AGM Group Holdings Inc (AGMH) 2021 Q3 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by, and welcome to AGM Group Holdings Inc. third-quarter 2021 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

美好的一天，女士們先生們。感謝您的耐心等待，歡迎參加 AGM Group Holdings Inc. 2021 年第三季財報電話會議。目前，所有參與者均處於僅監聽模式。稍後，我們將進行問答環節，屆時將給予說明。謹此提醒您，我們正在為今天的通話進行錄音。如果您有任何異議，您可以此時斷開連接。

Now I'll turn the call over to Miss Tracy Gao, Investor Relations Director of AGM Group. Miss Gao, please proceed.

現在我將把電話轉給AGM集團投資者關係總監高女士。高小姐，請繼續。

Thank you, operator, and hello, everyone. Welcome to AGM Group's third-quarter 2021 earnings conference call. Joining us today are Mr. Wenjie Tang, AGM Group's Co-CEO; Mr. Chenjun Li, the Company's Chairman and Co-CEO; and Mr. Steven Sim, the Company's Chief Financial Officer.

謝謝接線員，大家好。歡迎參加年度股東大會集團 2021 年第三季財報電話會議。今天加入我們的是 AGM 集團聯席執行長唐文傑先生；公司董事長兼聯席執行長李陳軍先生；以及公司財務長 Steven Sim 先生。

We released results earlier today. The press release is available from newswire services. A replay of this call will also be available in a few hours on our website. First, Mr. Tang and then Mr. Li will brief you on the Company's key highlights, and then Mr. Sim will review the Company's financial results.

我們今天早些時候發布了結果。該新聞稿可透過新聞專線服務取得。幾小時後我們的網站上也將提供本次電話會議的重播。首先，唐先生和李先生將向大家介紹公司的主要亮點，然後沈先生將回顧公司的財務表現。

Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risk and uncertainties. As such, the Company's actual results may be materially different from the expectations expressed today. Further information regarding those and other risks and uncertainties is included in the Company's public filings with the SEC.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。因此，公司的實際結果可能與今天表達的預期有重大差異。有關這些以及其他風險和不確定性的更多資訊包含在公司向 SEC 提交的公開文件中。

The Company is not going to assume any obligation to update any forward-looking statement, except as required under applicable law. Also, please note that, unless otherwise stated, all figures mentioned during the conference call are in US dollars. With that, let me now turn the call over to our Co-CEO, Mr. Wenjie Tang. Go ahead, Mr. Tang.

除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。另請注意，除非另有說明，電話會議中提到的所有數字均以美元為單位。現在，讓我將電話轉給我們的聯合執行長唐文傑先生。繼續吧，唐先生。

Thank you, operator, and good morning, everyone. Thanks for joining our third-quarter 2021 earnings conference call today. I am very excited to share with you the remarkable progress we have made in all fronts since the announcements of our new business launch in August.

謝謝接線員，大家早安。感謝您今天參加我們的 2021 年第三季財報電話會議。我很高興與您分享自八月份宣布推出新業務以來我們在各方面取得的顯著進展。

Our unwavering mission is to become an integrated technology company that focuses on the development of blockchain-oriented ASIC chips, the production of advanced crypto mining equipment, and the fintech software service. We were off to a great start financially with revenue of $5.34 million generated in the third quarter. Notably, our first ASIC crypto mining machine, KOI Miner C16, garnered widespread attention and interest over a very short period thanks to its cutting-edge technologies and the top industry performance metrics.

我們堅定不移的使命是成為一家專注於區塊鏈專用ASIC晶片研發、先進加密挖礦設備生產、金融科技軟體服務的綜合科技公司。我們在財務上取得了良好的開端，第三季實現了 534 萬美元的收入。值得注意的是，我們的第一台 ASIC 加密礦機 KOI Miner C16 憑藉其尖端技術和行業頂尖的性能指標，在很短的時間內獲得了廣泛的關注和興趣。

We have already secured a purchase order for 67,500 cryptocurrency mining machines, which has exceeded our expectation and is evidence that our strategies and efforts in transforming and upgrading our business are yielding very positive outcomes. Specifically, only 880 machines, approximately 1.3% out of our current total orders or a total computing power of 79,200 TH per second, were recognizing revenues for the third quarter. The remaining orders will be reflected in the future revenues with deliveries to be fulfilled.

我們已經獲得了67,500台加密貨幣礦機的採購訂單，這超出了我們的預期，這證明我們在業務轉型升級方面的策略和努力正在取得非常積極的成果。具體來說，只有 880 台機器（約占我們目前總訂單數的 1.3%，或每秒 79,200 TH 的總運算能力）確認了第三季的收入。剩餘訂單將反映在未來收入中並完成交付。

We are confident that the current favorable market trend will continue to spur robust demands for our mining machines, which makes me very optimistic about our potential growth in the cryptocurrency mining sector.

我們相信，當前有利的市場趨勢將繼續刺激對我們礦機的強勁需求，這使我對加密貨幣挖礦領域的潛在成長非常樂觀。

Meanwhile, we also worked hard to promote the development of our legacy fintech business as planned. Regarding our partnership with an Australian licensed broker for social trading and educational website service, we maintain our expectation that we will enter into a definitive agreement with this broker by the end of fourth quarter of 2021.

同時，我們也依照計畫努力推動傳統金融科技業務的發展。關於我們與一家澳洲持牌經紀商在社交交易和教育網站服務方面的合作關係，我們仍然期望在 2021 年第四季末與該經紀商達成最終協議。

In addition, we said earlier this year that we have established wholly owned subsidiaries in Singapore and Hong Kong. We are actively looking for candidates to expand our team in these regions for the preparation of new blockchain and fintech software development, and a consulting service in Asia area.

此外，我們今年稍早曾表示，我們已在新加坡和香港設立了全資子公司。我們正在積極尋找候選人來擴大我們在這些地區的團隊，為新的區塊鏈和金融科技軟體開發以及亞洲地區的諮詢服務做準備。

By leveraging advantages of a solid infrastructure and technology strategies, as well as a strong team, we are well positioned to address this burgeoning customer need and generate sustainable value for shareholders while we strive for us to become a key supplier and a contributor in the global blockchain ecosystem.

透過利用堅實的基礎設施和技術策略以及強大的團隊的優勢，我們有能力滿足這一新興的客戶需求，並為股東創造可持續的價值，同時我們努力成為全球的主要供應商和貢獻者。塊鏈生態系。

With that, I will turn the call over to our Chairman and Co-CEO, Mr. Chenjun Li, to provide some more details on our strategic initiatives.

接下來，我將把電話轉給我們的董事長兼聯合執行長李晨軍先生，以提供更多有關我們戰略舉措的細節。

Thanks, Wenjie. Good morning, everyone, and thank you for joining us today. I am very delighted with the positive market response we gained in our cryptocurrency mining equipment. Within just three months after our new strategic initiatives, we already secured substantial orders from well-known companies in the industry.

謝謝，文傑。大家早安，感謝您今天加入我們。我對我們的加密貨幣挖礦設備獲得積極的市場反應感到非常高興。新策略實施後短短三個月內，我們就已經獲得了許多業界知名企業的訂單。

The ever-growing orders signify that the quality of our products is recognized in the industry and further establish our leading position in the cryptocurrency mining world. In the third quarter, not only did we see strong orders and demands, but also, we built new strategic partnerships. Now let me summarize key partnerships we have announced so far.

不斷增長的訂單標誌著我們的產品品質得到了該行業的認可，進一步奠定了我們在加密貨幣挖礦領域的領先地位。第三季度，我們不僅看到了強勁的訂單和需求，而且還建立了新的策略合作夥伴關係。現在讓我總結一下我們迄今為止宣布的主要合作夥伴關係。

In September, we partnered with HighSharp Electronic Technology to expedite growth for both company in the rapidly growing cryptocurrency market. Pursuant to the partnership, the top priority is HighSharp will provide the latest ASIC chip technology and design service to us while we will engage in claims development.

9 月份，我們與 HighSharp Electronic Technology 合作，以加速兩家公司在快速成長的加密貨幣市場中的發展。根據合作夥伴關係，當務之急是HighSharp將為我們提供最新的ASIC晶片技術和設計服務，而我們將從事索賠開發。

Subject to meeting certain sales targets, the two parties also plan to set up a joint venture where we will hold a 60% stake. Combined with HighSharp's key R&D team members, the upcoming joint venture will deliver advanced semiconductor solutions for supercomputing hardware. The strategic partnership mentioned above was a very significant milestone for us, laying a solid foundation of our future growth and success.

在達到一定銷售目標的情況下，雙方也計劃成立合資公司，我們將持有60%的股權。即將成立的合資企業將與 HighSharp 的主要研發團隊成員結合，為超級運算硬體提供先進的半導體解決方案。上述策略夥伴關係對我們來說是一個非常重要的里程碑，為我們未來的發展和成功奠定了堅實的基礎。

Next, I'd like to share some color in our supply chain capabilities against the backdrop of a global semiconductor shortage. It is true that production of semiconductor wafers is not meeting demands right now. And any ASIC mining machine manufacturer must prove itself as a key market player in order to secure adequate supplies. The manufacturer must demonstrate its ability to design the chips, specifically for mining, and order from one of the few fabs in the market.

接下來，我想分享一下在全球半導體短缺的背景下我們的供應鏈能力的一些色彩。確實，目前半導體晶圓的生產無法滿足需求。任何 ASIC 礦機製造商都必須證明自己是重要的市場參與者，才能確保充足的供應。製造商必須證明其設計晶片的能力，特別是用於採礦的晶片，並從市場上為數不多的晶圓廠之一訂購。

For example, Samsung, SMIC, and TSMC. These top fabs will not sell to anyone except purchasers with proven research and development ability, and the access of sufficient capital to deploy for large prepayments of wafer orders, designs, and capabilities to build chips and mining machines, in the first place.

例如三星、中芯國際、台積電。這些頂級晶圓廠不會出售給任何人，除非買家擁有經過驗證的研發能力，並且首先有足夠的資金來部署大量預付款的晶圓訂單、設計以及製造晶片和礦機的能力。

Despite being a relatively new player in the market, AGM, through our partnership with HighSharp, can tap into their previous and future orders from these critical suppliers to secure semiconductor wafer resources. Meanwhile, as production is ramping up, we believe this supply crunch will ease in mid-2022.

儘管是市場上相對較新的參與者，AGM 透過我們與 HighSharp 的合作，可以利用這些關鍵供應商之前和未來的訂單來確保半導體晶圓資源。同時，隨著產量的增加，我們相信這種供應緊縮現象將在 2022 年中期得到緩解。

Now let me dive into our strategic move into the US. Due to the relatively stable environment in the US, we believe that North America is a key region for both bitcoin mining and our business, where setting up a manufacturing base will be strategically important to bring us closer to our customers. And we decided to seek appropriate opportunities to establish production operation in the United States or Canada, which will not only [simplify] competitors in global supply chain but also overcome logistics challenges.

現在讓我深入探討我們進軍美國的戰略舉措。由於美國相對穩定的環境，我們相信北美是比特幣挖礦和我們業務的關鍵地區，在那裡建立製造基地對於拉近我們與客戶的距離具有重要的戰略意義。我們決定尋找合適的機會在美國或加拿大建立生產運營，這不僅可以[簡化]全球供應鏈中的競爭對手，還可以克服物流挑戰。

We will be able to serve and support our partners and end customers, as well as reach a broader client group in the region. Most of our customers today are US- or Canada-based. So production from this planned manufacturing base will supply mainly to them.

我們將能夠為我們的合作夥伴和最終客戶提供服務和支持，並涵蓋該地區更廣泛的客戶群。今天我們的大多數客戶都位於美國或加拿大。因此，這個計劃中的製造基地的生產將主要供應給他們。

Our resellers and end customers are very supportive of this action, as it enables them to have more control over production and logistical issues, as well as delivery timetables. We are currently actively in discussion with potential partners in the US, and we will communicate with the market once we have more concrete progress in this initiative.

我們的經銷商和最終客戶非常支持這項行動，因為這使他們能夠更好地控制生產和物流問題以及交貨時間表。目前我們正在積極與美國的潛在合作夥伴進行討論，一旦該舉措有更多具體進展，我們將與市場進行溝通。

Given a large number of orders we have already received, the fourth quarter will be mostly geared towards fulfilling deliveries of these mining machines. Looking ahead, we will continue to build up our order book and establish sustainable, long-term relationship with our clients and enhance supply chain capabilities.

鑑於我們已經收到了大量訂單，第四季度將主要用於完成這些礦機的交付。展望未來，我們將持續擴大訂單規模，與客戶建立可持續的長期合作關係，並增強供應鏈能力。

In the short and the medium term, we will work with HighSharp to get the joint venture set up and be able to gradually design and produce chips. With these ongoing efforts, we are confident we will distinguish ourselves with our technical capabilities and then become a market-leading company to produce high-performance ASIC mining machines.

中短期來看，我們將與HighSharp合作，建立合資公司，並能夠逐步設計和生產晶片。透過這些持續的努力，我們有信心憑藉我們的技術能力脫穎而出，成為生產高性能 ASIC 礦機的市場領導公司。

Now I will turn the call over to our CFO, Mr. Steven Sim, who will review and comment on our financial results.

現在我將把電話轉給我們的財務長 Steven Sim 先生，他將對我們的財務表現進行審查和評論。

Thank you, Chenjun. And thanks, everyone, for being on the call. I will summarize some key financial results for the third quarter of 2021. In my comments on the quarterly results, I will refer to the third quarter of 2021 as the three months ended on September 30, 2021. All comparisons are to the prior year's third quarter ended September 30, 2020, unless otherwise stated.

謝謝陳軍。感謝大家的參與。我將總結2021 年第三季的一些關鍵財務表現。第三季進行除非另有說明，本季截至 2020 年 9 月 30 日。

Our solid performance in the third quarter reflects the success and profitability of our transition and engagement into the ASIC chip design and cryptocurrency mining equipment manufacturing space. We generated $5.34 million of revenue, mainly due to sales of crypto mining machine and computing hardware. Our total computing power sold rose to 79,200 TH per second compared to nil in the same period of 2020, after the Company announced in August to initiate a new growth strategy to become a key participant and contributor in the global blockchain ecosystem.

我們第三季的穩健表現反映了我們轉型和涉足 ASIC 晶片設計和加密貨幣挖礦設備製造領域的成功和獲利能力。我們產生了 534 萬美元的收入，主要來自加密礦機和計算硬體的銷售。在公司於 8 月宣布啟動新的成長策略，成為全球區塊鏈生態系統的關鍵參與者和貢獻者之後，我們銷售的總算力從 2020 年同期的零增加到每秒 79,200 TH。

We are still in the process of further upgrading the Company's business, but we have already gained a considerable amount of order number for our mining equipment. As aforementioned, most of the orders [weren't] reflected in the third quarter's revenue but will be taken into account in the future as we deliver the equipment to our client.

我們仍在進一步升級公司業務，但我們已經獲得了相當數量的採礦設備訂單。如上所述，大多數訂單[未]反映在第三季的收入中，但在我們將來向客戶交付設備時將被考慮。

Cost of revenues was $4.62 million as compared to $10,123 in the same period of 2020. Gross profit rose to $0.71 million from $21,138 in the prior year, primarily because of the substantial increase in revenues. Our gross margin was 13.4% in the third quarter of 2021. Once our joint venture with HighSharp is set up, we should be fully capable of designing and building at the AGMH joint venture level, which means we should embrace a higher-margin business.

收入成本為 462 萬美元，而 2020 年同期為 10,123 美元。 2021年第三季我們的毛利率為13.4%。

Total operating expenses were $0.34 million, up 17.1% from the previous year. In particular, selling, general, and administrative expenses increased by 20.2% to $0.33 million in the third quarter of 2021, mainly due to expenses result -- sorry, mainly due to expenses resulting from an establishment of a new wholly foreign-owned enterprise.

總營運費用為 34 萬美元，比上年增長 17.1%。特別是，2021年第三季的銷售、一般和管理費用增加了20.2%，達到33萬美元，主要是由於費用結果——抱歉，主要是由於設立新的外商獨資企業產生的費用。

As we cut investment in fintech R&D, research and development expenses were $10,304, a decrease of 35.6% from $16,007 in the same period of 2020. It is worth noting that we had not invested in the cryptocurrency mining machine R&D until September 30, 2021, and we will only expect to do so once the joint venture is set up.

由於我們削減了金融科技研發投入，研發費用為 10,304 美元，比 2020 年同期的 16,007 美元下降了 35.6%。在合資企業成立後才會這樣做。

Fueled by the increase in revenue, income from operations was $0.37 million compared to a loss from operation of $0.27 million in the same period of 2020. Net income was $0.2 million compared to a net loss of $0.32 million in the same period of 2020. As of September 30, 2021, and June 30, 2021, we had working capital of $3.23 million and $3.02 million, including cash and cash equivalents of $1.4 million and $0.4 million, respectively.

在營收成長的推動下，營運收入為 37 萬美元，而 2020 年同期營運虧損為 27 萬美元。和2021年6月30日，我們的營運資金分別為323萬美元和302萬美元，其中現金和現金等價物分別為140萬美元和40萬美元。

As we have now turned to a profit, our healthy financial position enables us to meet our net working capital needs for the near to midterm.

由於我們現在已經扭虧為盈，我們健康的財務狀況使我們能夠滿足近中期的淨營運資本需求。

Next, let me share some long-term perspective and thoughts regarding our business. Going into Q4 2021 and 2022, our imperatives will be delivering the substantial number of mining machines ordered and ramping up our production capacity and securing more purchase orders. This will form the basis of our financial growth and stability in the mid to long term, maximizing shareholders' value to the Company.

接下來，讓我分享一些關於我們業務的長期觀點和想法。進入 2021 年第四季和 2022 年，我們的當務之急是交付大量訂購的礦機，提高我們的產能並獲得更多採購訂單。這將構成我們中長期財務成長和穩定的基礎，最大限度地提高公司股東的價值。

As we seek to sustain our future growth trajectory, we will keep investing into and improving our R&D, cutting-edge technology, and manufacturing capacity to drive further development in our core crypto mining equipment manufacturing business and other initiative, as well as capitalize on the vast opportunities in the cryptocurrency mining sector.

在我們尋求維持未來成長軌蹟的過程中，我們將繼續投資和提高我們的研發、尖端技術和製造能力，以推動我們的核心加密採礦設備製造業務和其他計劃的進一步發展，並充分利用加密貨幣挖礦領域蘊藏著巨大的機會。

This concludes our prepared remarks. Let's now move the call for questions. Operator, please go ahead.

我們準備好的演講到此結束。現在讓我們開始提問。接線員，請繼續。

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions). (spoken in Chinese). Heather [Ting], Long Run Investment Management.

謝謝。女士們、先生們，我們現在開始問答環節。 （操作員說明）。 （用中文說）。 Heather [Ting]，龍潤投資管理公司。

(spoken in Chinese).

（用中文說）。

(spoken in Chinese).

（用中文說）。

Thank you. (Operator Instructions). [Darwin Chen], Right Time Funds.

謝謝。 （操作員說明）。 [Darwin Chen]，適時基金。

(spoken in Chinese).

（用中文說）。

(spoken in Chinese).

（用中文說）。

(spoken in Chinese).

（用中文說）。

(spoken in Chinese).

（用中文說）。

Okay. (spoken in Chinese).

好的。 （用中文說）。

(spoken in Chinese).

（用中文說）。

Thank you. (Operator Instructions). (spoken in Chinese). (Operator Instructions). All right, thank you. Seeing no more questions in the queue, let me turn the call back to Mr. Wenjie Tang for closing remarks.

謝謝。 （操作員說明）。 （用中文說）。 （操作員說明）。好的，謝謝。看到隊列中沒有更多問題，讓我將電話轉回給唐文傑先生做總結發言。

Thank you, operator. Thank you, all, for participating on today's call and for your support. We appreciate your interest, and I look forward to reporting to you again next quarter on all progresses.

謝謝你，接線生。感謝大家參加今天的電話會議並給予支持。我們感謝您的關注，我期待下個季度再次向您報告所有進展。

All right, thank you all again. This concludes the call. You may now disconnect.

好的，再次謝謝大家。通話就此結束。您現在可以斷開連線。