Release Date: November 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intchains Group Ltd (ICG, Financial) reported a significant year-on-year revenue increase of 781% for the third quarter of 2024, reaching CNY60.3 million or USD8.6 million.
- The company's gross margin reached 67.7% in the third quarter, the highest since Q1 2023, driven by higher margins from new ASIC chip products.
- Intchains Group Ltd (ICG) successfully increased its sales volume of ASIC chips by 26% compared to the same period in 2023.
- The company has launched Goldshell Pay, a one-stop payment solution for merchants, and plans to introduce a hardware crypto wallet, expanding its product line and application ecosystem.
- Intchains Group Ltd (ICG) has a strong global presence, with 66.2% of its third-quarter revenue coming from overseas markets.
Negative Points
- Total operating expenses increased by 90.8% compared to the same period in 2023, primarily due to losses on the fair value of cryptocurrency and increased share-based incentive expenses.
- The company reported a loss on the fair value of cryptocurrency amounting to CNY13.1 million or USD1.9 million, attributed to Ether's price volatility.
- Despite the revenue growth, the net income for the third quarter was relatively low at CNY3.2 million or USD450,000.
- Goldshell Pay and the upcoming hardware wallet are still in early stages and are not expected to generate significant revenue in the short term.
- The company's strategy of accumulating Ether, while potentially beneficial, carries risks due to the inherent volatility of the cryptocurrency market.
Q & A Highlights
Q: Can you provide more details about the Goldshell Pay app and the upcoming hardware crypto wallet? What differentiates them from other products in the market?
A: Goldshell Pay, launched in Q3, is a one-stop payment platform for global merchants, supporting multiple cryptocurrencies. It includes payment processing, risk monitoring, and data analytics but is not expected to generate short-term revenue. The hardware wallet is still in development, focusing on expanding our product line and application ecosystem. Both products will not have custodian functions, requiring users to store their security keys independently. β Chaowei Yan, Chief Financial Officer
Q: What are the cost and revenue projections for the cryptocurrency wallet project, and is it developed in-house or with a partner?
A: The management believes in the future of blockchain applications, which aligns with our Ether accumulation strategy. Previously focused on ASIC sales, we are now exploring blockchain applications, starting with payments. Goldshell Pay offers merchants a one-stop payment solution, and the hardware wallet will be released in Q4. Both are in trial stages, and we do not expect them to materially contribute to profits yet. β Chaowei Yan, Chief Financial Officer
Q: Why does the company focus on accumulating Ether instead of Bitcoin, and is there a plan to use financing for this strategy?
A: We focus on Ether due to our position as an altcoin development company and the dominance of Ether in Web3 applications. Our founder's technical background supports this strategy. We have a healthy cash reserve, allowing us to navigate market cycles and improve ROI. While currently using cash reserves, we may consider financing options for asset accumulation in the future. β Chaowei Yan, Chief Financial Officer
Q: How does the company plan to sustain growth and innovation in the crypto market?
A: Intchains aims to transcend crypto cycles by developing Web3 applications and increasing ROI during crypto cycles. We are exploring new projects and plan to produce new ASICs by Q1 2025. Our strategy includes accumulating Ether and launching products like Goldshell Pay and a hardware wallet to enhance our payment product line and application ecosystem. β Chaowei Yan, Chief Financial Officer
Q: What were the key financial highlights for Q3 2024?
A: Q3 2024 revenue was CNY60.3 million (USD8.6 million), a 781% year-on-year increase. Overseas revenue accounted for 66.2%. Sales volume of ASIC chips increased by 26% year-on-year. Gross margin reached 67.7%, the highest since Q1 2023. Net income was CNY3.2 million (USD450,000), turning from a loss to a profit compared to last year. β Chaowei Yan, Chief Financial Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
