Nano Labs Ltd (NA) 2022 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Nano Labs Fourth Quarter of 2022 Earnings Conference Call. (Operator Instructions) This conference is being recorded today, Tuesday, March 14, 2023. Joining us today from Nano Labs are the company's Chairman and Chief Executive Officer; Jianping Kong, the company's Chief Financial Officer, Mr. Bing Chen. On our call today, Mr. Kong will give you an overview of the company's performance. Mr. Chen will share the details of the company's financial results.

女士們，先生們，謝謝你們的支持。歡迎來到 Nano Labs 2022 年第四季度收益電話會議。 （操作員說明）今天，即 2023 年 3 月 14 日，星期二，錄製了這次會議。今天從 Nano Labs 加入我們的是公司的董事長兼首席執行官；公司首席財務官孔建平先生陳冰先生。在我們今天的電話會議上，孔先生將為您概述公司的業績。陳先生將分享公司財務業績的細節。

After that, we'll collect a question-and-answer session to take your questions. Before we continue, I'd like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended, and as defined in the U.S. Private Securities Litigation Regulation (sic) [Reform] Act of 1995. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performances or achievements to differ materially from those in the forward-looking statements.

之後，我們將收集一個問答環節來回答您的問題。在我們繼續之前，我想提醒您，在本次電話會議上討論的一些信息將包含前瞻性陳述，這些陳述符合經修訂的 1934 年證券交易法第 21E 條的含義，以及美國私人證券訴訟條例的定義（原文如此）1995 年 [改革] 法案。此類陳述基於管理層當前的預期以及當前的市場和運營狀況，並與涉及已知或未知風險、不確定性和其他因素的事件相關，所有這些都難以預測，而且許多這些超出公司的控制範圍，可能導致公司的實際結果、業績或成就與前瞻性陳述中的結果、業績或成就存在重大差異。

Further information regarding these and other risks, uncertainties or factors is included in the company's filings on the Securities and Exchange Commission. During today's call, Mr. Kong and Mr. Chen will deliver their remarks in Chinese, and the company representatives will provide corresponding English translations. With that, I would now like to turn the call over to Mr. Kong, the Chief -- Company's Chairman and Chief Executive Officer; Mr. Kong, please go ahead.

有關這些和其他風險、不確定性或因素的更多信息包含在公司提交給美國證券交易委員會的文件中。在今天的通話中，孔先生和陳先生將用中文發表講話，公司代表將提供相應的英文翻譯。有了這個，我現在想把電話轉給公司董事長兼首席執行官孔先生；孔先生，請繼續。

Mr. Kong, please go ahead.

孔先生，請繼續。

[Interpreted] Thank you, operator and everyone, for joining Nano Lab's Fourth Quarter of 2022 Earnings Conference Call today. On our call today, I will provide an overview of our recent development and our strategic initiatives in the next fiscal year.

[解讀]感謝運營商和大家今天參加 Nano Lab 2022 年第四季度收益電話會議。在我們今天的電話會議上，我將概述我們最近的發展以及我們在下一財年的戰略舉措。

Interpreted The fourth quarter of 2022 was a difficult quarter for our industry and overall crypto market, the dynamic market environment such as the conversion of Ethereum from POW to POS in mid-September last year had partially impacted our business. We continue to provide high-quality products to our customers. We also actively shifted our development strategy to adapt to the changing market conditions. Our management team has visited other countries and met industry experts and potential partners to explore expansion opportunities in the global market. We will continue seeking for growth potential to increase our market share. In the future, we will pay more attention to overseas markets, focusing on North America, North Europe, the Middle East and Southeast Asia.

解讀 2022 年第四季度對於我們的行業和整個加密市場來說是一個艱難的季度，動態的市場環境，例如去年 9 月中旬以太坊從 POW 轉換為 POS，對我們的業務產生了部分影響。我們繼續為我們的客戶提供高質量的產品。我們還積極調整髮展戰略以適應不斷變化的市場環境。我們的管理團隊訪問了其他國家，會見了行業專家和潛在合作夥伴，以探索全球市場的擴張機會。我們將繼續尋求增長潛力以增加我們的市場份額。未來，我們將更加關注海外市場，重點關注北美、北歐、中東和東南亞。

Interpreted In addition, I would like to share the most recent developments of our iPollo Metaverse. AIGC has been connected to the iPollo Metaverse as an important Layer 2 tool. It is a distributed 3D real-time rendering network aimed at the needs of metaverse construction. Depending on the decentralized technology and innovative consensus mechanisms, it can deeply integrate with AIGC, lower the threshold for user creation providing metaverse developers with low-cost rendering solutions and more efficient developer tools.

解讀 此外，我想分享一下我們iPollo Metaverse的最新進展。 AIGC 已經作為重要的 Layer 2 工具接入 iPollo 元界。是一個針對元宇宙構建需求的分佈式3D實時渲染網絡。憑藉去中心化的技術和創新的共識機制，與AIGC深度融合，降低用戶創建門檻，為元界開發者提供低成本的渲染方案和更高效的開發者工具。

Interpreted iPollo's elastic computing network now supports the inference of stable division (sic) [diffusion] machine learning models, allowing for the generation of patterns from the text that can be directly minting NFTs. With the integration of AIGC an important Layer 2 tool, iPollo Metaverse as the metaverse infrastructure provider allows the developers to create the metaverse, which provides a wide range of possibilities for the creation of unique and innovative metaverse experiences.

Interpreted iPollo 的彈性計算網絡現在支持穩定劃分 (sic) [擴散] 機器學習模型的推理，允許從文本中生成可以直接鑄造 NFT 的模式。通過集成重要的 Layer 2 工具 AIGC，iPollo Metaverse 作為 metaverse 基礎設施提供商允許開發人員創建 metaverse，這為創建獨特和創新的 metaverse 體驗提供了廣泛的可能性。

Interpreted At the same time iPollo Metaverse is committed to achieving open social and immersive experiences in the 3D metaverse world, which allows tens of thousands of real users to achieve real-time and low-cost interaction and the same thing with high fidelity and zero-latency environment, bringing users to new [web3 live world]. At the same time, our company also plans to provide 3D printing services for the user's metaverse world so that the virtual and reality can be organically combined. We expect to launch our iPollo Metaverse as soon as we can. We believe our iPollo Metaverse will become an iconic product in the industry.

解讀 同時iPollo元界致力於在3D元界世界中實現開放的社交和沈浸式體驗，讓數以萬計的真實用戶實現實時、低成本的交互和高保真、零距離的同一事物。延遲環境，將用戶帶入新的 [web3 live world]。同時，我司還計劃為用戶的虛擬世界提供3D打印服務，讓虛擬與現實有機結合。我們希望盡快推出我們的 iPollo Metaverse。我們相信我們的 iPollo Metaverse 將成為行業的標誌性產品。

Interpreted Thank you for your continued support to the company. Next, I will turn the call over to our Chief Financial Officer, Mr. Chen, for a closer review of our financial results. Mr. Chen, please go ahead.

感謝您一直以來對公司的支持。接下來，我將把電話轉給我們的首席財務官陳先生，以更仔細地審查我們的財務業績。陳先生，請繼續。

[Interpreted] Thank you, Mr. Kong. Good morning, everyone. On behalf of the management, I will provide a brief financial overview of the fourth quarter of 2022. Net revenues increased to RMB 12.7 million or USD 1.8 million for the fourth quarter of 2022 from RMB 3.2 million for the same period of 2021. The increase in net revenues was primarily due to the increase in sales volume of iPollo V1 Series and B1 Series products. Cost of revenues increased to -- significantly to RMB 89.3 million or USD 12.8 million for the fourth quarter of 2022 from RMB 26.9 million for the same period of 2021, mainly due to the inventory write-down caused by a decline in market expectations.

【解讀】謝謝孔先生。大家，早安。我將代表管理層簡要介紹 2022 年第四季度的財務概況。2022 年第四季度的淨收入從 2021 年同期的 320 萬元人民幣增加到 1270 萬元人民幣或 180 萬美元。增加淨收入的增長主要是由於 iPollo V1 系列和 B1 系列產品的銷量增加。收入成本從 2021 年同期的人民幣 2690 萬元大幅增加至 2022 年第四季度的人民幣 8930 萬元或 1280 萬美元，這主要是由於市場預期下降導致庫存減記。

Interpreted Total operating expenses were RMB 60.3 million or USD 8.7 million for the fourth quarter of 2022 from RMB 113 million for the same period of 2021. Selling and marketing expenses increased to RMB 5.6 million USD 0.8 million for the fourth quarter of 2022 from RMB 3.4 million for the same period of 2011. The increase in selling and marketing expenses was primarily due to the increase in advertising expenses to support marketing strategies, expand market share and improve brand visibility.

解釋 2022 年第四季度的總運營費用為人民幣 6030 萬元或 870 萬美元，而 2021 年同期為人民幣 1.13 億元。銷售和營銷費用從 2022 年第四季度的人民幣 3.4 元增加至人民幣 560 萬元至 80 萬美元2011年同期為百萬元。銷售及營銷費用的增加主要是由於廣告費用增加，以支持營銷策略、擴大市場份額和提高品牌知名度。

Interpreted General and administrative expenses increased to RMB 15.5 million USD 2.2 million for the fourth quarter of 2022 from RMB 10 million for the same period of 2021. The increase in general and administrative expenses was primarily due to the increase in employee salary expenses as the number and the salaries of general and administrative staff increased and increase in equipment fees and travel fees due to the development and expansion of its business.

解釋後的一般和行政費用從 2021 年同期的人民幣 1,000 萬元增加到 2022 年第四季度的人民幣 1,550 萬元至 220 萬美元。一般和行政費用的增加主要是由於員工工資費用的增加由於業務的發展壯大，一般和行政人員的工資有所增加，設備費和差旅費也有所增加。

Interpreted Research and development expenses decreased to RMB 39.2 million or USD 5.6 million for the fourth quarter of 2022 from RMB 99.6 million for the same period of 2021. The decrease in research and development expenses was primarily because the direct materials related to research and development decreased in the current period.

解釋研發費用從 2021 年同期的人民幣 9960 萬元減少到 2022 年第四季度的人民幣 3920 萬元或 560 萬美元。研發費用減少主要是因為與研發相關的直接材料減少在當前時期。

Interpreted Loss from operations was RMB 136.9 million or USD 19.7 million for the fourth quarter of 2022 compared with loss from operations of RMB 136.8 million for the same period of 2021. Net loss was RMB 132.8 million or USD 19.1 million for the fourth quarter of 2022 compared with net loss of RMB 135.5 million for the same period of 2021. Basic and diluted loss per ordinary share was RMB 1.19 or USD 0.17 for the fourth quarter of 2022. Compared with basic and diluted loss per ordinary share of RMB 1.32 for the same period of 2021. As of December 31, 2022 the company had cash and cash equivalents of RMB 87.8 million or USD 12.6 million compared with RMB 233.9 million as of December 31, 2021.

2022 年第四季度經解釋的運營虧損為人民幣 1.369 億元或 1,970 萬美元，而 2021 年同期的運營虧損為人民幣 1.368 億元。2022 年第四季度的淨虧損為人民幣 1.328 億元或 1,910 萬美元2021 年同期淨虧損為 1.355 億元人民幣。2022 年第四季度普通股每股基本和稀釋虧損為 1.19 元人民幣或 0.17 美元。相比之下，2022 年第四季度普通股基本和稀釋虧損為 1.32 元人民幣2021 年期間。截至 2022 年 12 月 31 日，公司的現金和現金等價物為人民幣 8780 萬元或 1260 萬美元，而截至 2021 年 12 月 31 日為人民幣 2.339 億元。

Interpreted Although the company is facing an uncertain market environment, we are actively addressing our development strategy and are full of confidence in the company's future development potential. We believe that our capabilities and technology are the solid foundation for our business development. We will continue to create long-term value for shareholders. Now I would like to turn the call over to the operator for questions-and-answer session.

解讀 雖然公司面臨不確定的市場環境，但我們正積極謀劃發展戰略，對公司未來的發展潛力充滿信心。我們相信我們的能力和技術是我們業務發展的堅實基礎。我們將繼續為股東創造長期價值。現在我想把電話轉給接線員進行問答環節。

(Operator Instructions) First question comes from Kathleen Ross, private investor.

（操作員說明）第一個問題來自私人投資者凱瑟琳羅斯。

So I actually have 2 questions here. First of all, I wanted to know like what has caused the company's financial metrics decline in the fourth quarter.

所以我實際上有兩個問題。首先，我想知道是什麼原因導致公司第四季度的財務指標下降。

[Interpreted] First, the conversion of Ethereum mainnet from proof-of-work to proof-of-stake in September 2022 affected some of the company's existing business. Besides the decline in the price of cryptocurrency during the second half of 2022, further results in a decline in our financial performance.

【解讀】首先，以太坊主網在2022年9月從工作量證明轉換為權益證明影響了公司的部分現有業務。除了 2022 年下半年加密貨幣價格下跌外，進一步導致我們的財務業績下滑。

Do you have some expectations for your like new products?

你對你喜歡的新產品有什麼期待嗎？

[Interpreted] We are currently developing Cuckoo 3. Also recently, we launched a new A-series iPollo computing devices, which feature high-performance graphics cards with large memory and high-core central processing units. The products are designed to support computing of AI-generated content and zero-knowledge group. At the same time, the company's iPollo Metaverse has recently made new technological progress AIGC has been connected to the iPollo Metaverse as an important Layer 2 tool. So developers can better leverage AIGC to create metaverses. It also offers extensive possibilities for creating unique and innovative metaverse experiences. Additionally, we also plan to providing 3D printing services for users' metaverses to integrate the virtual and the real world.

[解讀]我們目前正在開發Cuckoo 3。最近，我們推出了新的A系列iPollo計算設備，它具有大內存和高核中央處理器的高性能顯卡。這些產品旨在支持人工智能生成內容和零知識組的計算。同時，該公司的iPollo Metaverse近期也取得了新的技術進展，AIGC作為重要的Layer 2工具接入了iPollo Metaverse。因此，開發人員可以更好地利用 AIGC 來創建元宇宙。它還為創建獨特和創新的元宇宙體驗提供了廣泛的可能性。此外，我們還計劃為用戶的元宇宙提供3D打印服務，實現虛擬世界與現實世界的融合。

Thank you. Our next question will be from Irene Lavin, a private investor.

謝謝。我們的下一個問題將來自私人投資者 Irene Lavin。

I have 2 questions. Actually, my first question will be, could you give some brief introduction of AIGC and the ZKP computing and my second question is, what is the performance outlook for 2023?

我有兩個問題。實際上，我的第一個問題是，你能簡單介紹一下 AIGC 和 ZKP 計算嗎？我的第二個問題是，2023 年的性能前景如何？

[Interpreted] AIGC uses artificial intelligence technology to generate content that is characterized by automation and high efficiency. In recent years, the metaverse have been gradually developing and in the process of new moving towards the metaverse, a large amount of digital content is needed to support it. It is important to meet the demand by relying solely on human design and development. AIGC can solve this problem perfectly because it will be a new content generation tool in the web3 era.

【解讀】AIGC利用人工智能技術生成內容，其特點是自動化、高效。近年來，虛擬世界逐漸發展，在向虛擬世界新進的過程中，需要大量的數字內容來支撐。完全依靠人的設計和開發來滿足需求是很重要的。 AIGC 可以完美解決這個問題，因為它將是 web3 時代新的內容生成工具。

Interpreted Zero-knowledge proof is an encryption protocol where one party proves to another party that something is true without revealing how it is true. The intent of the zero-knowledge is that proving knowledge of certain information through simple disclosure is insignificant. The challenge is to prove the perception of such information without revealing the information itself or any other information. Zero-knowledge proof plays an important role in the encryption and web3, and it's highly expected in the Ethereum scaling and even blockchain.

解釋型零知識證明是一種加密協議，其中一方向另一方證明某件事是真實的，但不透露它是如何真實的。零知識的目的是通過簡單的披露來證明對某些信息的了解是微不足道的。挑戰在於在不洩露信息本身或任何其他信息的情況下證明對此類信息的感知。零知識證明在加密和 web3 中發揮著重要作用，在以太坊擴容乃至區塊鏈中被寄予厚望。

[Interpreted] We strive to enrich the company's product portfolio and our product iterations can improve performance and reduce power consumption. This is expected to attract more customers. We expect to gain considerable benefits from the new product portfolio and our product iterations. We estimate that our financial performance in 2023 will be well improved compared to the fourth quarter of 2022.

[解讀]我們努力豐富公司的產品組合，我們的產品迭代可以提高性能並降低功耗。預計這將吸引更多客戶。我們希望從新產品組合和我們的產品迭代中獲得可觀的收益。我們估計，與 2022 年第四季度相比，我們 2023 年的財務業績將得到很好的改善。

Our next question will be from Kathleen Smith, private investor.

我們的下一個問題將來自私人投資者凱瑟琳史密斯。

So my question is what's the key direction of the company's development in the future.

所以我的問題是公司未來發展的重點方向是什麼？

[Interpreted] In the future, we will strive to enrich our product portfolio by only focusing on the interactive upgrade of the premium series of products. In addition, we began to develop AIGC, real-time rendering, ZKP computing and 3D printing as well as other development directions of metaverse. In addition, in the future, we will pay more attention to overseas markets. Focusing on North American, North Europe, the Middle East and Southeast Asia. Thank you.

【解讀】未來，我們將努力豐富我們的產品組合，只專注於精品系列產品的交互升級。此外，我們開始著手AIGC、實時渲染、ZKP計算和3D打印等元宇宙的發展方向。另外，未來我們會更加關注海外市場。專注於北美、北歐、中東和東南亞。謝謝。

Thank you. We have no further questions at this time, and that concludes the question-and-answer session. Please let me turn the call back over to Mr. Chen for closing remarks.

謝謝。我們現在沒有其他問題了，問答環節到此結束。請讓我將電話轉回給陳先生作結束語。

[Interpreted] Thank you very much for joining this conference call. If you have any questions, please contact us through e-mail at ir.nano.cn or reach our IR Ascent's Investor Relations at tina.xiao@ascent-ir.com. Management will respond to your questions as soon as possible. We appreciate your interest and support in Nano Labs and look forward to speaking with you again next time.

[已翻譯] 非常感謝您參加本次電話會議。如有任何疑問，請通過電子郵件 ir.nano.cn 與我們聯繫，或通過 tina.xiao@ascent-ir.com 聯繫我們 IR Ascent 的投資者關係部。管理層將盡快回复您的問題。感謝您對 Nano Labs 的關注和支持，期待下次與您再次交流。

Thank you for attending Nano Lab's Fourth Quarter 2022 Earnings Conference Call. This concludes our call today, and we thank you for listening. Goodbye.

感謝您參加 Nano Lab 2022 年第四季度收益電話會議。我們今天的電話會議到此結束，感謝您的聆聽。再見。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此記錄中標記為 [已翻譯] 的部分由現場通話中的口譯員說出。]