coindesk.com
Chinese mining rig maker Canaan’s share price lost almost 11% of its share price during trading yesterday, despite posting its best-ever revenue and profits yesterday.
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The Beijing-based manufacturer closed at $8.21 on the Nasdaq yesterday, down from $9.52 on market open on the same day, according data from Bloomberg.
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In its Q2 earnings, Canaan said it sold a record 5.9 million terahash/second, up 200% quarter on quarter and 127% year on year. Correspondingly, revenues were up 507% year on year, to RMB 1.1 billion ($167.5 million). The company recorded $37.9 million in net income, up from $186,000 in Q1 and a loss of $2.6 million in Q2 2020.
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The company forecast a Q3 revenue increase of 10% to 30% from the Q2, which translates to $184.25 million and $217.75 million. Analyst estimates weren’t available.
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Despite the record earnings, investors didn’t take well to “management’s lackluster guidance and mention of industry-wide challenges, including wafer supply instability, regulatory uncertainties and bitcoin price fluctuations,” Esme Pau, head of emerging technology research at China Tonghai Securities, told CoinDesk in a WeChat message.
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At the earnings call yesterday, investors pressed Chairman and CEO Nangeng Zhang, CFO James Cheng, and Senior Vice President of Technology Jingjie Wu about wafer procurement in light of a global chip shortage and rising demand for mining rigs worldwide, according to a transcript by Seeking Alpha.
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The CEO said that the company is negotiating with foundry partners “for the next 9 to 18 months, mainly till the second half of next year.” Canaan hasn’t received “any verbal or written guarantees” from foundries about additional capacity in 2022, Zhang added.
Read more: ASIC Maker Canaan Diversifies Into Bitcoin Mining in Kazakhstan
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