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01/11 16:20
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: strong revenue growth and margin improvement are positive, yet dependence on ETH price and yield strategies pose risks. The Q&A highlights cautious ETH accumulation and yield strategies, but management's vague AI market stance raises concerns. Despite gains in ETH holdings, the drop in revenue and operational losses negatively impact sentiment. The company's strategic innovation in altcoin mining is promising, but the lack of AI market plans and unclear guidance dampen enthusiasm. Overall, the neutral rating reflects balanced positive and negative elements in the company's outlook.
Revenue for Q2 2025 RMB 43.2 million or $6 million, a decrease compared to Q2 2024 due to lower sales from mining machines, impacted by a decline in Aleo price, newly imposed short-term tariffs, and delayed export of machines.
Cost of Revenue for Q2 2025 RMB 32.9 million or $4.6 million, a decrease of 20% from Q2 2024, primarily due to lower revenues recorded during the period.
Total Operating Expenses for Q2 2025 RMB 26.4 million or $3.7 million, 10.2% lower versus Q2 2024, attributed to reduced operational costs.
Loss from Operations for Q2 2025 RMB 16.2 million or $2.3 million, compared to income from operations of $8 million for Q2 2024, due to lower revenues and impairment charges related to excess mining machine inventory.
Interest Income for Q2 2025 RMB 3.1 million or $0.4 million, a decrease from Q2 2024, mainly due to cash used in acquiring ETH-based cryptocurrencies.
Gain in Fair Value of Cryptocurrencies for Q2 2025 RMB 42.8 million or $6 million, primarily due to increased holding of ETH-based cryptocurrency units by 1,793 units since Q1 2025 and a 34% increase in ETH price during the period.
Net Income for Q2 2025 RMB 38.3 million or $5.3 million, affected by lower revenues but offset by gains on fair value of cryptocurrency due to increased ETH holdings and a 34% rise in ETH price.
Revenues for First Half 2025 RMB 175.6 million or USD 24.5 million, primarily supported by sales of Aleo series mining machines.
Net Income for First Half 2025 RMB 4.3 million or $0.6 million, impacted by lower gross profit and losses on fair value of cryptocurrency as ETH price dropped by about 28% during the 6-month period.
Cash Position as of June 30, 2025 $71.6 million, consisting of cash and cash equivalents, deposits, and government securities.
Current Assets as of June 30, 2025 $94.5 million.
Total Assets as of June 30, 2025 $148 million.
Total Liability as of June 30, 2025 $4.6 million.
Goldshell mining machines: Launched new products and several upgrades to existing portfolio, including 6 major Aleo mining series and Goldshell Byte dual-mining machine, which gained strong traction.
Goldshell Pay and Goldshell Wallet: Launched as part of Web3 application development.
ETH accumulation strategy: Adopted ETH dollar-cost averaging accumulation strategy, increasing ETH holdings by 25.5% to 8,816 units as of June 30, 2025. Recognized as one of the top ETH treasury holders among public companies globally.
R&D investment: Invested $5.8 million in R&D to enhance mining machine efficiency and explore new altcoin projects.
ETH yield generation: Collaborated with FalconX to optimize ETH acquisitions and enhance yield through derivative-based strategies, targeting up to 10% annualized yield.
Long-term growth strategy: Focused on launching new products, upgrading mining machine efficiency, and expanding ETH reserve and yield-generation strategies to ensure sustainable growth.
Lower sales from mining machines: Revenue for Q2 2025 was negatively impacted by lower sales from mining machines compared to Q2 2024, driven by a decline in Aleo price, newly imposed short-term tariffs, and export delays.
Volatility in cryptocurrency prices: Fluctuations in cryptocurrency prices, including a 28% drop in ETH price during the first half of 2025, have impacted revenues and profitability.
Regulatory hurdles: Newly imposed short-term tariffs delayed the export of mining machines, negatively affecting sales.
Inventory impairment: An impairment charge was recorded due to excess mining machines inventory, reflecting challenges in demand forecasting and inventory management.
Altcoin price volatility: The company expects revenue for the second half of 2025 to be impacted by softer sales driven by altcoin price volatility.
Strategic execution risks: The company is making significant R&D investments and strategic moves, which may not yield immediate returns, posing risks to short-term financial performance.
Dependence on ETH price and yield strategies: The company's profitability is increasingly tied to ETH price movements and the success of its derivative-based trading and yield-generation strategies, which carry inherent risks.
Revenue expectations: The company expects revenue for the second half of 2025 to be impacted by softer sales driven by altcoin price volatility.
Growth strategy: The company plans to focus on two core pillars: launching new products and upgrading mining machine efficiency, as well as optimizing ETH accumulation and yield generation strategies.
R&D investments: The company is accelerating R&D investments to strengthen its technology leadership in the altcoin mining machine market and advance new altcoin projects towards commercialization.
ETH yield generation: The company aims to achieve an increased annualized yield on ETH holdings, potentially as high as 10%, through derivative-based trading strategies and lending activities.
Market positioning: The company is expanding its ETH reserve and digital asset positioning to improve overall profitability and long-term growth.
2026 growth outlook: Strategic moves in 2025, including R&D investments and ETH yield-generating initiatives, are expected to translate into tangible growth in 2026.
The selected topic was not discussed during the call.
The earnings call reveals challenges: declining revenue, increased operating expenses, and risks in ETH acquisition. Although there are gains in cryptocurrency value, the company's dependence on R&D, competitive pressures, and regulatory risks are concerning. The Q&A section highlights uncertainties, particularly in branding and operational plans for the staking platform. With weak financial performance and unclear strategic direction, the stock price is likely to face negative pressure, especially if the market cap is small, leading to a potential decline of -2% to -8%.
The earnings call reveals mixed signals: strong revenue growth and margin improvement are positive, yet dependence on ETH price and yield strategies pose risks. The Q&A highlights cautious ETH accumulation and yield strategies, but management's vague AI market stance raises concerns. Despite gains in ETH holdings, the drop in revenue and operational losses negatively impact sentiment. The company's strategic innovation in altcoin mining is promising, but the lack of AI market plans and unclear guidance dampen enthusiasm. Overall, the neutral rating reflects balanced positive and negative elements in the company's outlook.
The earnings call showed strong financial performance with a 78.5% revenue increase and improved gross margins. The company exceeded revenue guidance, turned operating income positive, and initiated a share buyback program, all positive indicators. Despite risks like macroeconomic challenges and regulatory concerns, the optimistic guidance and strategic focus on Ether and Web3 innovations support a positive outlook. The Q&A revealed optimism about product development and customer reception, further bolstering sentiment. Without market cap data, a general positive rating is appropriate, expecting a 2% to 8% stock price increase.
Despite strong revenue growth and positive financial metrics, the stock faces significant risks from market volatility, supply chain issues, and cryptocurrency price fluctuations. The Q&A session revealed management's reluctance to provide clear guidance, raising uncertainties. The positive impact of new product launches and optimistic market sentiment is countered by the negative effects of net losses and operational risks. Given these mixed signals, the stock price reaction over the next two weeks is likely to be neutral.
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