complete
the online registration process in advance of the conference call.
Upon registering, each participant will receive a set of
participant dial-in numbers, the Direct Event passcode, and a
unique access PIN, which can be used to join the conference
call.
A replay of the conference call will be accessible through
September 22, 2021, by dialing the
following numbers:
International:
+61-2-8199-0299
United
States: +1-646-254-3697
Hong Kong, China:
+852-3051-2780
Replay
PIN: 6764915
A live and archived webcast of the conference call will also be
available at the Company's investor relations website at
investor.canaan-creative.com.
About Canaan Inc.
Established in 2013, Canaan (NASDAQ: CAN), is a technology
company focusing on ASIC high-performance computing chip design,
chip research and development, computing equipment production, and
software services. The company's vision is "super computing is what
we do, social enrichment is why we do." Canaan has a rich
experience in chip design and streamlined production in the ASIC
field. In 2013, it released and mass produced its first ASIC
Bitcoin mining machine. In 2018, Canaan released the world's first
7nm ASIC chip, providing energy efficient computing equipment to
the cryptocurrency mining industry. In the same year, Canaan
released the world's first RISC-V architecture commercial edge AI
chip, further harnessing the potential of ASIC technology in the
field of high-performance computing and artificial
intelligence.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars ("US$") at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to US$ were made at the rate of RMB6.4566 to US$1.00, the noon buying rate in effect on
June 30, 2021, in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or US$ amounts referred could be
converted into US$ or RMB, as the case may be, at any particular
rate or at all.
Safe Harbor Statement
This announcement contains forward−looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward−looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as Canaan Inc.'s strategic and operational
plans, contain forward−looking statements. Canaan Inc. may also
make written or oral forward−looking statements in its periodic
reports to the U.S. Securities and Exchange Commission ("SEC") on
Forms 20−F and 6−K, in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about Canaan
Inc.'s beliefs and expectations, are forward−looking statements.
Forward−looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward−looking
statement, including but not limited to the following: the
Company's goals and strategies; the Company's future business
development, financial condition and results of operations; the
expected growth of the Bitcoin industry and the price of Bitcoin;
the Company's expectations regarding demand for and market
acceptance of its products, especially its Bitcoin mining machines;
the Company's expectations regarding maintaining and strengthening
its relationships with production partners and customers; the
Company's investment plans and strategies, fluctuations in the
Company's quarterly operating results; competition in its industry
in China; and relevant government
policies and regulations relating to the Company and
cryptocurrency. Further information regarding these and other risks
is included in the Company's filings with the SEC, including its
registration statement on Form F−1, as amended, and its annual
reports on Form 20−F. All information provided in this press
release and in the attachments is as of the date of this press
release, and Canaan Inc. does not undertake any obligation to
update any forward−looking statement, except as required under
applicable law.
Use of Non-GAAP Financial Measures
In evaluating Canaan's business, the Company uses non-GAAP
measures, such as adjusted net loss, adjusted net income, adjusted
net (loss)/income, as supplemental measures to review and assess
its operating performance. The Company defines adjusted net loss as
net loss excluding sharebased compensation expense and change in
fair value of warrant liability. The Company believes that the
non-GAAP financial measures provide useful information about the
Company's results of operations, enhance the overall understanding
of the Company's past performance and future prospects and allow
for greater visibility with respect to key metrics used by the
Company's management in its financial and operational
decision-making.
The non-GAAP financial measures are not defined under U.S. GAAP
and are not presented in accordance with U.S. GAAP. The non-GAAP
financial measures have limitations as analytical tools and
investors should not consider them in isolation, or as a substitute
for net loss, cash flows provided by operating activities or other
consolidated statements of operations and cash flows data prepared
in accordance with U.S. GAAP. One of the key limitations of using
adjusted net loss is that it does not reflect all of the items of
income and expense that affect the Company's operations.
Share-based compensation has been and may continue to be incurred
in Canaan's business and is not reflected in the presentation of
adjusted net income/loss. Further, the non-GAAP financial measures
may differ from the non-GAAP information used by other companies,
including peer companies, and therefore their comparability may be
limited. The Company mitigates these limitations by reconciling the
non-GAAP financial measures to the most comparable U.S. GAAP
performance measures, all of which should be considered when
evaluating the Company's performance.
Investor Relations Contact
Canaan Inc.
Mr. Shaoke Li
Email: IR@canaan-creative.com
ICR, LLC
Robin Yang
Tel: +1 (347) 396-3281
Email: canaan.ir@icrinc.com
CANAAN
INC.
UNAUDITED
CONSOLIDATED BALANCE SHEETS
(all amounts in
thousands of RMB, except share and per share data, or as otherwise
noted)
|
|
As of December
31,
|
As of June
30,
|
|
2020
|
2021
|
2021
|
|
RMB
|
RMB
|
US$
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
391,310
|
1,220,236
|
188,990
|
Restricted
cash
|
4,494
|
126
|
20
|
Short-term
investments
|
62,386
|
-
|
-
|
Accounts
receivable
|
7,128
|
372
|
58
|
Inventories
|
225,522
|
587,112
|
90,932
|
Prepayments and other
current assets
|
316,366
|
1,419,606
|
219,869
|
Total current
assets
|
1,007,206
|
3,227,452
|
499,869
|
Non-current
assets:
|
|
|
|
Property, equipment
and software
|
12,193
|
16,147
|
2,501
|
Right-of-use assets,
net
|
14,422
|
30,423
|
4,712
|
Other non-current
assets
|
2,530
|
3,617
|
559
|
Non-current financial
investment
|
25
|
-
|
-
|
Total non-current
assets
|
29,170
|
50,187
|
7,772
|
Total
assets
|
1,036,376
|
3,277,639
|
507,641
|
LIABILITIES, AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
debts
|
34,754
|
-
|
-
|
Accounts
payable
|
37,407
|
107,790
|
16,695
|
Notes
payable
|
13,963
|
-
|
-
|
Contract
liabilities
|
430,388
|
1,040,551
|
161,161
|
Accrued liabilities
and other current liabilities
|
63,343
|
180,189
|
27,908
|
Lease liabilities,
current
|
12,621
|
18,111
|
2,804
|
Total current
liabilities
|
592,476
|
1,346,641
|
208,568
|
Non-current
liabilities:
|
|
|
|
Lease liabilities,
non-current
|
3,322
|
12,363
|
1,915
|
Warrant
liability
|
-
|
54,736
|
8,478
|
Other non-current
liabilities
|
8,020
|
6,929
|
1,072
|
Total non-current
liabilities
|
11,342
|
74,028
|
11,465
|
Total
liabilities
|
603,818
|
1,420,669
|
220,033
|
Shareholders'
equity:
|
|
|
|
Ordinary shares
(US$0.00000005 par value;
1,000,000,000,000
shares authorized,2,372,222,222 and
2,613,169,978 shares
issued, 2,328,326,132 and
2,569,273,888 shares
outstanding as of December 31,
2020 and June 3o,
2021, respectively)
|
1
|
1
|
-
|
Subscriptions
receivable from shareholders
|
(1)
|
(1)
|
-
|
Treasury stocks
(US$0.00000005 par value; 43,896,090
shares as of December
31, 2020 and June 30, 2021)
|
(23,915)
|
(23,915)
|
(3,704)
|
Additional paid-in
capital
|
1,634,619
|
2,820,748
|
436,878
|
Statutory
reserves
|
97,307
|
97,307
|
15,071
|
Accumulated other
comprehensive loss
|
(79,780)
|
(87,664)
|
(13,577)
|
Accumulated
deficit
|
(1,195,673)
|
(949,506)
|
(147,060)
|
Total
shareholders' equity
|
432,558
|
1,856,970
|
287,608
|
Total liabilities
and shareholders' equity
|
1,036,376
|
3,277,639
|
507,641
|
|
|
|
|
|
CANAAN
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
(LOSS)/INCOME
(all amounts in
thousands of RMB, except share and per share data, or as otherwise
noted)
|
|
For the Three
Months Ended
|
|
|
June 30,
2020
|
March 31,
2021
|
June 30,
2021
|
June 30,
2021
|
|
RMB
|
RMB
|
RMB
|
US$
|
Net
revenues
|
|
|
|
|
Products
revenue
|
162,925
|
396,562
|
1,079,429
|
167,182
|
Leases
revenue
|
15,109
|
5,922
|
1,634
|
253
|
Service
revenue
|
57
|
224
|
-
|
-
|
Mining
income
|
-
|
-
|
655
|
101
|
Other
revenues
|
35
|
66
|
43
|
7
|
Total net
revenues
|
178,126
|
402,774
|
1,081,761
|
167,543
|
Cost of
revenues
|
(134,849)
|
(208,556)
|
(654,631)
|
(101,389)
|
Gross
profit
|
43,277
|
194,218
|
427,130
|
66,154
|
Operating
expenses:
|
|
|
|
|
Research and
development expenses
|
(26,073)
|
(58,161)
|
(63,975)
|
(9,908)
|
Sales and marketing
expenses
|
(6,520)
|
(6,298)
|
(25,774)
|
(3,992)
|
General and
administrative expenses
|
(29,587)
|
(143,426)
|
(171,892)
|
(26,623)
|
Total operating
expenses
|
(62,180)
|
(207,885)
|
(261,641)
|
(40,523)
|
(Loss)/income from
operations
|
(18,903)
|
(13,667)
|
165,489
|
25,631
|
Interest
income
|
873
|
430
|
1,977
|
306
|
Change in fair value
of warrant liability
|
-
|
-
|
77,676
|
12,030
|
Investment
income
|
1,923
|
184
|
93
|
14
|
Interest
expense
|
(1,519)
|
(231)
|
(15)
|
(2)
|
Foreign exchange
gains/(losses), net
|
80
|
13,008
|
(556)
|
(86)
|
Other income,
net
|
831
|
1,489
|
636
|
99
|
(Loss)/income
before income tax expenses
|
(16,715)
|
1,213
|
245,300
|
37,992
|
Income tax
expense
|
(72)
|
(9)
|
(337)
|
(52)
|
Net
(loss)/income
|
(16,787)
|
1,204
|
244,963
|
37,940
|
Foreign currency
translation adjustment, net of nil tax
|
(81)
|
2,357
|
(10,241)
|
(1,586)
|
Total
comprehensive (loss)/income
|
(16,868)
|
3,561
|
234,722
|
36,354
|
Weighted average
number of shares used in per share calculation:
|
|
|
— Basic
|
2,350,123,270
|
2,349,277,761
|
2,523,225,188
|
2,523,225,188
|
— Diluted
|
2,350,123,270
|
2,423,489,527
|
2,621,690,830
|
2,621,690,830
|
Net (loss)/earning
per share (cent per share)
|
|
|
|
|
— Basic
|
(0.71)
|
0.05
|
9.71
|
1.50
|
— Diluted
|
(0.71)
|
0.05
|
9.34
|
1.45
|
Share-based
compensation expenses
were
included in:
|
|
|
Cost of
revenues
|
-
|
177
|
849
|
131
|
Research and
development expenses
|
132
|
24,059
|
23,660
|
3,664
|
Sales and marketing
expenses
|
11
|
2,980
|
1,803
|
279
|
General and
administrative expenses
|
600
|
114,760
|
126,493
|
19,591
|
|
|
|
|
|
|
The table below sets forth a reconciliation of net (loss)/income
to non-GAAP adjusted net (loss)/income for the period
indicated:
|
For the Three
Months Ended
|
|
June 30,
2020
|
March 31,
2021
|
June 30,
2021
|
June 30,
2021
|
|
RMB
|
RMB
|
RMB
|
US$
|
Net
(loss)/income
|
(16,787)
|
1,204
|
244,963
|
37,940
|
Share-based
compensation expense
|
743
|
141,976
|
152,805
|
23,665
|
Change in fair value
of warrant liability
|
-
|
-
|
(77,676)
|
(12,030)
|
Non-GAAP adjusted net
(loss)/income
|
(16,044)
|
143,180
|
320,092
|
49,575
|
View original
content:https://www.prnewswire.com/news-releases/canaan-inc-reports-unaudited-second-quarter-2021-financial-results-and-announces-change-of-board-composition-301377370.html
SOURCE Canaan Inc.