Q3 2021 AGM Group Holdings Inc Earnings Call

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Good day, ladies and gentlemen, thank you for standing by and welcome to a T. M 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 no.

Now I'll turn the call over to MS. Tracey go Investor Relations Director of AGM Group Michelle. Please proceed.

Thank you operator, and Hello, everyone welcome to.

The other quarter turn to turn to our earnings conference call joining us today I'm used to when you're at home and groups Kofi Oh, they start changing the company's China under co CFO and then Mr. Stevens, Inc. The company's Chief Financial Officer.

We released the result, although today the press release, it's available on the Newswire services.

A replay of this call will also be available in a few hours Oh, what besides Boston with hung on the Mr. Li well briefing on the Covid to highlight and then they stay schemes.

The company's financial results.

We continue please note that today's discussion.

Yellow colored some forward looking statements made under the safe Harbor provisions of the U S. Colombia secured litigation Reform Act of 1995 forward looking statements low inherent risks and uncertainties.

The company's actual results may be materially different from that your stock price.

Prices today.

Although information regarding built onto all of those risks and uncertainties is included in company's public filing with the ICC.

The companies don't assume any obligation to update any forward looking statement.

I'd be required under applicable law.

Please note that unless otherwise stated all figures mentioned during the conference call are U S dollars.

With that let me now turn the call over to our co CEO.

They can get at home and go ahead always talk.

Thank you operator, and good morning, everyone.

Thanks for joining our so called to a 2021 earnings conference call today.

I am very excited to share with you the remarkable progress we've made and the Oklahoma since the announcements on new business launch in August.

And we were ambition is to become an integrated technology company focused on the development of luxury oriented ASIC chips. The production is well equipped to mining equipment and the Fintech software service.

We were off to a great start financially.

With revenue up five points, three 4 million generated EBITDA.

Third quarter.

Notably our first Asia Crypto mining machine.

Call It minor thing.

Ghana widespread attention and interest over a very short period.

Thanks to the fence to its cutting edge technologies and the pulp industry performance metrics.

We've already secured a purchase order for 15.

<unk> 7500, crypto currency mining machine, which has a.

We exceeded our expectation and it is evidenced that our strategy and efforts being transforming and upgrading all goodness are yielding very positive outcome.

Specifically only 880 machines booked approximately a 1.3%.

Although our current Dakota orders.

Oh total computing power all 17, nine 200 th Christy I think we're recognizing revenues for the third quarter. The remaining orders will be reflected in the future revenues was deliberate.

Deliveries to be fulfilled.

We are confident that the current favorable market trend and will continue to spur a robust demand for our mining machines, which makes it very optimistic about our potential growth indeed cryptocurrency mining sector.

Meanwhile, we also worked hard to promote the development of our legacy things have been as planned.

Regarding our partnership with man, Australia licensed broker for social trading and educational website service, we maintain our expectation that we will enter into a definitely to agreement with this broke out by the end of fourth quarter of 2021.

In addition, we set we set earlier this year.

We have established a 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 a new blockchain and brings our software development and it consulting service in Asia.

Okay.

By leveraging our advantages are.

A solid infrastructure and the technology strength is as well as a strong team we are well positioned to address it.

Turning customer needs and generate sustainable value for shareholders. While we strive for is to become a key supplier and a contributor in the global blockchain ecosystem.

With that I'll turn the call over to our chairman and co CEO, Mr. Changing D to provide some more details on our strategic initiatives.

Thanks, Wade Yeah, good morning, everyone and.

Thank you for joining us today.

I'm very delighted with the positive market response, we gained in our crude without currency might increase myths.

We didn't just just three months after our new strategic initiatives, we already secured a substantial orders from well known companies in the industry.

Ever growing older signify that the quality of our product. It's a recognized leader in the industry and further establish our leading position in the cryptocurrency mining world.

In the third quarter.

Not only did we cease to join others leaky months, but also would be able to new strategic partnerships now let me summarize key partnerships, we have announced so far.

In September we partner or do we high shelf electronic technologies to expert tight gross for both company in their rapidly growing crypto currency market person.

Pursuant to the partnership the top priority is high shop, we provide the latest AC cheap technology and the design service to US well, we will engage in claims development.

Subject to meeting certain sales target.

The two parties also plan to set up a joint venture, where we will hold a 60% stake.

On binder with Sky chefs key R and D team members the upcoming joint venture would deliver advanced semi conductor solution for supercomputing, how do we or the.

The strategy partnership mentioned above was a very significant milestone for us laying a solid foundation of our future growth and success.

Next I'd like to share some color you know our supply chain capabilities against the backdrop of a global semiconductor shortage. It is a true that's protection of semiconductor wafers is not a meeting demands right now and any AC mining machine manufacture.

Sure must approve prove itself as a key market players in order to secure adequate supplies.

The manufacturer must demand street is our ability to design the cheapest fastest quality for money and order from one of the few facts in the market for example, Samsung and.

In the TSMC.

This pop FES will not sell to anyone except appreciate theirs with proof in the research and development.

The ability and the access for <unk>.

Sufficient capital to deploy for large pre payments or wafer orders device and the capabilities to beauty chips and the mining machines in the first place.

Despite being a relatively new player in the market a G M through our partnership with high shop can tap into their premier sand the future orders from these critical suppliers to secure semiconductor wafer resources.

Meanwhile, as production is ramping up we are pleased with.

Trench will ease in 2022.

Now, let me dive into our stretch the move to the U S. Due to their relatively stable environment in the U S. We believe that North America is a key region for both be quaint mining and our business when you're setting up manufacturing base will be drastically.

Important to bring us closer to our customers.

And we decided to seek appropriate to take the opportunities to establish a production operation in the United States, or Canada, which will not only simplify competitive in global supply chain, but also overcome logistics challenges.

We will be able to serve and support our partners and end customers as well as reshape their clients group in the region.

Most of our customers today are U S or Canada based so protection from these planned manufacturing base will supply the mainly to them.

Our resellers and the customers are very supportive of this action and it enables them to have more control over protection and the logistical issues as well as the delivery timetables.

We are currently actively in discussion with potential partners in the U S and we will communicate with the market. Once we have more concrete progress in these initiatives.

Given a large number of orders we have already received the fourth quarter will be mostly geared towards fully feeling de lever over this mining machines. Looking ahead, we will continue to build up our order book and these tablet.

Sustainable long term relationship with our clients and to enhance our supply chain capabilities.

In the short and the medium term, we will work with high shop to get at the joint venture set up and be able to gradually design and produce the chips with these ongoing efforts. We are confident we would get Queen we will distinguish ourselves with our technical kept.

Abilities, and it became a market leading company to produce high performance ASIC mining machines.

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

Yeah.

Thank you Tien tsin, and thanks, everyone for being on the call.

To summarize some key financial results for the third quarter of 2021, and my comments on the quarterly results, we thought through the third quarter Opex when you can.

One at the three months ended on September 30th 20th anymore.

Compared to.

Who.

<unk> third quarter ended September 30 are plenty of 'twenty unless otherwise stated.

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 much money equivalent manufacturing space.

We generated $5 $3 million of revenue, mainly due to the sales of Cristal mining machine and computing cookware Alcoa.

Total computing power, so rose to 79200 th, but the second compared to nil in the same period of 2020.

So the company announced in August to initiate a new growth strategy to become a key by disciplined and contribute to the global blockchain ecosystem.

We are still in the process of upgrading the company's business, but we have already gained a considerable amount of all the number well a mining equipment.

As Paul mentioned most of the orders when reflected in the quarter's revenue, but will be taken into account in the future as we deliver the equivalent to our client.

Cost of revenues was $12 six $2 million.

Compared to $10133 in the same period of 2020.

Gross profit Rose two 0.7 $1 billion from 31138 in the prior year, primarily because of the substantial increase in revenues.

Our gross margin was 13, 4%.

What else did you say one.

Once our joint venture with high shop is set up we should be fully capability designing and building at the H M. H, a joint venture level, which means we should embrace a higher margin business.

Total operating expenses was 0.3 $4 million up 17, 1% from the previous year.

In particular.

Selling general and administrative expenses increased by 22%.

Two zero by $50 million and it took quite a 2021.

Mainly due to expenses.

Result.

Sorry, mainly due to expenses, resulting from the establishment of a new wholly foreign owned enterprises.

As we put investment in things like R&D research and development expenses were 10300, Paul a decrease of 35, 6% of $16007 in the same period 2020.

It is worth noting that we had not invested in the cryptocurrency mining machine R&D until September 30 of plenty 31, and we would only expect to do so once the joint venture is set up.

Fueled by the increase in revenue income from operations was zero point, <unk> 7 million compared to a loss from operations of 0.2 $7 million in the same period a plenty.

Net income was 0.2 million compared to a net loss of 0.3 2 million.

St Peter out 'twenty 'twenty.

As of September 30 of 2021 and June 30 has plenty of anyone.

We had working capital of three.

$2 million and $3.0 billion to $1 billion.

Including cash and cash equivalents.

One $4 million and zero play for a minute.

Respectively.

S. We have nothing to prostate tissue.

Turning to our profit our healthy financial position enables us to meet our net working capital needs.

The near to midterm.

Next let me share a long term perspective and thoughts regarding our business.

Going into Q4, 2020, one and 2022.

Parakeets, we'll be delivering the substantial number my English and audit 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 for the company.

As we seek to sustain our future growth trajectory.

We'll keep investing into any proving our R&D.

I think edge technologies and manufacturing.

<unk> to drive further development called crypto mining equipment manufacturing business and other initiatives as well as capitalize of the bus opportunities the cryptocurrency mining sector.

This concludes our prepared remarks, let's now move the call for questions.

Operator, Please go ahead.

Thank you ladies and gentlemen, we will now begin the question and answer session.

If you wish to ask a question. Please press star one on your telephone Lake for your name to be announced.

If you wish to withdraw your request please press the pound key.

Once again Thats star one questions.

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Thank you. That's a reminder, ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone keypad.

Next question comes from the line of Dolby Chin from right time funds. Please ask your question.

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Thank you once again, ladies and gentlemen to ask a question. Please press star one on your telephone that's a Tiffany Rubin.

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As a reminder, ladies and gentlemen to what's a question. Please press star one on your telephone keypad.

Yeah.

Alright. Thank you think no more questions in the queue, Let me turn the call back to Mr. <unk> for closing remarks.

Thank you operator, and thank you for thank you all.

On today's call and the.

Support we appreciate your interest in it.

So again next quarter.

All of our operations.

Right. Thank you all again this concludes our call you may now connect.

Okay.

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