An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
The huge profit margin and improved performance are attributable to the huge sales made to top mining establishments in Q2.
Chinese computer hardware manufacturer Canaan Inc. has published its financial report for the second quarter of 2021 which ended June 30, the company recorded significant profit in the period despite the overall decline in the price of Bitcoin (BTC) in the same quarter.
According to the figures released yesterday, the company recorded over RMB1,081.8 million (US$167.5 million) as total net revenues in the second quarter of 2021. This was a 168% increase from what it was in the first quarter making it the highest quarterly sales in the history of the company’s operation since its IPO.
It wasn’t just the total revenue that improved. According to the report, the company also upped its net profit for the period. A net profit of $37.9 million was recorded. This is significant given that Canaan recorded a $33 million net loss in the first quarter despite the spike in Bitcoin prices in the same period.
Speaking about the report, Chairman and Chief Executive Officer of Canaan Mr. Nangeng Zhang noted, “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.”
Reason for Canaan Inc’s Record Profit Margins
The huge profit margin and improved performance are attributable to the huge sales made to top mining establishments in Q2. The report on Tuesday showed that the company delivered hardware of about 5.9 million terahashes per second (TH/s) of computing power in Q2 021. For example, recently, Digital Assets acquired 20,000 Bitcoin miners from Canaan. The company also has plans to add another 180,000 rigs.
In comparison to the delivery figures from Q1, there was a 200% increase in net profit. Zhang described the company’s Q2 report as “remarkable.”
In his comment, Mr. James Cheng, Chief Financial Officer of Canaan noted that beyond the record-setting revenue, the company’s vigorous book of preorders, primarily from overseas clients, ” have brought abundant prepayments, which further enhanced the cash position.”
As of the time of writing, Canaan’s share price gained by over 5% although it hasn’t matched the $36 peak in mid-March. The company’s stock is still net positive for the year in terms of price performance as it is up over 37% since Jan. 1.
The company also announced a change in board composition. Mr. Jiaxuan Li stepped down from the board of directors of the Company for personal reasons. Mr. Li served on the board from December 2015.