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01/11 16:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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%.
Q3 2025 Revenue RMB 9.1 million, decreased due to lower sales of mining machines as the flagship ALEO mining project transitioned into a stable stage with leveled market demand.
Q3 2025 Loss from Operations RMB 41.8 million, attributed to softer demand for products during the period.
9 Months 2025 Revenue RMB 184.7 million ($25.9 million), decreased by 11% year-over-year due to cyclical market fluctuations and softer product demand.
9 Months 2025 Cost of Revenue RMB 108.2 million ($15.2 million), increased by 42.9% year-over-year due to an impairment charge recorded against excess mining machines inventory for certain altcoin mining machines.
9 Months 2025 Total Operating Expenses RMB 97.6 million ($13.7 million), increased by 6% year-over-year, primarily due to higher G&A and sales expenses.
9 Months 2025 Loss from Operations RMB 21 million ($3 million), compared to income from operations of RMB 39.8 million in 9 months 2024.
9 Months 2025 Interest Income RMB 8.6 million ($1.2 million), decreased year-over-year due to cash used to acquire ETH-based cryptocurrencies.
9 Months 2025 Gain in Fair Value of Cryptocurrencies RMB 79.3 million ($11 million), primarily due to increased ETH holdings by 3,117 units and a 21.4% increase in ETH price during the period.
9 Months 2025 Net Income RMB 78.7 million ($11 million), compared to RMB 38.7 million in 9 months 2024, driven by gains in cryptocurrency value.
Cash Position as of September 30, 2025 $66.5 million, consisting of cash and cash equivalents, deposits, and government securities.
Current Assets as of September 30, 2025 $93.2 million.
Total Assets as of September 30, 2025 $160.6 million.
Total Liabilities as of September 30, 2025 $5.6 million.
Year-to-Date R&D Investment Approximately $9 million, reflecting a commitment to technological advancements and long-term growth.
Launch of ALEO miner series: Introduced in February 2025, showcasing high-performance solutions for emerging blockchain ecosystems.
Launch of Goldshell Byte: A dual mining machine launched in March 2025, allowing replacement of mining costs based on market conditions.
Launch of XTM mining service: Introduced in September 2025, including XT BOX mining machines and XT CARD for dual miner Goldshell Byte, expected to contribute significantly to Q4 2025 revenue.
AL CARD addition: Added to Goldshell Byte portfolio, enabling mining of six cryptocurrencies.
Upcoming Dogecoin mining machine: Test chips expected in December 2025, with commercial launch planned for H1 2026, anticipated to grow Goldshell brand market share.
ETH acquisition and staking strategy: As of September 30, 2025, held 9,919 ETH valued at $37 million. Partnered with FalconX for optimized ETH acquisition and yield generation, including staking 1,000 ETH.
Acquisition of proof-of-stake technology platform: Expanded blockchain infrastructure capabilities to include staking operations for Ethereum, Avalanche, Manta, and Conflux, enhancing presence in the staking ecosystem.
R&D investment: Invested approximately $9 million year-to-date in 2025 to drive technological advancements and sustain growth.
Revenue and financial performance: Q3 2025 revenue decreased to RMB 9.1 million ($1.3 million) due to softer demand. 9-month 2025 revenue was $25.9 million, down 11% year-over-year. Net income for 9 months 2025 was $11 million, up from $5.3 million in 2024.
Focus on Goldshell mining machines and ETH activities: Long-term growth strategy centered on these areas, with plans for new product launches and enhanced ETH strategies.
Blockchain ecosystem expansion: Acquisition of staking operations and partnerships to strengthen position in blockchain infrastructure and explore new collaboration opportunities.
Cyclical Volatility in Cryptocurrency Market: The company's revenue is heavily influenced by the natural volatility of the cryptocurrency and mining machine industry, leading to decreased sales and financial performance in Q3 2025.
Decline in Mining Machine Demand: The flagship ALEO mining project has stabilized, resulting in reduced market demand and lower sales of mining machines, impacting revenue.
Inventory Impairment: An impairment charge was recorded against excess mining machine inventory for certain altcoin mining machines, increasing costs and reducing profitability.
Increased Operating Expenses: Operating expenses rose by 6% due to higher general and administrative (G&A) and sales expenses, further straining financial performance.
ETH Acquisition Strategy Risks: The company paused ETH purchases in Q3 due to market conditions, which could impact its long-term ETH accumulation strategy and financial outcomes.
Dependence on R&D Investment: The company's reliance on significant R&D investments ($9 million year-to-date) poses a financial risk if new products fail to generate expected returns.
Competitive Pressures in Mining Hardware: The need to continuously innovate and launch new products to stay competitive in the altcoin mining hardware industry creates ongoing operational and financial challenges.
Regulatory and Market Risks: The cryptocurrency market is subject to regulatory uncertainties and market dynamics that could adversely affect operations and strategic plans.
Development and sale of Goldshell mining machines: Focus on the development and sale of Goldshell mining machines as a key growth driver for 2026 and beyond.
ETH accumulation and staking activities: Continued emphasis on ETH accumulation and staking activities as part of long-term growth strategy.
R&D investment: Approximately $9 million invested in R&D year-to-date to drive technological advancements and sustain long-term growth.
Product launches and upgrades: Launch of new products and continuous upgrades across existing product lines to enhance efficiency, performance, and user experience.
XTM miner series: Introduction of XTM miner series, expected to contribute meaningfully to Q4 2025 revenue.
Dogecoin mining machine: Test chips for a new Dogecoin mining machine expected in December 2025, with commercial launch planned for the first half of 2026.
ETH strategy partnership with FalconX: Partnership with FalconX to optimize ETH acquisition and explore yield generation strategies, including staking and derivative-based strategies.
Acquisition of proof-of-stake technology platform: Acquisition to expand blockchain infrastructure capabilities and strengthen presence in the staking ecosystem.
XTM miner series revenue contribution: XTM miners expected to account for meaningful revenue contribution in Q4 2025.
Dogecoin mining machine launch: New Dogecoin mining machine planned for commercial launch in the first half of 2026, expected to grow market share and contribute to top-line growth.
ETH acquisition strategy: Paused ETH purchases in Q3 2025 due to market conditions, with no plans to resume in Q4 2025. Long-term belief in ETH asset appreciation potential.
ETH staking initiatives: Initiated staking of 1,000 ETH units in Q3 2025 and expanded staking operations through acquisition of a proof-of-stake technology platform.
Revenue growth and bottom-line improvements: Business initiatives underway expected to drive tangible revenue growth and bottom-line improvements 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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