Intchains Group Limited (Nasdaq: ICG) (“we,” or the “Company”), a
provider of integrated solutions consisting of high-performance
computing ASIC chip products for blockchain applications and a
corporate holder of cryptocurrencies based on Ethereum, or ETH,
today announced its unaudited financial results for the second
quarter ended June 30, 2024.
Second Quarter 2024 Operating and
Financial Highlights
- Sales volume of ASIC chips is
274,019 units for the second quarter of 2024, compared to 371,423
units for the same period of 2023, representing a decrease of
26.2%. ASIC chip sales for the second quarter of 2024 consisted of
100,082 units sold directly to customers and 173,937 units embedded
in computing equipment for blockchain applications.
- Revenue was RMB123.0 million
(US$16.9 million) for the second quarter of 2024, representing an
increase of 785.1% from RMB13.9 million for the same period of
2023.
- Net income was RMB50.4 million
(US$6.9 million) for the second quarter of 2024, compared to net
loss of RMB20.5 million for the same period of 2023.
- As of June 30, 2024, the fair value
of our cryptocurrency assets was RMB135.7 million (US$18.7
million), primarily comprised of approximately 2,417 ETH with a
total fair value of RMB59.3 million (US$8.3 million), and
approximately 10,422,648 Tether (USDT) and USD Coin (USDC) with a
total fair value of RMB74.1 million (US$10.4 million).
Mr. Qiang Ding, Chairman of the Board of
Directors and Chief Executive Officer, commented, “In the second
quarter of 2024, the WEB3 industry as a whole has continued to
demonstrate robust year-over-year growth. Since March, we began
mass production and sales of our newly introduced Goldshell-branded
Box series computing equipment, designed for Kaspa, Alephium,
Litecoin and Dogecoin cryptocurrency mining. These products,
powered by our latest ASIC chips, have garnered substantial market
recognition since their launch due to their robust technical
specifications, including superior hashrates, and have contributed
to our second quarter revenue of RMB123.0 million, representing an
increase of 785.1% year-over-year. Looking ahead, Intchains remains
focused to technological innovation, aiming to deliver
higher-quality and more efficient solutions in the WEB3
industry.
Mr. Ding added, “Since implementing our
cryptocurrency acquisition strategy last quarter, we have continued
to increase our ETH holdings, optimizing our asset allocation. We
believe that this strategy, along with our cutting-edge technology
and advanced go-to-market capabilities, will significantly enhance
the resilience and profitability of our business model, positioning
us strongly to capitalize on long-term opportunities in the WEB3
market.”
Second Quarter 2024 Financial
Results
Revenue
Revenue was RMB123.0 million (US$16.9 million)
for the second quarter of 2024, representing an increase of 785.1%
from RMB13.9 million for the same period of 2023. The substantial
growth was primarily driven by a significant increase in the
average selling price of our ASIC chip products, which was
attributed to the sales of our latest ASIC chip products, which
commanded higher average selling price compared to the older ASIC
chip products.
Cost of Revenue
Cost of revenue was RMB40.9 million (US$5.6
million) for the second quarter of 2024, representing an increase
of 33.2% from RMB30.7 million for the same period of 2023. The
increase was primarily caused by the impact of inventory
write-down, prepayment write-down and provision for inventory
purchase commitments, which amounted to RMB 30.3 million (US$4.2
million) for the second quarter of 2024, compared to RMB22.5
million for the same period of 2023. The percentage increase in
cost of revenue was substantially lower than the percentage
increase in our revenue, which was primarily due to the higher
gross margins for our latest ASIC chip products.
Operating Expenses
Total operating expenses were RMB24.3 million
(US$3.3 million) for the second quarter of 2024, representing an
increase of 40.2% from RMB17.3 million for the same period of 2023.
The increase was primarily due to an increase in research and
development expenses, sales and marketing expenses, and general and
administrative expenses.
- Research and development expenses
increased by 47.6% to RMB13.2 million (US$1.8 million) for the
second quarter of 2024 from RMB9.0 million for the same period of
2023, primarily due to the increased share-based incentive
expenses, labor costs and expenses related to our research and
development projects.
- Sales and marketing expenses
increased by 48.5% to RMB1.9 million (US$0.3 million) for the
second quarter of 2024 from RMB1.3 million for the same period of
2023, mainly driven by the increased business promotion expenses,
increased share-based incentive expenses and labor costs.
- General and administrative expenses
increased by 25.5% to RMB8.9 million (US$1.2 million) for the
second quarter of 2024 from RMB7.1 million for the same period of
2023, mainly driven by the increased taxes surcharges, as well as
the increased share-based incentive expenses and labor costs.
- Loss on fair value of
cryptocurrency, net, for the second quarter of 2024 was RMB0.3
million (US$0.04 million), compared to nil in the same period of
2023.
Interest Income
Interest income decreased by 5.6% to RMB4.1
million (US$0.6 million) for the second quarter of 2024 from RMB4.4
million for the same period of 2023.
Other Income, Net
Other income, net, decreased to RMB0.1 million
(US$0.02 million) for the second quarter of 2024 from RMB0.3
million for the same period of 2023, mainly due to the decrease of
government grants, which was partially offset by the change in the
fair value of short-term investments.
Net Income/(Loss)
As a result of the foregoing, we recorded a net
income of RMB50.4 million (US$6.9 million) for the second quarter
of 2024, compared to a net loss of RMB20.5 million for the same
period of 2023.
Basic and Diluted Net Earnings/(Loss)
Per Ordinary Share
Basic and diluted net earnings per ordinary
share were RMB0.42 (US$0.06) for the second quarter of 2024,
compared to basic and diluted net loss per ordinary share of
RMB0.17 for the same period of 2023. Each ADS represents two of the
Company’s Class A ordinary shares.
Recent Developments
Overseas Expansion
We have historically generated all of our
revenue from sales in the PRC. However, with the continued
implementation of our overseas development strategy and the
official launch of our Goldshell-branded computing equipment for
blockchain applications targeted at overseas markets at the
beginning of March 2024, we started generating revenue from
customers in overseas countries and regions, primarily in Hong Kong
and the United States. For the second quarter of 2024, our overseas
revenue accounted for 71.7% of our total revenue. For our overseas
sales, we accept cryptocurrencies as a form of payment for our
products, subject to applicable local laws and regulations. We may
or may not liquidate such cryptocurrencies upon receipt.
Conference Call Information
The Company’s management team will host an
earnings conference call to discuss its financial results at 9:00
P.M. U.S. Eastern Time on August 15, 2024 (9:00 A.M. Beijing
Time on August 16, 2024). Details for the conference call are as
follows:
Event Title: |
Intchains Group Limited Second Quarter 2024 Earnings Conference
Call |
Date: |
August 15, 2024 |
Time: |
9:00 P.M. U.S. Eastern Time |
Registration Link: |
https://register.vevent.com/register/BI867e1497d39c4c20aecc6767dc702afb |
|
|
All participants must use the link provided
above to complete the online registration process in advance of the
conference call. Upon registering, each participant will receive a
set of dial-in numbers and a personal access PIN, which will be
used to join the conference call.
Additionally, a live and archived webcast of the
conference call will also be available at the Company’s website at
https://intchains.com/.
About Intchains Group
Limited
Intchains Group Limited is a provider of
integrated solutions consisting of high-performance computing ASIC
chip products for blockchain applications and a corporate holder of
cryptocurrencies based on ETH. The Company utilizes a fabless
business model and specializes in the front-end and back-end of IC
design, the two major components of the IC product development
chain. The Company has established strong supply chain management
with a leading foundry, which helps to ensure its product quality
and stable production output. The Company’s products consist of
high-performance computing ASIC chips with high computing power and
superior power efficiency, computing equipment incorporating its
ASIC chips, and ancillary software and hardware, all of which cater
to the evolving needs of the blockchain industry. The Company has
built a proprietary technology platform named “Xihe” to develop a
wide range of ASIC chips with high efficiency and scalability. To
support its WEB3 industry development initiatives, the Company
acquires and holds ETH-based cryptocurrencies as its long-term
asset reserve using liquid assets that exceed its working capital
requirements. For more information, please visit the Company’s
website at: https://intchains.com/.
Exchange Rate Information
The unaudited United States dollar (“US$”)
amounts disclosed in the accompanying financial statements are
presented solely for the convenience of the readers. Translations
of amounts from RMB into US$ for the convenience of the reader were
calculated at the noon buying rate of US$1.00=RMB7.2672 on the last
trading day of the second quarter of 2024 (June 28, 2024). No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
Forward-Looking Statements
Certain statements in this announcement are
forward-looking statements. These forward-looking statements
involve known and unknown risks and uncertainties and are based on
the Company’s current expectations and projections about future
events that the Company believes may affect its financial
condition, results of operations, business strategy and financial
needs. Forward-looking statements include, but are not limited to,
statements about: (i) our goals and strategies; (ii) our future
business development, formed condition and results of operations;
(iii) expected changes in our revenue, costs or expenditures; (iv)
growth of and competition trends in our industry; (v) our
expectations regarding demand for, and market acceptance of, our
products; (vi) general economic and business conditions in the
markets in which we operate; (vii) relevant government policies and
regulations relating to our business and industry; (viii)
fluctuations in the market price of ETH-based cryptocurrencies;
gains or losses from the sale of ETH-based cryptocurrencies;
changes in accounting treatment for the Company’s ETH-based
cryptocurrencies holdings; a decrease in liquidity in the markets
in which ETH-based cryptocurrencies are traded; security breaches,
cyberattacks, unauthorized access, loss of private keys, fraud, or
other events leading to the loss of the Company’s ETH-based
cryptocurrencies; impacts to the price and rate of adoption of
ETH-based cryptocurrencies associated with financial difficulties
and bankruptcies of various participants in the industry; and
(viii) assumptions underlying or related to any of the foregoing.
Investors can identify these forward-looking statements by words or
phrases such as “may,” “could,” “will,” “should,” “would,”
“expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “project” or “continue” or the negative of
these terms or other comparable terminology. The Company undertakes
no obligation to update or revise publicly any forward-looking
statements to reflect subsequent occurring events or circumstances,
or changes in its expectations, except as may be required by law.
Although the Company believes that the expectations expressed in
these forward-looking statements are reasonable, it cannot assure
you that such expectations will turn out to be correct, and the
Company cautions investors that actual results may differ
materially from the anticipated results and encourages investors to
review other factors that may affect its future results in the
Company’s registration statement and other filings with the
SEC.
For investor and media inquiries, please
contact:
Intchains Group Limited
Investor relationsEmail: ir@intchains.com
|
INTCHAINS GROUP LIMITEDUNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS(All amounts in
thousands, except share and per share data, or as otherwise
noted) |
|
As of December 31, |
|
As of June 30, |
|
2023 |
|
2024 |
|
RMB |
|
RMB |
US$ |
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
694,750 |
|
|
645,064 |
|
88,764 |
Inventories, net |
41,767 |
|
|
40,526 |
|
5,576 |
Prepayments and other current assets, net |
47,403 |
|
|
59,625 |
|
8,205 |
Short-term investments |
13,596 |
|
|
16,554 |
|
2,278 |
Total current assets |
797,516 |
|
|
761,769 |
|
104,823 |
Non-current Assets: |
|
|
|
|
Cryptocurrency |
645 |
|
|
135,668 |
|
18,668 |
Property, equipment, and software, net |
49,184 |
|
|
48,563 |
|
6,682 |
Intangible assets, net |
3,425 |
|
|
3,767 |
|
518 |
Right-of-use assets |
1,735 |
|
|
1,253 |
|
172 |
Deferred tax assets |
12,899 |
|
|
21,049 |
|
2,896 |
Prepayments on long-term assets |
113,425 |
|
|
112,856 |
|
15,530 |
Other non-current assets |
421 |
|
|
740 |
|
102 |
Total non-current assets |
181,734 |
|
|
323,896 |
|
44,568 |
Total assets |
979,250 |
|
|
1,085,665 |
|
149,391 |
LIABILITIES, AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable |
195 |
|
|
4,170 |
|
574 |
Contract liabilities |
9,828 |
|
|
61,038 |
|
8,399 |
Income tax payable |
1,634 |
|
|
9,225 |
|
1,269 |
Lease liabilities |
1,103 |
|
|
1,511 |
|
208 |
Provision for warranty |
40 |
|
|
128 |
|
18 |
Accrued liabilities and other current liabilities |
15,364 |
|
|
19,817 |
|
2,727 |
Total current liabilities |
28,164 |
|
|
95,889 |
|
13,195 |
Non-current Liabilities: |
|
|
|
|
Deferred tax liabilities |
— |
|
|
45 |
|
6 |
Lease liabilities |
761 |
|
|
— |
|
— |
Total non-current liabilities |
761 |
|
|
45 |
|
6 |
Total liabilities |
28,925 |
|
|
95,934 |
|
13,201 |
Shareholders' Equity: |
|
|
|
|
Ordinary shares (US$0.000001 par value; 50,000,000,000 shares
authorized, 119,876,032 and 120,023,092 shares issued, 119,876,032
and 119,957,044 shares outstanding as of December 31, 2023 and June
30, 2024, respectively) |
1 |
|
|
1 |
|
— |
Subscriptions receivable from shareholders |
(1 |
) |
|
(1 |
) |
— |
Additional paid-in capital |
186,262 |
|
|
189,997 |
|
26,144 |
Statutory reserve |
48,265 |
|
|
50,923 |
|
7,007 |
Accumulated other comprehensive income |
1,838 |
|
|
1,617 |
|
222 |
Retained earnings |
713,960 |
|
|
747,194 |
|
102,817 |
Total equity |
950,325 |
|
|
989,731 |
|
136,190 |
Total liabilities and shareholders’ equity |
979,250 |
|
|
1,085,665 |
|
149,391 |
|
INTCHAINS GROUP LIMITEDUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME/(LOSS)(All amounts in thousands, except
share and per share data, or as otherwise
noted) |
|
For the Three Months ended June 30, |
|
|
2023 |
|
2024 |
|
RMB |
|
RMB |
US$ |
|
Products revenue |
13,899 |
|
|
123,014 |
|
16,927 |
|
Cost of revenue |
(30,717 |
) |
|
(40,930 |
) |
(5,632 |
) |
Gross profit/(loss) |
(16,818 |
) |
|
82,084 |
|
11,295 |
|
Operating expenses: |
|
|
|
|
Research and development expenses |
(8,977 |
) |
|
(13,247 |
) |
(1,823 |
) |
Sales and marketing expenses |
(1,274 |
) |
|
(1,892 |
) |
(260 |
) |
General and administrative expenses |
(7,055 |
) |
|
(8,857 |
) |
(1,219 |
) |
Loss on fair value of cryptocurrency, net |
— |
|
|
(259 |
) |
(36 |
) |
Total operating expenses |
(17,306 |
) |
|
(24,255 |
) |
(3,338 |
) |
Income/(loss) from operations |
(34,124 |
) |
|
57,829 |
|
7,957 |
|
Interest income |
4,391 |
|
|
4,145 |
|
570 |
|
Foreign exchange gains, net |
989 |
|
|
673 |
|
93 |
|
Other income, net |
283 |
|
|
125 |
|
17 |
|
Income/(loss) before income tax expenses |
(28,461 |
) |
|
62,772 |
|
8,637 |
|
Income tax (expense)/benefit |
7,948 |
|
|
(12,417 |
) |
(1,709 |
) |
Net Income/(loss) |
(20,513 |
) |
|
50,355 |
|
6,928 |
|
Foreign currency translation adjustment, net of nil tax |
3,170 |
|
|
(329 |
) |
(45 |
) |
Total comprehensive income/(loss) |
(17,343 |
) |
|
50,026 |
|
6,883 |
|
|
|
|
|
|
Weighted average number of shares used in per share
calculation |
|
|
|
|
— Basic |
119,876,032 |
|
|
119,915,507 |
|
119,915,507 |
|
— Diluted |
119,877,800 |
|
|
120,014,635 |
|
120,014,635 |
|
Net earnings/(loss) per share |
|
|
|
|
— Basic |
(0.17 |
) |
|
0.42 |
|
0.06 |
|
— Diluted |
(0.17 |
) |
|
0.42 |
|
0.06 |
|
|
INTCHAINS GROUP LIMITEDUNAUDITED
CRYPTOCURRENCY-ADDITIONAL INFORMATION |
As of Quarter Ended |
Cryptocurrency |
Approximate Number of Cryptocurrency Held atEnd of
Quarter |
OriginalCost Basis |
Approximate Average CostPrice Per
UnitofCryptocurrency |
LowestMarket PricePer Unit of Cryptocurrency DuringQuarter
(a) |
Market Value of Cryptocurrency Held at End of Quarter Using
Lowest Market Price (b) |
HighestMarket PricePer Unit of Cryptocurrency DuringQuarter
(c) |
Market Value of Cryptocurrency Held at End of Quarter Using
Highest Market Price (d) |
Market PricePer Unit of Cryptocurrencyat End ofQuarter
(e) |
Market Value of Cryptocurrency Held at End of Quarter Using
Ending Market Price (f) |
|
|
Unit |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
June 30, 2024 |
ETH |
1,937 |
6,179,744 |
3,190 |
2,814 |
5,450,718 |
3,974 |
7,697,638 |
3,394 |
6,574,178 |
ETH-Coinbase Staked |
480 |
1,301,108 |
2,711 |
2,954 |
1,417,920 |
4,243 |
2,036,640 |
3,645 |
1,749,600 |
Bitcoin |
3.95 |
265,883 |
67,312 |
56,500 |
223,175 |
72,777 |
287,469 |
61,613 |
243,371 |
USDT&USDC |
10,422,648 |
10,423,276 |
1 |
1 |
10,386,315 |
1 |
10,458,980 |
1 |
10,404,063 |
Others |
Multiple * |
107,484 |
Multiple * |
Multiple * |
54,226 |
Multiple * |
122,435 |
Multiple * |
64,202 |
Total |
|
18,277,495 |
|
|
17,532,354 |
|
20,603,162 |
|
19,035,414 |
|
|
|
|
|
|
|
|
|
|
|
March 31, 2024 |
ETH |
346 |
999,180 |
2,888 |
2,100 |
726,600 |
4,094 |
1,416,524 |
3,618 |
1,251,828 |
ETH-Coinbase Staked |
479 |
1,297,687 |
2,709 |
2,236 |
1,071,044 |
4,341 |
2,079,339 |
3,842 |
1,840,318 |
Bitcoin |
0.67 |
44,995 |
67,157 |
38,501 |
25,796 |
73,836 |
49,470 |
70,407 |
47,173 |
USDT&USDC |
99,583 |
99,583 |
1 |
1 |
99,583 |
1 |
99,583 |
1 |
99,583 |
Others |
Multiple * |
81,571 |
Multiple * |
Multiple * |
67,814 |
Multiple * |
124,481 |
Multiple * |
91,346 |
Total |
|
2,523,016 |
|
|
1,990,837 |
|
3,769,397 |
|
3,330,248 |
|
|
|
|
|
|
|
|
|
|
* The 'Others' category encompasses various
cryptocurrencies that are not reported individually due to their
lower significance. This category is labeled as 'Multiple' to
indicate the presence of diverse prices associated with different
type of cryptocurrency. Due to their immaterial nature, detailed
price listings are not provided.(a) The "Lowest Market Price Per
Unit of Cryptocurrency During Quarter" represents the lowest market
price for a single unit of cryptocurrency reported on the Coinbase
exchange during the respective quarter, without regard to when we
obtained any of the cryptocurrency.(b) The "Market Value of
Cryptocurrency Held at End of Quarter Using Lowest Market Price"
represents a mathematical calculation consisting of the lowest
market price for a single unit of cryptocurrency reported on the
Coinbase exchange during the respective quarter multiplied by the
number of cryptocurrency we held at the end of the applicable
period.(c) The "Highest Market Price Per Unit of Cryptocurrency
During Quarter" represents the highest market price for a single
unit of cryptocurrency reported on the Coinbase exchange during the
respective quarter, without regard to when we obtained any of the
cryptocurrency.(d) The "Market Value of Cryptocurrency Held at End
of Quarter Using Highest Market Price" represents a mathematical
calculation consisting of the highest market price for a single
unit of cryptocurrency reported on the Coinbase exchange during the
respective quarter multiplied by the number of cryptocurrency we
held at the end of the applicable period.(e) The "Market Price Per
Unit of Cryptocurrency at End of Quarter" represents the market
price of a single unit of cryptocurrency on the Coinbase exchange
at midnight UTC+8 time on the last day of the respective quarter,
which aligns with our revenue recognition cut-off.(f) The "Market
Value of Cryptocurrency Held at End of Quarter Using Ending Market
Price" represents a mathematical calculation consisting of the
market price of a single unit of cryptocurrency on the Coinbase
exchange at midnight UTC+8 time on the last day of the respective
quarter multiplied by the number of cryptocurrency we held at the
end of the applicable period.
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