Intchains Group Ltd (ICG) 2024 Q3 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by, and welcome to Intchains third-quarter 2024 earnings conference call. This conference call is being recorded. If you have any objections, you may disconnect at this time.

美好的一天，女士們先生們。感謝您的支持，歡迎參加 Intchains 2024 年第三季財報電話會議。本次電話會議正在錄音中。如果您有任何異議，您可以此時斷開連接。

Joining us today is Mr. Chaowei Yan, Chief Financial Officer of Intchains; and Ms. Minty Wang, Investor Relations Director. Mr. Yan will provide an overview of the company's performance and the details of the company's financial results. After that, we will conduct a question-and-answer session to take your questions.

今天加入我們的是Intchains財務長顏超偉先生；以及投資者關係總監Minty Wang女士。嚴先生將概述公司的業績以及公司財務表現的詳細情況。之後，我們將進行問答環節，回答大家的問題。

I'd now like to turn the call over to Minty Wang, Head of Investor Relations at Intchains Group Limited. Please go ahead.

我現在想將電話轉給 Intchains Group Limited 投資者關係主管 Minty Wang。請繼續。

Thank you, operator. Good day, everyone. I'm Minty. Welcome to Intchains Group Limited third-quarter 2024 earnings call. For today's call, Mr. Chaowei Yan, CFO of Intchains Group Limited, will provide a comprehensive overview of the company's performance and financial results for the quarter.

謝謝你，接線生。大家好。我是明蒂。歡迎參加 Intchains Group Limited 2024 年第三季財報電話會議。在今天的電話會議上，Intchains Group Limited 財務長顏超偉先生將全面概述該公司本季的業績和財務業績。

Before we proceed, I would like to remind everyone that today's discussion will include forward-looking statements. These statements involve known and unknown risks and uncertainties and are based on the company's current expectations and projections regarding future events that may impact its financial condition, operating results, and strategic direction.

在我們繼續之前，我想提醒大家，今天的討論將包括前瞻性陳述。這些陳述涉及已知和未知的風險和不確定性，並基於公司目前對可能影響其財務狀況、營運績效和策略方向的未來事件的預期和預測。

The company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances or changes in its expectations except as may be required by law.

除非法律要求，否則本公司不承擔公開更新或修改任何前瞻性陳述以反映後續事件或情況或其預期變化的義務。

Although the company believes that the expectations expressed in these forward-looking statements are reasonable, we 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. Investors should review other factors that may affect its future results in the company's registration statement and other filings with the SEC.

儘管公司認為這些前瞻性聲明中表達的預期是合理的，但我們不能向您保證此類預期將是正確的，並且公司提醒投資者，實際結果可能與預期結果有重大差異。投資者應在公司註冊聲明和向 SEC 提交的其他文件中審查可能影響其未來業績的其他因素。

We will discuss certain non-GAAP financial measures. Please also refer to a reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. The presentation and the webcast replay of this conference call will be available on the Intchains website at ir.intchains.com.

我們將討論某些非公認會計準則財務指標。另請參閱收益新聞稿中非公認會計準則衡量標準與可比較公認會計準則衡量標準的調節表。本次電話會議的示範和網路廣播重播將在 Intchains 網站 ir.intchains.com 上提供。

Now let me turn the call over to our CFO, Mr. Chaowei Yan. Please?

現在讓我把電話轉給我們的財務長顏超偉先生。請？

Thank you, Minty, and everyone, for joining Intchains earnings conference call for the third quarter of 2024. On today's call, we will provide an overview of our operational and financial performance. After that, we will conduct a Q&A session to take your questions.

感謝 Minty 和大家參加 Intchains 2024 年第三季財報電話會議。在今天的電話會議上，我們將概述我們的營運和財務表現。之後，我們將進行問答環節，回答大家的問題。

In reviewing the third quarter of 2024, the cryptocurrency market was mostly range bound with Bitcoin price remaining relatively stable, while other cryptos experienced varying degrees of decline. The crypto industry's narrative primarily focused on national and institutional investments in ETH, while some funds flowed into the Meme sector due to a lack of prevailing applications.

回顧2024年第三季度，加密貨幣市場大多區間震盪，比特幣價格保持相對穩定，而其他加密貨幣則出現不同程度的下跌。加密產業的敘述主要集中在國家和機構對 ETH 的投資上，而由於缺乏流行的應用程序，一些資金流入了 Meme 領域。

However, as the fourth quarter began, the result of US President election strengthened global investors' expectations for pro crypto regulation, leading to renewed optimism about crypto's future development.

然而，隨著第四季度的開始，美國總統選舉的結果增強了全球投資者對加密貨幣監管的預期，導致人們對加密貨幣未來的發展重新感到樂觀。

In November 2024, Bitcoin price consistently broke all-time highs. And sectors such as payment, Meme, and RWA also experienced rapid growth. We are confident about the upcoming development of the crypto market and actively preparing new ASICs and beginning primary efforts to build blockchain applications.

2024 年 11 月，比特幣價格持續突破歷史新高。支付、Meme、RWA等領域也經歷了快速成長。我們對加密貨幣市場即將發展充滿信心，並積極準備新的 ASIC，並開始主要努力建立區塊鏈應用程式。

As the company's growth strategy in the long term, Intchains' vision is to achieve growth that transcend crypto cycles through the developing applications based on Web3, while in the short term, the company is primarily focused on increasing ROI during crypto cycle. We enhanced ROI through continuously exploring promising crypto projects and accumulating Ether.

作為公司的長期成長策略，Intchains的願景是透過開發基於Web3的應用程式來實現超越加密週期的成長，而短期內，公司主要致力於提高加密週期的投資回報率。我們透過不斷探索有前景的加密項目和累積以太幣來提高投資回報率。

In third quarter 2024, we continued to drive sales of our Goldshell-branded computing equipment, designing for Kaspa, Alephium, Dogecoin, and Litecoin mining. This decision has allowed us to effectively capture the crypto market trends emerging in the fourth quarter. To seize the current wave of cryptocurrency development, we will continue to actively explore new projects and expect to produce new ASICs by first quarter 2025. Meanwhile, we will stick to our Ether accumulation strategy, whether in the peak or trough of the crypto cycle.

2024 年第三季度，我們繼續推動 Goldshell 品牌運算設備的銷售，這些設備專為 Kaspa、Alephium、Dogecoin 和 Litecoin 挖礦而設計。這項決定使我們能夠有效地捕捉第四季度出現的加密市場趨勢。為了抓住當前加密貨幣發展的浪潮，我們將繼續積極探索新項目，預計在 2025 年第一季生產新的 ASIC。同時，無論是在加密週期的高峰還是低谷，我們都將堅持我們的以太積累策略。

In the third quarter 2024, we continued to implement our strategy to accumulating Ether, reaching 4,149 Ether as of September 30, 2024, representing a 71.7% increase as of June 30. This month, we were excited to see that the total market cap of cryptocurrencies reached a historical high with Ether price surpassing the average cost of our holdings as of September 30.

2024年第三季度，我們持續實施累積以太幣的策略，截至2024年9月30日達到4,149個以太幣，截至6月30日成長了71.7%。本月，我們很高興看到加密貨幣的總市值達到了歷史新高，截至 9 月 30 日，以太幣價格超過了我們持有的平均成本。

Furthermore, as part of our initial foray into blockchain application expansion, we launched the Goldshell Pay in this quarter, offered a one-stop payment solution for merchants. Based on our confidence in the future of the crypto industry, we plan to launch a hardware crypto wallet in the fourth quarter, which will further enhance complete payment product line and application ecosystem.

此外，作為我們首次進軍區塊鏈應用擴充的一部分，我們在本季推出了Goldshell Pay，為商家提供一站式支付解決方案。基於我們對加密產業未來的信心，我們計劃在第四季度推出硬體加密錢包，這將進一步完善完整的支付產品線和應用生態。

We are confident that as Intchains' positioning and business model become more defined, our company's growing potential and long-term value will be fully realized. Moving forward, Intchains will continue to lead the industry, collaborating with partners to drive robust growth across the crypto cycles.

我們相信，隨著Intchains的定位和商業模式更加明確，我們公司的成長潛力和長期價值將得到充分實現。展望未來，Intchains將繼續引領產業，與合作夥伴合作，推動整個加密週期的強勁成長。

Now I will provide a brief financial overview on the third quarter of 2024. I'm pleased to report that the company's third quarter revenue was CNY60.3 million or USD8.6 million, representing a year-on-year increase of 781%, continuing the strong growth momentum from the second quarter of 2024. Revenue from the overseas accounted for 66.2% in the third quarter of 2024. Our global expansion strategy has been well continued since the second quarter.

現在我將簡要介紹 2024 年第三季的財務概況。我很高興地報告，該公司第三季營收為6030萬元人民幣（860萬美元），年增781%，延續了2024年第二季以來的強勁成長動能。2024年第三季來自海外的營收佔比為66.2%。自第二季以來，我們的全球擴張策略一直在良好地延續。

Our sales volume of ASIC chips for the third quarter was 207,838 units compared to 165,056 units for the same period in 2023, representing an increase of 26%. Revenue for third quarter was driven not only by the increase of sales volume but more importantly by the rise in the average selling price.

第三季ASIC晶片銷量為207,838顆，較2023年同期的165,056顆成長26%。第三季營收的推動不僅是銷售量的成長，更重要的是平均售價的上漲。

The gross margin was 67.7% in the third quarter, reaching the highest level since Q1 2023, primarily due to the higher gross margins for our latest ASIC chips products launched in 2024 compared to the older ASIC chips products.

第三季毛利率為67.7%，達到2023年第一季以來的最高水平，主要是由於我們在2024年推出的最新ASIC晶片產品的毛利率高於較舊的ASIC晶片產品。

In terms of total operating expenses, it was CNY37.7 million or USD5.4 million for the third quarter, representing an increase of 90.8% for the same period of 2023. The increase was primarily due to the loss on fair value of cryptocurrency and an increase of share-based incentive expenses.

從總營運費用來看，第三季為3,770萬元人民幣（540萬美元），較2023年同期成長90.8%。這一增長主要是由於加密貨幣公允價值損失和股權激勵費用增加。

The loss on fair value of cryptocurrency for the third quarter was CNY13.1 million or USD1.9 million. It was primarily due to the volatility of the cryptocurrency market with Ether price falling 24.2% from the end of second quarter to the end of the third quarter. While in November, as mentioned before, the Ether price surpassed the average cost of our holdings as of September 30, 2024.

第三季加密貨幣公允價值損失為 1,310 萬元人民幣（190 萬美元）。這主要是由於加密貨幣市場的波動，以太幣價格從第二季末到第三季末下跌了24.2%。而在 11 月份，如前所述，以太幣價格超過了截至 2024 年 9 月 30 日我們持有的平均成本。

Our net income for the third quarter was CNY3.2 million or USD450,000. And the non-GAAP adjusted net income was CNY19.1 million or USD912,000, both turning from a loss to a profit compared to the same period of last year. This was primarily due to the faster revenue growth in the third quarter compared to the growth in cost of revenue and operating expenses.

我們第三季的淨利潤為 320 萬元人民幣（45 萬美元）。非美國通用會計準則調整後淨利為1,910萬元或91.2萬美元，與去年同期相比皆由虧損轉盈。這主要是由於與收入成本和營運費用的成長相比，第三季的收入成長更快。

This quarter, we started to disclose non-GAAP adjustments net -- non-GAAP adjusted net income and primarily exclude share-based compensation expenses. We believe non-GAAP net profit reflects the company's ongoing operational performance.

本季度，我們開始揭露非 GAAP 調整後淨收入－非 GAAP 調整後淨利潤，主要不包括以股票為基礎的補償費用。我們認為非公認會計準則淨利潤反映了公司持續的經營績效。

Basic and diluted net earnings per share was RMB0.03 for the third quarter of 2024 compared to the basic and diluted net loss ordinary share of RMB0.16 for the same period of 2023, each ADS representing two of the company's Class A ordinary shares.

2024 年第三季的基本和稀釋每股淨利潤為人民幣 0.03 元，而 2023 年同期基本和稀釋普通股淨虧損為人民幣 0.16 元，每股美國存託股份代表公司的兩股 A 類普通股。

Looking ahead, we will continue to focus on product and project innovation and foster the adoption of blockchain technology for our clients and partners. We look forward to updating you on our progress. Thank you for your continued support.

展望未來，我們將繼續專注於產品和專案創新，並促進客戶和合作夥伴採用區塊鏈技術。我們期待向您通報我們的最新進展。感謝您一直以來的支持。

Thank you, Mr. Yan. At this point, I'd like to open the floor for questions. You're welcome to ask questions in Chinese or English, and we will provide English translation when necessary for convenience purpose only. In case of any discrepancies, please refer to our management's statements in the original language.

謝謝嚴先生。現在，我想請大家提問。歡迎您用中文或英文提問，為方便起見，我們將在必要時提供英文翻譯。如有任何差異，請參閱我們管理層的原始聲明。

Now operator, we may start the Q&A session. Thank you.

現在接線員，我們可以開始問答環節了。謝謝。

(Operator Instructions) [Marco Chang, Golonghui Research].

（操作員說明）[Marco Chang，Golonghui Research]。

Hi. This is Marco from Golonghui Research. Congrats on the company's strong growth in Q3. Firstly, I noticed that the company launched an app called Goldshell Pay in Q3, and you said you plan to launch a hardware crypto wallet in Q4. So my question for you is that, can tell us a little bit more about the assumptions of your Goldshell Pay and your hardware crypto wallet? And what differentiates yourself from the other app and wallets in the market? Thanks.

你好。我是 Golonghui Research 的 Marco。恭喜公司第三季的強勁成長。首先，我注意到該公司在第三季度推出了一款名為 Goldshell Pay 的應用程序，而您表示計劃在第四季度推出硬體加密錢包。所以我想問你的問題是，能否告訴我們更多關於 Goldshell Pay 和硬體加密錢包的假設？與市場上其他應用程式和錢包有何不同？謝謝。

Okay. Thank you for your question. Frst, the Goldshell Pay was released in the third quarter. And it is a one-stop payment platform serving global merchants currently and supports our merchants to receive cryptos, including Bitcoin, Ether, Dogecoin, Litecoin, Polygon in both USD Coin and Tether USD. Goldshell Pay serves including -- not only limited to payment process but for the risk monitoring and data analytics.

好的。謝謝你的提問。首先，金殼支付在第三季發布。它是目前服務全球商家的一站式支付平台，支援我們的商家接收加密貨幣，包括比特幣、以太幣、狗狗幣、萊特幣、Polygon 美元幣和 Tether 美元。Goldshell Pay 的服務不僅限於支付流程，還包括風險監控和資料分析。

However, it's still in the early stage. We do not expect it to generate revenue in the short term.

不過，目前還處於早期階段。我們預計它不會在短期內產生收入。

And for the hardware wallet, it's still in confidential and doing development process. But what we can say is that both Goldshell Pay and Goldshell wallet is an important step for us to explore our product line and develop our application ecosystem. And of course, both products will not have any custodian function, and the users should store their security key by their own, yeah. Thank you.

而對於硬體錢包來說，目前仍處於保密開發過程中。但我們可以說的是，Goldshell Pay和Goldshell錢包都是我們探索產品線和發展應用生態的重要一步。當然，這兩款產品都不具備任何託管功能，用戶應該自行儲存安全金鑰，是的。謝謝。

Okay, got it. Thank you. Operator, I don't have any further more questions.

好的，明白了。謝謝。接線員，我沒有其他問題了。

[Tao, Maxim].

[陶，馬克西姆]。

Yeah. Thank you. So my question is also related to the cryptocurrency wallet to be launched in the short future. So could you give us some projections about what the cost and how the revenue would be like driven by this project? And also, is this project to be developed in-house or the company is -- have a third-party partner to launch this cryptocurrency wallet? Thank you.

是的。謝謝。所以我的問題也與不久的將來推出的加密貨幣錢包有關。那麼您能否給我們一些關於該項目的成本和收入的預測？此外，這個專案是內部開發還是公司有第三方合作夥伴來推出這個加密貨幣錢包？謝謝。

Okay. Okay. The company's management firmly believe that in the future of blockchain application, which is also one of our reasons behind our long-term Ether accumulation strategy. In the past -- over the past few years, the company is primarily focused on providing mining assets for altcoins. And these projects have proven that it's successful.

好的。好的。公司管理層堅信區塊鏈應用的未來，這也是我們長期以太累積策略的原因之一。在過去的幾年裡，該公司主要專注於為山寨幣提供挖礦資產。這些項目已經證明是成功的。

But -- however, we are not remain confined to our comfort zone. So instead we have continuously sought the next growth curve for our company.

但是——然而，我們並沒有局限於我們的舒適圈。因此，我們不斷地為公司尋找下一個成長曲線。

So as we mentioned, in previous years, we did not venture into blockchain applications because our primary focus was on achieving business survival through ASIC sales. Now the sufficient cash reserve and sustained -- to sustain us to -- we have a sufficient cash reserve to sustain us to -- through the cycle and the market that has developed a certain level of awareness of blockchain applications.

正如我們所提到的，在前幾年，我們沒有涉足區塊鏈應用，因為我們的主要重點是透過 ASIC 銷售來實現業務生存。現在有足夠的現金儲備來支撐我們，我們有足夠的現金儲備來支撐我們度過週期和市場，這已經對區塊鏈應用產生了一定程度的認識。

The management believes it is time to begin exploring blockchain applications, starting with payments. Goldshell Pay is designed to offer merchants one-stop payment solutions, providing risk monitoring data, operating, and other functions with service fee collected in the process.

管理層認為是時候開始探索區塊鏈應用了，首先是支付。Goldshell Pay旨在為商家提供一站式支付解決方案，提供風險監控資料、營運等功能，並收取服務費。

And our hardware wallet is another product set to be released in the fourth quarter. But the further details will be disclosed upon launch. So currently, all these are in trial stage. We do not expect both Goldshell Pay and wallet will contribute materially to our profits during this phase, and it's difficult to provide a specific commercialization timeline. So -- but we aim to continue exploring variety of application directions and breakout of our current operational comfort zone and then achieve long-term stable growth. Thank you.

我們的硬體錢包是第四季發布的另一款產品。但更多細節將在發佈時披露。所以目前，這些都處於試驗階段。我們預計 Goldshell Pay 和錢包在此階段不會對我們的利潤做出實質貢獻，很難提供具體的商業化時間表。所以——但我們的目標是繼續探索各種應用方向並突破我們目前的營運舒適區，然後實現長期穩定成長。謝謝。

Thank you.

謝謝。

(Operator Instructions) [David Li, Premier Partners].

（操作說明）[David Li，Premier Partners]。

Hi. I wonder, the company has been saying that it had -- one of the strategies is accumulating Ether, which is a little bit different from more popular strategy, which is accumulating Bitcoin like MicroStrategy. So can the management elaborate on that strategy in particular? And also, some other company are also adopting -- like some leveraging or even some other financing to do that. So is the company also planning to do so?

你好。我想知道，該公司一直在說，其中一項策略是累積以太幣，這與更流行的策略有點不同，後者像 MicroStrategy 一樣累積比特幣。那麼管理層能否具體詳細說明該策略？而且，其他一些公司也正在採用一些槓桿甚至其他融資來做到這一點。那麼公司是否也有這樣的打算呢？

Thank you for the question. (technical difficulty) why we choose Ether accumulating, right? So regardless of whether it's in bull or bear market, the company remains sticking to accumulating Ether. And the reason for cumulative Ether is, firstly, we position us as an altcoin development company. Our primary business focused on providing ASIC chips for promising PoW coins. As PoS one of the main consensus mechanism besides PoW, we aim to share growth of POS sector by accumulating Ether.

謝謝你的提問。 （技術難點）為什麼我們選擇以太幣積累，對吧？所以無論是牛市還是熊市，該公司仍然堅持累積以太幣。而累積以太幣的原因，首先，我們將自己定位為山寨幣開發公司。我們的主要業務專注於為有前景的 PoW 代幣提供 ASIC 晶片。PoS作為PoW以外的主要共識機制之一，我們的目標是透過累積以太幣來分享POS產業的成長。

Therefore, investing in Intchains is in a sense similar to investing in enhanced altcoin portfolio, which offers a higher beta in all markets.

因此，投資 Intchains 在某種意義上類似於投資增強型山寨幣投資組合，後者在所有市場上都提供了更高的貝塔值。

Secondly, the company's founder has a technical background and certainly believes in widespread application of the crypto industry. We have also begun initial trials in blockchain applications. Currently, Ether remains the dominant public chain for Web3 application, making our strategy of accumulating Ether is -- accumulating Ether a natural fit.

其次，該公司的創辦人有技術背景，當然相信加密產業的廣泛應用。我們也開始了區塊鏈應用的初步試驗。目前，以太幣仍然是Web3應用的主導公鏈，這使得我們累積以太幣的策略是——累積以太幣。

Finally, the altcoin market is relatively untapped and overcome complete crypto cycle. The company has consistently generated operating profits and maintain self-sustaining growth. As a result, the company has a healthy cash reserve. This reserve allow us to navigate crypto bear markets smoothly and tends to lower overall ROI during bull market. Accumulating Ether serves as one way to improve our ROI.

最後，山寨幣市場相對尚未開發，並克服了完整的加密週期。公司持續創造營業利潤並維持自我持續成長。因此，該公司擁有健康的現金儲備。這項儲備使我們能夠順利應對加密貨幣熊市，並在牛市期間往往會降低整體投資回報率。累積以太幣是提高投資報酬率的一種方法。

And finally, for the financing -- possibility of financing strategy to accumulate assets. At present, the company primarily used its own cash to accumulate assets. However, we are aware that some US-listed company have deployed financing strategy to accumulate cryptocurrency like MicroStrategy. And their stock price, as you indicate, investors give full recognition of their approach.

最後，對於融資－融資策略累積資產的可能性。目前，公司主要利用自有現金累積資產。不過，我們注意到，一些美國上市公司已經採取了像MicroStrategy這樣的融資策略來累積加密貨幣。而他們的股價，正如你所指出的，投資人對他們的做法給予了充分的認可。

So as such, we will consider joining their successful experience and may explore financing options for asset accumulation at the appropriate time. Thank you.

因此，我們會考慮借鏡他們的成功經驗，在適當的時候探索資產累積的融資方案。謝謝。

Thank you for the questions. (Operator Instructions) At this time, it appears to be no more questions from the line. Allow me to hand the call back to the management for closing.

謝謝你的提問。（操作員說明） 此時，線路上似乎不再有任何問題。請允許我將電話交還給管理層以結束。

Okay. Thank you, operator. If there are no more questions online, maybe let's call it a day. And also, I want to say that if you have further questions, you can contact us through e-mail or maybe you can -- after this conference, you can visit our website to refer to the materials we listed. Thank you, operator, and thank you, everyone.

好的。謝謝你，接線生。如果網路上沒有更多問題的話，也許我們就到此為止了。另外，我想說，如果您還有其他問題，您可以透過電子郵件與我們聯繫，或者也許您可以——在這次會議之後，您可以訪問我們的網站，參考我們列出的資料。謝謝運營商，也謝謝大家。

That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.

今天的電話會議到此結束。感謝您的參與。現在您可以斷開線路。