Chinese mining equipment manufacturer Canaan Creative made a net loss of $148.6 million last year on revenue of $204.3 million.
Canaan Creative released its first earnings report since its public offering (IPO) on the Nasdaq stock exchange in November. The report has not yet been audited. According to Canaan Creative, the firm sold equipment with a total capacity of 10.5 EH/s, which is about 20% of the increase in the computing power of the Bitcoin network last year.
After the $90 million IPO, Canaan’s share price began to decline and reached $3.5 per share, which is 61% lower than the offering price. For the first nine months of 2019, the company suffered a net loss of $31.2 million, but in one fourth quarter, Canaan’s losses increased sharply to $114.7 million. Nangeng Zhang, CEO and founder of Canaan, said that the firm recorded an increase in hardware sales in October and November, but in December, the volume of trade fell sharply due to the volatility of the bitcoin exchange rate.
The management of Canaan Creative does not have high hopes for its business this year, as the coronavirus negatively affects the financial markets, commercial activities of all organizations and the economy as a whole. However, the company expects revenue of at least 60 million yuan in the first quarter.
In addition, in the report, Canaan Creative noted the growing cost of sales of equipment for mining bitcoin over the past year, which reduces the profitability of the company. The cost of producing Canaan miners includes the cost of raw materials, production and logistics, as well as a reduction in the price for prepayment by buyers. In 2019, the cost of produced miners was $278 million, which is $78 million more than the total revenue for the previous year.
Recall that at the beginning of last year, Canaan sales Director Cheng Fend (Cheng Fend) said that for most manufacturers of ASIC-miners, the main goal was to survive in the” bear ” market. In addition, in March, investors accused Canaan of hiding important information and providing false data.