Q4 2021 Canaan Inc Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to Canon, Inc. Fourth quarter and full year 2021 earnings conference call. At this time all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session. Please.

Note that this event is being recorded now I would like to hand, the conference over to your host today Ms C. Shang.

What's your relationship manager of the company. Please go ahead Michelle.

Thank you operator.

Hello, everyone.

Welcome to our earnings conference call.

Company Financial Oh Boy. The results were released by our Newswire services earlier today and are currently available online.

We announced today are our chairman and CEO , Mr. An uncle John Oliver.

Our CFO Mr Chong Chief.

It is a mixture of sell me or S. T E V O L I F.

We will also be available fueling the question answer session.

John will start the call by providing an overview of the company.

Pro forma.

For the quarter, Mr Chong, though them for what you do.

Details on the company's operating and financial results.

The appeal it before we open the call up for your questions.

Before we continue I would like to refer you to our safe Harbor feeling no earnings press release.

Today's call will include forward looking statements.

These statements include but not limited to our outlook.

Outlook for the company.

All statements and estimates.

Well the future results of operations or the performance of the company.

These statements speak only as of the date hereof.

Company assumes no obligation to revise any forward looking statements that may be made in today's press release.

Paul or website.

As required by law.

Well not guarantee of future performance.

Subject to risks uncertainties and assumptions.

We've worked with our press release and a list of factors and documents, we file with Securities and Exchange Commission, including our most recent annual report on form 20-F.

Felicia.

Uh-huh assumptions that may cause actual results.

It will differ materially from those set forth in such statements.

In addition, during today's call and webcast.

We'll discuss both GAAP financial measure.

Certain non-GAAP financial measures, which we believe are useful as supplemental measures of the company's performance.

non-GAAP measures should be considered in addition to and not as a substitute.

Or or isolation that result.

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Our young man woman lunch, when Chinese household downtown Santa Salon heat pumps.

But outside of the body.

Cancel neutral or maybe a citizen and back to you it wont be at Sangamo I believe attending.

To be honest.

The fourth quarter.

When you say, it's a wide range of challenges.

Including a high volatility quantifies the pandemic evolved much complex impact due to geopolitical factor.

Continued semiconductor supplier shortages.

Fabrication production line.

With a quite loudly attitude.

Taxable, yes steady operation.

We see the opportunity amidst a numerous challenges.

This enabled us to achieve progress on multiple fronts.

As demonstrated by our strong financial performance in the fourth quarter to close out the year 2021.

During the fourth quarter as we continued to expand the overseas market.

When you make hay with momentum in our computing power.

Reaching a record high.

Seven point.

So that 74 million tower cash flow second.

For the quarter, we achieved a 65, 8% quarter over quarter include revenue.

Or RMB, two 8 billion.

Going through the upper range of our guidance.

We are a net profit of RMB, one 2 billion another record high for our company.

For the full year, we completed well he talk was 34 million higher household second in total computing power.

238, 5%.

Yeah.

Total net revenues reached RMB.

Four point neither liability.

More than tenfold in Colombia.

Generating a net profit of RMB 2 billion for the year.

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She is doing quite well.

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Hello, I'm in tissue, but don't yet should a woman in Boston, our future openly telling about how it's all manageable.

Next let's look at our detailed operations during the quarter in terms of our mining machine itself.

Or like a 15, 5% quarter over quarter input will deliver 774 million Taro has for a second.

It empowers our clients.

Is that a new historical high for our quarterly sales portfolio.

Market demand remains robust.

Despite considerable volatility in fuel prices during the fourth quarter.

We're able to increase the overall selling price and drive revenue growth through various measures.

These measures include housing production.

Property yields.

Acquiring new customers.

Luckily in flexible pricing strategy.

Turning stable supply dynamically adjusting the proportion of spot sales.

We continue to diversify our computing power sales.

Two more overseas market.

Especially in southeast Asia as long as there is a lot of them.

For the first time, we have hustler, malecha, UAE, Argentina, Peru, and other emerging market.

Orders by new customer contributed a significant portion of our computing power.

Reaching 41%.

Yeah, well demand when they fall in traditional overseas market like Central Asia, North America and Europe .

Order by our existing clients represented 59% of total computing powerful.

Our ability to expand our geographic coverage bolster repeat purchases from a large mining company.

And maintain a consistent and stable supply chain.

Also to a more efficient efficiency.

Market demand into our system.

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I know you didn't you didn't see and walk home chef with some trouble when they try and our whole team.

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To jump on them.

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<unk> reported a solid sales performance.

Secure production capacity with a photo of carloads for the year.

In addition to our production capacity allocation for spot sales our mining business.

We see a lot of the RMB 144 billion phone calls I said, it's tough to look as of December 31st with plenty of time to watch.

Setting a new record.

This balanced with over 6 million higher hostile second we deliver.

So strong contract sales brought substantial passion for our company.

With black strong demands from it.

Be quite minor and their recognition of our products.

Our quality and delivery capability.

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Well I'm glad that you're talking about Qin, telling them, we're kind of looking for teaching quality doing Pete.

So you shouldn't just in China, but I'm not.

Regarding our bitcoin mining business, we said have overseas operations.

Every all of the mining operations and other <unk> related disease.

During this quarter, our mining operation in pub Echostar encountered multiple challenges.

Coding contaminate factor.

Logistics congestion on the power supply shortage in the winter, which negatively impacted our mining machine.

We are closely monitoring the local energy supply situation.

Oh stop on slides on making the effort.

Proactively proactively communicate with our.

Partner to solve the problem as soon as possible. We will also be prudent in telling us additional deployment.

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Oh, it's necessary so that's all for us.

Although our mining business in Congress.

The near term.

In the mining business is still one of our long term strategy.

With lessons from past experience, we will efficiently execute with the strategy. We will continue to leverage the advantages of our mining motion supply.

Through expanded presence on at least on the collaboration as well as dynamic allocation of production capabilities between our.

The production capacity in Russia with the money.

We endeavor to further enhance the overall economic benefits of our operation.

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We remain steadfast in developed and developing world.

In the fourth quarter feedback has been positive thus far.

<unk> continued interest with our customers.

Intelligent educational Hartwell smart home and various other applications scenario.

We reached a strategic cooperation agreements with open the envelope.

Leading open source operating system community.

<unk> platform.

We will currently for the development and application based on the open at all of those opening operating system and the attendant AI chip platform.

Localize the Oakland project.

Our computing AI chip applications.

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Regarding our RMB.

Sure.

But in terms of our research and development.

We continue to expand our R&D team on it.

All the design capabilities.

We have achieved the ability to independently implement chip fraud, and loss logging and background physical design, where multiple otherwise the note.

Probably the entire packaging.

The patient a mass production focused processes.

The fourth quarter, our total number of R&D staff increased by 99% year over years.

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They put you shouldn't Shannon chief of chocolate around Gen Kudo to anybody who shop.

It puts us at a self developed IP matrix and have established them, even more comprehensive self developed IP system.

We carefully protect the achievement of our R&D efforts with a range of active patent.

As of December 31st, but if something comes along we have accumulated 156 also expectation.

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No woman denture drills that she can't hold yet.

You can discuss your bond tranche of Hong Kong that computer would see that upon TWD two one times.

We also will continue to make steady progress on a number of R&D projects for new generation. So I'll pick one of my emotions.

That he take it Paul do you bake in the industry and providing better products for minor.

Going forward, we will close we will disclose specific performance parameter of new generation. My English is only after we ship in a successfully tape out and complete the food testing for the Lucky.

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We've got Tinder I truly understood.

You can see a hockey timeline.

The comparable.

No real quick with Chris Houston Hobby.

How do you see end up with what you want.

Of course, you can.

Tinder.

As we continue to propel us forward.

We remain committed to providing value for our shareholders.

Today, we have completed a repurchase program approved in September 2021 .

Presenting.

We purchased approximately $3 6 million.

For the total of one.

One 2 million U S dollar.

The repurchase program progresses smoothly and we were able to complete the program earlier than exploration date.

Subsequently the board of directors will continue to evaluate new repurchase plan.

There are multiple aspects.

We will keep you updated on any further progress.

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In 2020 , one we achieved sustained growth and a strong performance despite various uncertainties and market challenges.

It passed the month to the E secrecy of all our strategy and our solid execution.

Our portfolio capabilities.

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Tricia.

How near Chicago.

Boardroom PM Hong Kong, either show might hold off on yield trajectory does it offer.

In 2022, we remain committed to amplify our research and development capabilities.

Adding in chip design and improving.

Improving product performance.

In summary for me too.

We will also couple of hopefully enhance our customer orientation.

We shift our focus towards overseas market.

But if our partners across the globe, maintaining close communication and providing basketball class services you called me personally important.

It will better serve our customers we are exploring more client centric was a 12 hour product R&D manufacturing transportation and after sales services. Additionally, we will further leverage our.

Flexible and resilient operation.

The slides and Miss the market uncertainties.

We will continue to mitigate the impact from marquee Walnut and pecan price fluctuation with studies to supply them.

Your production capacity.

To maximize our profit through strategic balancing our mining machine itself a mining business.

Two can slip one at a time, we can upon doing that.

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We expect our total net revenue in the first quarter of 2022 will be in the range of RMB, one so the 500 million or RMB one holiday.

600 minutes left.

Presenting on inflows of 275% to 300% compared with the third quarter.

What are you going to watch it.

Please note that this forecast reflects our current and preliminary.

Our view on the market and operational conditions, which are subject to change.

Well, it's just far too early.

024 times.

This concludes my prepared remarks, I will now turn the call over Flowers' CFO Jay.

Yeah.

Thank you Mr. John and Hello, everyone. This is Jim speaking.

Despite the volatile market environment and the various challenges we achieved another robust quarter with solid financial results from top line to bottom line.

In the fourth quarter, we delivered the computing power solar of $7 7 million type of question.

Presenting a sequential growth of 16, 5%.

Total net revenues reached RMB $2184 6 million.

Up to 65, 8% quarter over quarter.

Which was 15, 8% higher than the upper limit of our previous forecast in November for.

For the full year of 2021, our total net revenue reached RMB $4986 7 million up more than 10 times year over year.

The good topline result came from our record high computing power so.

And a responsive delivery as well as our effective pricing strategy that enables more small cells driving higher average selling price additional.

Additionally, our effective business development across the continents helped us record.

Strong contrast to advances of RMB $1348 7 million as of 2021 and <unk>.

Ensuring substantial cash inflow and a steady revenue recognition for quarters ahead.

Our gross profit for the quarter doubled sequentially to RMB, 1486, 9 million and the gross margin rate.

68%, which is an outlier in the past four quarters.

Gross margin rate for full year, 'twenty or 'twenty. One is a 57, 2%. Please note that coal mining machines delivered during the fourth quarter, we secured the correspondent wafer cost for several quarters earlier.

From the ongoing demand and supply imbalance across the semiconductor industry and the feedback from our foundry partners.

We expect wafer cost to price increases in 2022, which will have an impact on our future gross margin rate.

Regarding our bitcoin mining business as of December 31st 2021, we have 113 million <unk> computing power deployed at mining firms.

The 2021, and we held 75 bitcoin.

With a carrying value of RMB $23 million.

Our AI business revenue achieved RMB, five 5 million in the quarter, representing a year on year growth rate of 153% and our sequential growth rate of 29%.

We kept getting positive feedback from customers in different industries.

And then we newly cooperated with the equal system platform partner opens annually.

Research and development expenses were RMB 100 itself zero minute, increasing by 179, 6% year over year and 28% quarter over quarter.

The increase was primarily attributable to the increased research and development costs for new products and our new hires in research and development team. We will continue to invest in R&D to advance our technology capabilities.

As a result of our strong revenue efficient operation and expense management, we realized a record high net profit of RMB $1196 5 million for quarter, four representing a sequential growth of $114 six per se.

For the full year of <unk> 21, net profit achieved RMB 2000 3 million noncash.

non-GAAP adjusted net income was RMB $1250 7 million for quarter four.

Representing a sequential growth of 112, 9%.

The full year of 2021 non-GAAP adjusted net income increased to RMB 2300 is the other $1 6 million.

While we are very pleased with our performance achieved in quarter four and in the full year of 2021, we are fully aware that the existing challenges may persist and new challenges may emerge.

Time to think kind of the plan the new year.

In two ways.

I would like to talk more about the risk factors and how we tackle them.

From a market environment perspective.

And the fed interest rate hike cycle for U S dollar.

The pace of interest rate increase has and will continue to have an impact on bitcoin price fluctuation.

On the other hand.

Geopolitical conflict, even military operations.

Also operating further uncertainties to bitcoin price fluctuations.

This comprised is closely linked to the demand and the price for our mining machine. Its fluctuation always has an impact on minus willingness to expenses expanded their mining sales impact.

In past quarters.

We continue with the building off of the capability of flexible in allocating group among conscious cells small cells and the mining operations to seize the opportunity during the bitcoin price fluctuation and to maximize the average selling price and the overall value.

Yeah.

On the supply front.

Given the ongoing wafer demand and supply imbalance across the semiconductor industry and the ensuing price increase.

We expect our production cost to screw up and bring pressure on the gross margin rate.

To sustain adequate wafer.

Fly will have been actively communication with our foundry partners and secure the production capacities with considerable amount of cash prepayments.

We will also continue to support our R&D team to further improve product and better utilize wafers to have higher production efficiency at a lower cost.

For our bitcoin mining businesses, we manage that to deploy our computing power as scheduled and we encountered unexpected winter electricity shortage in both quarter, four 2021, and the quarter one 2022.

We closely monitor the local conditions involvement and it will continue to be cautious in deploying additional computing power.

We are also actively evaluating target markets to diversify operational risks.

We are a bit of the all the stakeholders and we remain resilient in the mining business as one of our strategies.

We are also aware that some investors have questions about the <unk> as a U S listed Chinese companies.

<unk> is different from some other China companies listed in the U S. We are not under a <unk> structure.

And we are running our <unk> business was markets and our corporate customers, mostly located outside of China.

And our principal business activities do not involve large numbers of religious tivo user or deal with vast amount of user data.

Additionally, there is still around two year window before SEC give us the final decision and things may be sorted out before then considering SEC and IC are working closely to figure out a better solution.

Ultimately as a listed company payment has been committed to operational compliance and continues to optimize its management operation and the corporate governance.

It takes.

Good Black Smith to make steel.

Despite all the challenges ahead, we are confident in our effective strategies solid execution as well as our 90 year experience in the industry.

We will keep sharpening our R&D capabilities.

And the state vigilant and proactively mitigate risks with our dynamic operation.

Now I would like to briefly walk you through our financial results for the quarter.

Total net revenues in the fourth quarter were RMB $2184 6 million compared to RMB $38 2 million at the NPL results 2020, and RMB $1317 6 million in the third quarter of 2021, representing a sequential increase of $65.

8%.

Gross profit was RMB $1486 9 million compared to RMB $9 1 million in the same period of 2020, representing a sequential increase of 105%.

Total operating expenses in the fourth quarter of 2021 were RMB, two $273 7 million compared to RMB $80 1 million in the same period of 2020, and RMB 278 4 million in the third quarter of 2021.

Income from operations was RMB $1213 2 million up 161, 9% sequentially.

Net income attributable to ordinary shareholders.

RMB 1000 in the $196 5 million up one.

Hundred 14, 6% sequentially.

non-GAAP adjusted net income was RMB $1215 7 million up 112, 9% sequentially.

Adjusted net income or loss excludes share based compensation expenses.

Basic and diluted net earnings per ads for the quarter were RMB 690, and RMB 681, respectively.

As of December 31, 2021, the company had a cash and cash equivalents of RMB 2680, 4.2 million up 586.0%.

<unk> to RMB $391 3 million as of December 31st 2020.

This concludes our prepared remarks, we are now open for questions.

We will now begin the question and answer session to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Our first question comes from Shuang <unk> with <unk> Securities. Your line is open.

Hi, Hi can you hear me.

Yes.

Oh, hi, there.

From the question with the current team.

In early 2022 we saw the bitcoin price experiments dramatic drops.

So what was the impact on yourselves.

Oh control measures have you implemented to mitigate impact.

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And Nicole DVT the Honeywell.

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Tricia in Oklahoma, It could be a childhood, who tend to accomplish how do you that corona.

Coupled.

Yep.

Going to review with them on a childhood cancer.

Tony.

It's easy to achieve here.

The countries shut out charter shortly with transition you know when it presents itself.

How are you going out with over the IP.

Well I think it was hanging out okay, let me translate.

So we are still in the first full quarter of funding coming too on the price of Bitcoin is still fluctuating.

As such we can only share our observations or a macro perspective.

Previously when the price of bitcoin fell sharply cut.

Customer demand for our mined English is with the decline.

We'll generally have a wait and see attitude.

Resulting in a decline in sales.

Historically, the first quarter is also traditionally the off season and production sales are usually lower due to the holidays.

The increase was a new.

New year.

Chinese new year.

Dr. Tien <unk> to haul no actually we didn't push we assume.

It seemed to accumulative drunkard Shin young woman to enter the <unk>.

Patch, how hungry or quasi socials.

Convenient towards him on a tissue cells that cause the Coke zero control you don't call excuse me how quick one on top of that.

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Okay.

You know you would have with them.

And I think that's agenda, because we have a bottleneck.

For example, we talk about.

Good morning.

Digital use hallow Interbody Tito.

<unk> Yokohama.

However, there are other factors at play during the first quarter of this year. This primarily includes the continuing industry wide supply shortage of chips and mining machines caused by a minor role in the deployment of mining machines last year.

As clients tend to be highly institutionalized.

Institutional clients hold a long term horizon in terms of financing and investment activity.

Therefore, the price fluctuation in all these points during this period.

Had little impact on our sales price and sales volume our guidance for the first quarter of anybody to reflect our forecast of performance.

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Uhm.

Sure.

Do you see the quarter actually that's reduction of Copel <unk>.

TS has a coupon and you could get it to them.

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That's a whole non recourse.

P 19 portal with either an owner who can do shrontz you won't be I'm huh.

<unk> well so about half two one tcf again at some point.

<unk>, Kim Hong Kong Jihad once either neutral.

Meanwhile, we are mitigating the negative impacts of the steep price decline through.

<unk> measure.

We are actively expanding in new channels to reach new clients.

Well, thank God, you leverage future contract and reduced inventory pressure.

As evidenced by the stable future contract relationship that we have with a number of large mining harmony.

Finally, if those pilots continue.

Continue to fall and depending on the attendance and market conditions. We will also other just the allocation of what she is between inventory and mining deployment for better long term and short term revenue.

Yeah.

Ticket.

How does it hit me that.

Yeah.

Thank you. Our next question comes from Louis <unk> with Benchmark Company. Your line is open.

Oh, hi, Thanks for taking my call congratulations on a very strong quarter.

My first question is for the management is could you. Please elaborate on your progress on Pam on your computing power requirement for the mining business.

Okay.

Hello.

Paul.

Hello can you hear me.

Can you. Please translate your question into English.

Sure sure sure.

Sure.

Oh, that's a good one.

With a strong.

Okay.

Brian from Tokyo region.

But I was just a way of life.

That's a good corridor.

Sure.

Uh huh.

Sure Joe.

Our Union, Australia, essentially year or no.

Well, we don't push with a lock on Sunday you got you.

I'll do one sheet.

Generally not already are and you are you Arthur Barnard enough. When you don't go through Sandy for all of our central balance sheet.

Tricia and the hiring just want anytime that's helpful.

So a quick one on <unk> China.

Right.

As of December 31st, but some 71.

We had a one point a 176 million pair of hash wining computing power and the deployment.

As of February 28, two.

2022.

I'm trying to.

This horizon, two two points to 38 million parent cash of mining computing power under deployment.

We are currently in the process of deploying more computing power.

<unk> potential for a mining project.

Finally, the quote unquote refugee issue.

Alright.

Just wanted to kind of know how should we think about <unk> how close on EBIT.

Comparatively.

Oh, Jordan a photo you'll sit on it.

Contrary to G. Now so it could be a puncture newmar.

The main elements in that pool.

You are teaching us a pianist <unk> remarks.

In the future, we still continue to increase the deployment of computing power to our alignment with it.

But we do not cause either rapidly increasing our computing power.

It's a priority.

We will have a job.

Appointment pace balanced allocation between future sale bulk sale aligning computing power.

In this way we started to obtain maximum value.

And what potential risks.

In addition, all machines deployed in our mining business.

And also will be reallocated to spot sales if necessary.

Akshay.

Okay. Thank you. Thank you. Thank you for all the color I do have a couple of follow up question and I will go ahead ask the question.

This firsthand, how we translate them into Chinese myself.

My second question is in terms of our computing power deployment.

As in the management's opinion, what is the company's moat against competition. She was asking why do you send that child, who lives or somebody.

Yeah.

Your chance average inventory.

Going to the hotel include extra seminar.

I think if you look entirely linear to the onboard a tradeoff for you.

Uh huh.

Yeah those are the two room growth.

<unk> seen that not work.

So it sounds like you're talking about CGM, who hire another 200 that once you're going to hire an actual upon which this year has shown that it would be all.

Government deemed trigger suitable familiar in them.

So I didn't hear you shipped my father sooner actually I'll turn it over to Javier.

Surely a central window for example.

Sure.

Thank you so much.

$1 this year and finish at icon.

Too soon on that issue.

Switches.

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Okay.

Shipyard Xiaomi will be rock homes.

<unk> will.

Q2 was 120 <unk>.

But autonomous opportunities.

Currently there are no hall switches are useful.

The champion of $3 10 back to a call of duty.

So that change was on the Eagle Eagle Ford Haynesville.

When compared to the more of a vibrant blockchain industry.

Our industry competitive landscape.

It's become more stable.

Here.

There's a reason for that.

Recently, some very large companies have started to enter the industry after years of plenty and preparation.

However, based on our analysis of their Florida, so far they still need the substantial improvement in order to be competitive in the market.

Niche markets of the industry, such as the big mining ship.

Our team has accumulated extensive technology Peyton.

Which deal of Knowhow over many years.

By leveraging the strengths we have developed our product line.

An industry, leading level, thereby forming the company's logical format.

Technological moat.

Sure.

And the woman theatrical buendia no support.

Yes.

Johan.

Johan.

We achieved a panel.

Traditional electric utility.

Towards the restaurant, but let's go to a couple of months.

The woman novelty Giro Sharia general and see any of the quote tool set.

Welcome to the change in coupon that's hot in August .

For me on them.

Should we disarm Hulu newmont.

Do you wind up with me or Tim calling attention to openly problem in oncology.

Upon the falls church slowed into your tunnel.

None of them are.

Our Union Crusher kind of I'll call on you.

It's not a high fever chipotle because he is one of them and they will I don't want to bundle them. The two P M.

Yeah.

In addition, we continuously solidified and optimize our supply chain over the past few years of operation.

Our multifamily partnership strategy tolerance by our strong technology and RMB capabilities.

<unk> has enabled us to build cooperation with several competitive longer Congress.

This partnership allowed us to secure production capacity with otherwise to note.

Our effective cash management also allows us to lock in these capacities through otherwise the advanced payment in a timely manner.

In addition, our bitcoin mining business launched in 2021 will also help us mitigate the supply chain risks in the future.

Since that time, we have put in general kind of how that's your job.

A quick one on <unk>.

That's because you have a clear path or Super Hornet Your timeshare.

Hello, Moshe that's well done.

Police social following their whole alcohol.

How concerned are triggered.

Okay.

Oh sure either single contract cocoa nutrition for both.

200 <unk>.

Kosher nowhere.

The high court in a future trial, particularly shinnecock once journey equivalent.

Uh huh.

As we expand our business globally.

Our customers and partners have become more diversified and institutionalized.

As such our collaboration model has developed.

More developed from mining, Russia sale joint mines.

Creating a deeper win win proposition you can also see that some of our large scale institutional mining enterprise customers.

To refresh.

Purchase for us.

Forming long term stable relationship.

At the same time, we are constantly exploring new geographic markets.

Establishing cooperation with new customers.

We're going to try in Washington, and I'm sure you've got E G. Matt Sherwood 12, and according to you.

Tim Lugo conditional it'll be about phone they renew they.

I actually kind of central.

The year with regenerative Sri order itself with someone called quantity.

Well, let's see if I'm not sure.

And what Youre, telling them to go go on those thoughts.

Our business model with chip design as a core technology.

And selling.

<unk> is selling money mining machines.

Operating bitcoin mining visit.

Adding AI shapes, our businesses complement one another.

Combined with our underlying technology.

<unk>, formerly continuously self reinforcing the business model.

Jackson join the airlines, what I'm, saying, you got group with an approach to go to again.

Theaters will drive a strong opening in China or Chicago fruitful agreements.

Nicole the headquarter to human to human capital.

Sure Scott.

Yeah.

So pop songs you got it.

In addition, we have accumulated extensive operational experience.

And the capabilities from the supply chain.

Australian market, absolutely operated through cycles, so significant speed by volatility.

The top line yes.

We are able to respond to changes in the market and viewpoint twice it with flexible.

Operational adjustments.

Typically mitigates risk and opportunity.

It's a whole new element until they have to go out and they were comfortable so.

The union liquidity upheaval and took them down a point or so quickly.

We have no goal using our product.

So that should all close to quit.

Laughter lobbies as a U S listed company, we are more transparent and compliance in terms of company operations.

Governments and the disclosure at the same time, we also have access to more financing options and opportunities.

So anything you're trying to come in.

Some commentary, but kind of a quasi advancement globally at all that you got.

<unk> got quarter on quarter.

Okay.

So to answer your question this factor form our multi layer a competitive moat.

Oh, Hi, I'll take your question.

That's very helpful. Thank you just a couple a couple more quick follow up.

Pressure.

First of all could you please share some color on kind of market share.

This transaction reduces washout.

Two of them Peter final women tend to agree with the Doctor the path through the country woman.

Cornell quadruple that challenge.

Now not sure doctors on a telephone nursery Randy.

Thanks, sure knows junior and they'll do a chance I'll need of both of them have been untreated Serena.

Sure sure Tom Gruenwald.

You know you always hear due upon genome to European finance agencies in Shanghai on growing even faster.

Yeah.

Okay.

Uh huh.

I'll turn now to go starting to transact on the book on that useful.

Certainly it was.

Also Hong Kong regarding you know Amanda Central Sunny and I sure do the art Nouveau extra cash.

R&R Union to Chicago stocks of hydro.

And I'll start with you.

Youll R&R dollar it didn't work for you.

So anything you want your assumption on cigarettes and email.

You know it feels like you shrunk.

That's a cute either short or long, it's your own because it would be our true.

If you go to Chicago, and so you're going up here and I'll go through here.

She won't go on board to retreat.

Susan.

Okay, Let me translate.

Previously we generate estimated January estimated our market share according to our computing power solar and somehow network cash rate in the correspondent.

<unk>.

However in 2021.

Fluctuations of the network hash rate made it difficult to activate the market scale.

Specifically.

Mining machine offline.

Targeted their physical locations.

And connected online.

And for.

Due to regulatory reasons.

Nevertheless in 2021, we achieved 22 23 that has in total computing power source.

Compared with $66 six <unk> in 2020.

In 2021, our total revenue reached nearly RMB.

Slide 12, 1 million compared with RMB.

$400 million in 2020.

Therefore, we believe we gained some market share to some extent.

And hopefully we can have guidance from professional market research institutions.

Zero.

I hope that answers your question.

Okay. That's helpful. Thank you I just one last question.

I know the management has just talked about share repurchase plan does the management have any stock dividend program our plan in mind.

Translating that into Chinese.

Type one eastern shore and the guys to the.

With Ocado.

No no.

You'll be able to share.

Sure.

Thank you.

Hi.

So it's not going to go.

So that shrunk super comfortable with two powerful nutrition club tender.

Sean it's unique.

What are the priority for engaging pizza one come up.

How would you characterize channel total critical point is how long do you close the translation issue.

And of course, I think Sheila Patricia well it sounds great.

If you don't see Cheetah <unk>.

To cope with it all to go below Cushing, Oklahoma, some triple closer to what you're doing.

The Florida recognized our execution in the lasers the share repurchase program.

The early completion of our share buyback plan demonstrates the long term copied us.

The board and our management team.

We are evaluating the situation on the wheel submits a new stock repurchase proposal accordingly.

A little like formal announcement was the proposal is approved.

Our non union there sure.

Yeah.

Centered on a series of point Arnaud.

When it comes out on that.

So don't go Chris.

Sure Shuda Joshua to tone down a.

Tickets from Gartner shall come to order.

The strong quarter.

Kind of going towards I think the yield co.

Cook book you can go.

Cool.

What you don't know the harsher in Guy.

One woman who own them.

Based on how much you've called out <unk> Gotcha Gotcha.

Okay year, 2021 so our rapid growth.

We will Florida had further.

We look forward to continue and the expected it but well.

Through our past endeavor.

To fulfill this goal we need to invest more into our R&D.

Our market development.

On our business.

Optimize our services.

We are committed to generating more for our clients.

Shareholder sliding.

Driving mid to long term value.

Hope that answers your question.

Yes. Thank you very much really appreciate it again, congratulations on the strong quarter.

Okay.

Okay.

Thank you and that's all the time, we have for questions I'd like to turn the call back over to management for closing remarks.

Oh. Thank you once again for joining US today. If you have further questions. Please feel free to reach out to the contact information provided on our website. Thank.

Thank you.

Thank you that concludes the call today. Thank you everyone for attending you may now disconnect.

Okay.

Yeah.

Yes.

[music].

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by and welcome to Kevin Inc's fourth quarter and full year 2021 earnings conference call. At this time all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session. Please note that this event is being recorded.

I'd like to hand, the conference over to your host today PISCES Zhang Investor Relations manager of the company. Please go ahead Michelle.

Thank you operator, and Hello, everyone.

Welcome to our earnings conference call, the company's financial Oh boy be resolved or released by our newswire services earlier today and.

Currently available online. So we announced today are our chairman and CEO , Mr. An uncle, Joe and our CFO Mr. Chong Jade you know that.

It is a mixture of sell me or a C T.

Or do you want <unk>.

There will also be available during the course of the recession.

Yeah, So John will start the call by providing an overview of the company and performance highlights for the quarter with a total well done for what you'd hope details all the company's operating financial results.

The appeal it before we open the call up for your questions.

Before we continue I would like to refer you to our Safe Harbor statement No earnings press release.

Today's call will include forward looking statements.

He loves include but not limited to our outlook.

Outlook for the company.

Let's see let us do it.

Well the future results of operations or the performance of the company.

These statements speak only as of the date you all and the company assumes no obligation to revise any forward looking statements that may be made in today's press release, Paul or Whatsapp.

As required by law.

They love the loss guarantee of future performance.

Are subject to risks uncertainties and assumptions.

We've worked with our press release and a list of factors and documents, we filed with Securities and Exchange Commission.

Our most recent annual report on form 20-F.

Malaysia, Oh with Jos.

That may cause actual results.

Differ materially from those set forth in such statements.

In addition, you already for this call and webcast.

Discuss both GAAP financial measure.

So even though that's collateral measure, which we believe are useful as supplemental measures of the company's performance.

This non-GAAP measure should be either in addition to and not as a substitute for or isolation from GAAP results.

Okay.

Okay.

Okay.

Yeah.

Okay.

Okay.

Okay.

What's that.

Okay.

Okay.

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Okay.

Okay.

It could be the cathedral.

So as you know Oh, okay, both secure core janina kind of picture.

Our union.

This was due to a woman's singular piece have you talked about why don't you.

Yeah.

Do you anchor ingredients will track them up with IHS.

Finally Italia triangle.

<unk> hit on them.

With me it will ship author of hydro when Jan herbal should hopefully continue to Cook, who couldnt count right.

<unk> do you get your door to Humana at home work.

<unk>, Yeah, Yeah sure already argue opinion they renew.

When do you do on a CAGR women's I'm actually trying to hold onto what got those Chinese telco bolstered our Shandong hospital.

<unk>, Colorado for Cingal.

Brazilian showroom be our freedom Bayou at one being thrown around but I'm going to do a freudian.

Sure and good household <unk>.

<unk> do you see France yet.

And Todd I Reminbi shower yet.

<unk> already on email then landfill in China is total downtown down by <unk> <unk>. It turns out about the neuro about Saturday body.

Cancel neutral or maybe a citizen and back to you it wont be at them I believe attending.

Literary MBR for yet.

In the fourth quarter.

When you say, it's a wide range of challenges.

Including a high volatility quarter places pandemic evolved much complex impact due to geopolitical factor continues.

Continued semiconductor supplier shortages.

So I vacation production line.

With a lottery attitude and flexible yet steady operation.

We see the opportunities amidst a numerous challenges.

This enabled us to achieve progress on multiple fronts.

As demonstrated by our strong financial performance in the fourth quarter to close out the year 2021.

During the fourth quarter as we continued to expand the overseas market, we maintained momentum in our computing color Phil.

Reaching a record high of seven point.

So the 74 million telehealth for a second.

For the quarter, we achieved a 55, 8% quarter over quarter in revenue.

Or RMB 118.

So you can do it.

Lastly, through the upper range of our guidance.

We are a net profit of RMB, one 2 billion another record high for our company.

For the full year, we completed well Hey tool was 34 million had a harsh the second.

Total computing power goes up 238, 5% year over year.

Total net revenue reached RMB.

For now the liability.

More than tenfold in Colombia.

Generating a net profit of RMB 2 billion for the year.

Oh God I hope on for Glenn.

On this call.

<unk> hundred <unk> I'm, sorry, I called you talk about palm yet due to wide council in San Antonio to back to your Salon.

It sounds you do accounting the shelf once you do a trial treating.

Now let me its own drawn by the new showdown content <unk>, what kind of strong future Tricia box without telling you that contact.

So due to what you can you have you talked to any of the pushout of the Pudong.

Well either on cohort <unk> Hello, Hello.

<unk> been working out well.

<unk> horizontal beauty international but you can.

The charter with danger to them.

Young children drop.

Well the truth is also an EHR.

Paula had actually call route when I have one on that.

Well the DC I'll answer your last yeah potential Ivan Kim on for people, who don't see what else shall cocoa formulation Cocomat Sunny Italian Taliban municipally.

Oh sure Macondo Korea overall, the antitoxin or how that treehouse usual target, although Coca Cola, So anytime we thought about neutral deal.

Ralph and I forgot what I assume constant for Hugo.

How will the tissue when they end up winning that don't yet shadow and then Boston, how future openly telling about how they show manageable.

Next let's look at our detailed operations.

In terms of all our mining relation to <unk>.

Realized a 15, 5% quarter over quarter input will deliver $774 million higher household sectors.

<unk> empowers clients setting a new historical high ordinary sales pull forward.

Market demand remains robust.

Despite considerable volatility in fuel prices during the fourth quarter.

We were able to increase the overall I was selling price and drive revenue growth through various measures.

These measures include housing production.

The property.

Acquiring new customers.

<unk> flexible pricing strategy.

Turning stable supply.

<unk> of adjusting the proportion of spot sales.

We continue to diversify our computing power sale to a more overseas market.

Especially in southeast Asia as well as there is a lot of them.

For the first time, we have popular Malaysia UAE.

<unk> and other emerging market.

Other new customers contributed a significant portion of our computing power.

Reaching 41%.

While demand remained strong in <unk>.

Traditional overseas market like Central Asia, North America, and Europe , that's order by our existing clients represented 59% of total computing powerful.

Our ability to expand our geographic coverage bolster repeat purchases from a large mining company.

And may pay a consistent and stable supply chain allows us to be more efficient.

<unk> be a worse market demand into all of it.

Oh, sorry.

Nishu to your core Gen Counsel opinion, Indo China, you don't want me blush agenda unilateral buttresses yeah.

I know you didn't think it needed seeing what I'll call core southwest Central Oklahoma try in a hole.

Germany, our India Charlotte essentially here.

Draw clients reaping the renminbi Sega.

Cingal and so forth, but also on these how valuable on key vehicles with adequate wonder sitting in the room.

I'm, sorry, if I am a DWP.

Once on cool Black Hawks, with Italian as usual.

We do have a champion Jeff one of the leader going forward.

Well, we rebated coffee does lower revenues for the quarters to come.

We recorded solid sales performance.

<unk> production capacity with a photo of carloads for the year.

In addition to our production of the property allocation for spot sales our mining business.

We also advanced the RMB 144 billion phone calls our sales person look I'll.

As of December 30 for 2021 .

Setting a new record.

This summer goods or 6 million higher hostile second we deliver.

The strong contacts to what substantial passion for.

For our company.

These blocks strong demand.

Be quite minor and their recognition of our products.

Our quality and delivery capabilities.

This ample pipeline of alcohol well machines that have actually living in Louisiana.

For the year with a union whirlpool.

But one element that harvest Panamax one year, we showed all the ETR would help for boutique and to your point in round important calendar out what does that mean, you want without giving away a convincing what tricia you heard will fall until you go home.

I'm Gonna you combat Chen Tong will kind of into teaching quality.

So you shouldn't Jason child.

Regarding our <unk>.

Minor business, we've said have overseas operations and her who carry out the mining operations and other <unk> related business.

This quarter, our mining operation in Hoboken encountered multiple challenges.

Including contaminates batches.

Logistics congestion on the power supply shortage in the winter.

Which negatively impacted our mining machine online right.

We are closely monitoring the local energy supply situation.

Our stop on slides on making the effort.

Absolutely proactively communicate with our.

Partner to solve the problem as soon as possible. We will also be prudent in telling us additional deployment.

Sure.

T mobile one about one year with TNT is probably good ECM palila in school.

That's the one they're going run Mach one year old political so that you can count Italia.

Union, sending tricia that your pool.

Well <unk>.

You Couldnt Yoshi Hoboken, Guangxu geopolitical Schindler corridor channel Central Hong Kong yield resenting I don't have children.

T accounting and Lasalle.

Well, it's necessary for US also is that although our mining business in Congress.

Sure.

In the mining business is still one of our long term strategy.

With lessons from possibly feel is we will efficiently execute with the strategy. We will continue to leverage the advantages of our mining machines. The plot through expanded presence at a detailed collaboration.

Well I've been now make allocation of production capabilities.

Our production capacity is in Russia with the money.

Endeavor to further enhance the overall economic benefit of our operation.

Okay.

Uh huh.

Paul Condra, which anyway.

Yeah, Jeremy Gouge, you don't sure how accounting for that cohort two menthol Playbooks for Q1 group.

Since you know how youre doing agenda tell US you don't carry I'm sure <unk> can handle the cheap alcohol are kind of cool.

Zero in Chicago, and how about <unk>.

<unk> hurdle with hydrogel that one too.

Yes.

We remain steadfast in developed and developing our AD business in the fourth quarter feedback has been positive thus far and we are seeing.

And continued interest.

Customers.

Intelligent educational Hartwell smartphone batteries.

Although the application scenario.

Recently, we reached a strategic cooperation agreements with open analyst.

A leading open source operating system community and the innovation platform.

Currently for the development and application.

You saw the open all of those ultimately operating system.

<unk> hundred AI chip platform promoting localize the Oakland project in the field of SaaS computing AI chip application.

Youre welcome Brian .

Yeah Yeah.

We can never make sure they don't leave until now let's move to <unk>.

Santa Barbara agenda appears hometown the channel or do you have a hold on we should what kind of homegrown Sandro will need.

<unk> Yep.

Chinas once you turn around and by virtue of a jewel.

Regarding our RMB.

Sure.

In terms of our research and development.

We continue to expand our R&D team.

All the design capabilities.

We have achieved the ability to independently implement chip fraud and loss logging and background physical design.

Multiple otherwise the know how.

Probably the entire packaging heat dissipation and last production focus processes.

In the fourth quarter, our total number of R&D staff increased by 99% year over years.

Immuno oncology Keytruda journey La Concha Amanda. Thank you Tien <unk> will mean TV. We're currently finishing lap all holding against that from what you currently are in Charlotte central year formulated genre or that you showed your undrawn, even able to do so.

I think what you should you Shannon Chief Richard Cordray, and Jen Kubota anybody workshop.

8% is a self developed IP matrix and have established them, even more comprehensive self developed IP assistant.

Carefully protect the achievements of our R&D efforts with a range of active patent.

As of December 31, 2021, we have accumulated 156 also expectation 70, IC layout, the vitalize and.

105, Buffalo Wild copyrights.

But we're seeing that.

You can do something that will kind of go well not interest shingle Hong Kong won't you won't go Holla champion.

Oh, no I'm not worried denture drills shymkent hold can you control what.

You can turn this cultural bond tranche of Hawkeye purely as seen on T that Judy.

We also continue to make steady progress on a number of R&D projects for new generations of Bitcoin mining machine.

Dedicated we're cultivating the industry and providing better products for minor.

Going forward, we will close we will disclose specific pro forma barometer of new generation line emission only after we ship it.

Actually hey, Paul.

The food testing for the Lucky.

The deal with our clients we hope.

And what it could be your opponent, who I'm sure know Cynthia to wrong way, we don't keep them charterer.

Do you just want me doing bunch whole RDR Union <unk> Kidron, if we go to your model. So it won't go yeah. So madhu from once you layer on telling me.

We'll go into internationally and should not be you didn't see a hockey town 100 basis Ben.

We'll probably go decision on.

On a go slow to work with Chris.

Christian will talk about how we shouldn't look like what do you want to own a.

Of course right now.

<unk>.

Oh, absolutely continue to propel forward on our business.

We remain committed to providing value for our shareholders.

As of today, we have completed.

Purchase program approved in September 2021.

Representing.

Purchasing approximately $3 6 million for the total of one 3 million U S dollar.

The repurchase program progresses smoothly and we were able to complete the program earlier than the expiration date.

Clearly the board of directors will continue to evaluate new repurchase plan.

Multiple aflac.

We will keep you updated on any further progress.

Colin I just.

Our OEM women's I should kind of Guangdong, we're trading at in Colorado.

Yeah, Yeah yeah.

And lower <unk>.

Sure Josh Buttressing lobby.

In 2021, we achieved something.

And well and a strong performance despite various uncertainties and market challenges.

Testament to the efficiency of our strategy.

Execution.

Our capability.

No if we show them the tricky Jackson.

So no tissue Sim going to assure the T phone.

Sunil.

On R&D I know Youre Sugarman, Chairman, John Copeland, Oksana Union, surgical Swisher, Herradura and El <unk>.

<unk> haku consuming a good home being lifted Cuba would Columbia <unk>.

Resolved through control.

And then thought at Huntsville conduct kitchen Coppola puncture.

Yeah no sure.

Jim, but we only or should I assume that means puncture.

Which we didn't see linear.

Tricia will continue.

How near Chicago.

He's on our board on pure Hong Kong, either show my home up on yield traditional leaders with alpha.

In 2022, we remain committed to amplify our research and development capabilities.

Adding in chip design.

Improving product performance.

In 2022.

We will also probably hopefully enhance our customer orientation.

We shift our focus towards overseas market.

That is our presence across the globe, maintaining close communication and providing best of class services.

Becoming increasingly important.

To better serve our customers.

We are exploring more clients since it was a 12 hour product R&D manufacturing transportation and after sales services.

Additionally, we will further leverage our flexible and resilient operation.

And maybe some market uncertainties.

We will continue to mitigate the impacts from marquee volkmann.

<unk> fluctuation with steady supply and secure production capacity as.

And to maximize our profits through strategic balancing our mining machine itself a mining business.

Good morning, Tom.

And upon doing that.

As I already army to do consistently over short terms that I couldn't be sure with Australia.

It sounds like you already are in the 80 to one.

But it's not about tissue.

Uh huh.

Craig it's going I'm sure also consume with Shan there Chicago dancing Concord will you achieve treating Paula Cardoso, Oklahoma.

We expect our total net revenue in the first quarter of 2022 will be in the range of RMB. One so the 500 million or RMB one saw the.

600 minutes.

Presenting on inflows of 275% to 300% compared with the software quarter funding a wash.

Please note that this forecast reflects our current and preliminary.

All of the market and operational conditions, which are subject to change.

Well, it's just hard to not really.

Jaime Ellertson photons.

This concludes my prepared remarks.

I'll now turn the call over Flowers' CFO Jake.

Thank you Mr. John and Hello, everyone. This is Jim speaking.

Despite a volatile market environment and the various challenges we achieved another robust quarter with solid financial results from top line to bottom line.

In the fourth quarter, we delivered the computing power solar of $7 7 million type of question.

Representing a sequential growth of 15, 5%.

Our total net revenues reached RMB $2184 6 million.

Up to 65, 8% quarter over quarter, which was 15, 8% higher than the upper limit of our previous forecast November .

For the full year of 2021, our total net revenue reached RMB 4986, 7 million up more than 10 times year over year.

The good top line results came from our record high computing power so and.

And the responsive delivery as well as our effective pricing strategy that enables multiple cells driving higher average selling price.

Additionally, our effective business development across the continents helped us record.

Strong contract advances of RMB, $1348 7 million as of 2021 and <unk>.

Ensuring substantial cash inflow and a steady revenue recognition for quarters ahead.

Our gross profit for the quarter was doubled sequentially to RMB 1486, 9 million and the gross margin rate.

68%, which is an outlier in the past four quarters.

Gross margin rate for full year 2021 is the <unk>.

57, 2%. Please note that coal mining machines delivered during the fourth quarter, we secured the correspondent wafer cost for several quarters earlier.

From the ongoing demand and supply imbalance across the semiconductor industry and the feedback from our foundry panels, we expect wafer cost to price increases in 2022, which will have an impact on our future gross margin rate.

Regarding our bitcoin mining business as of December 31st 2021, we have 113 million <unk> computing power deployed ex mining firms.

As of the 2021, and we sell to 75, bitcoin with a carrying value of RMB $23 million.

Our AI business revenue achieved RMB, five 5 million in the quarter, representing a year on year growth rate of 153% and our sequential growth rate of 29%.

We kept getting positive feedback from customers the different industries.

And then we newly cooperated with the equal system platform partner Hoagland analyst.

Research and development expenses were RMB 100 itself points here one minute.

Increasing by 179, 6% year over year, and 28% quarter over quarter the.

The increase was primarily attributable to the increased research and development costs for new products and new hires New research and development team. We will continue to invest in R&D to advance our technology capabilities.

As a result of our strong revenue efficient operation and expense management, we realized record high net profit of RMB $1196 5 million for quarter, four representing a sequential growth of 114, 6%.

Yes.

For the full year of 2021 net profit achieved RMB 2000 3 million lung.

non-GAAP adjusted net income was RMB $1250 7 million for quarter four.

Representing a sequential growth of 112, 9%.

For the full year of 2021 non-GAAP adjusted net income mostly to RMB 2300 is the other $1 6 million.

While we are very pleased with our performance achieved in quarter four and in the full year of 2021, we are fully aware that the existing challenges may persist and new challenges may emerge.

This time to same kind of plan the new year in a prudent way I would like to talk more about the risk factors and how we tackle them.

From a market environment perspective, we are in the fed interest rate hike cycle for U S. Dollar the pace of interest rate increase.

And we'll continue to have an impact on bitcoin price fluctuation on.

On the other hand.

Geopolitical conflict, even military operation.

Also operating further uncertainties to bitcoin price fluctuations.

This comprises closely linked to the demand and the price for our mining machine. Its fluctuation always has the impact of minus <unk> willingness to expand expanded their mining skills in past quarters.

We continue with the beauty offer the capability of flexible allocating group among contract Phil spoke of and the mining operations.

<unk> sees the opportunity during the bitcoin price fluctuation and to maximize the average selling price and the overall value.

Okay.

On the supply front.

Given the ongoing wafer demand and supply imbalance across the semiconductor industry.

<unk> price increase.

We expect our production cost to screw up and bring pressure on the gross margin rate.

To sustain adequate wafer supply we have been actively communication with our foundry partners and secure that the production capacities with considerable amount of cash prepayments.

We will also continue to support our R&D team to further improve product and better utilize wafers to have higher product efficiency at a lower cost.

For our bitcoin mining businesses, we'll manage that to deploy our computing power as scheduled and we encountered unexpected winter electricity shortage in both quarter, four 2021, and a quarter. One 2022, we closely monitor the local conditions involvement.

And it will continue to be cautious in deploying additional computing power.

We are also actively evaluating target markets to diversify operational risks.

We are aware of the all the stakeholders and will remain resilient in the mining business as one of our strategies.

We are also aware that some investors have questions about the mid teens as a U S listed Chinese companies.

<unk> is different from some other China companies listed in the U S. We are not under a <unk> structure.

And we are running of <unk> business with markets and the corporate customers, mostly located outside of China.

And our principal business activities do not involve large numbers of religious tivo user or deal with vast amount of user data.

Additionally, there is still around two year window before SEC give us the final decision and things may be sorted out before then considering SEC and obviously are working closely to figure out a better solution.

Ultimately as a listed company payment has been permitted to operational compliance and continue to optimize this management operation and the corporate governance.

It takes.

Good Black Smith to make steel.

Despite all the challenges ahead, we are confident in our effective strategies solid execution.

Well as our nine year experience in the industry.

We will keep sharpening, our R&D capabilities and stay vigilant and to proactively mitigate risks with our dynamic operation.

Now I would like to briefly walk you through our financial results for the quarter.

Total net revenues in the fourth quarter were RMB $2184 6 million compared to RMB $38 2 million of NPL results 2020, and RMB $1317 6 million in the third quarter of 2021, representing a sequential increase of 65.

8%.

Gross profit was RMB $1486 9 million compared to RMB $9 1 million in the same period of 2020.

Resenting, a sequential increase of 105%.

Total operating expenses in the fourth quarter of 2021 were RMB, two $273 7 million compared to RMB $80 1 million in the same period of 2020, and RMB $278 4 million in the third quarter of 2021.

Income from operations was RMB $1213 2 million up 161, 9% sequentially.

Net income attributed to ordinary shareholders was RMB, one traveling in the $196 5 million up.

114, 6% sequentially.

non-GAAP adjusted net income was RMB $1250 7 million up 112, 9% sequentially non.

non-GAAP adjusted net income or loss.

Share based compensation expenses.

Basic and diluted net earnings per ads for the quarter were RMB 690, and RMB 681, respectively.

As of December 31, 2021, the company had cash and cash equivalents of RMB $2684 2 million.

586.0% compared to RMB $391 3 million as of December 31, 2020.

This concludes our prepared remarks, we are now open for questions.

We will now begin the question and answer session to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Our first question comes from Shuang <unk> with <unk> Securities. Your line is open.

Hi, Hi can you hear me.

Yes.

Oh, hi, there.

So from the question with the current team.

In early 2022 we saw the big coin price experiments a dramatic drop.

So what was the impact on yourselves.

I'll go into a measure of your incremental dollars to mitigate impact.

Early on you.

Easy to require women condo, because he does not Glenn you'll even after the cat D J.

The social humility and this summer.

Kind of arguments where she lives here John .

Yes, yes.

Okay.

Okay.

Or should make a close lid on our goals.

And Nicole DVT, the honeywell's usual.

We don't.

So you're in a woman something I hope you don't keep only CHF one one.

Tricia in Oklahoma between childhood, which Andrew will accomplish our dealer sharona.

Coca Cola light.

Which are going.

Can you do with them on a child.

Tony I photo quality easy to achieve here.

The countries showed our daughter shoulder with transition year.

To touch.

Well I think it was hanging out okay, let me translate.

So we are still in the first.

Okay.

Okay.

Thank you.

Okay.

Okay.

Okay.

Okay.

Yeah.

Okay.

Okay.

Okay.

Generally have.

The other deal.

Doesn't mean they buy it.

Yourself.

Historically, the first quarter is also traditionally the off season and production sales are usually lower due to the holidays.

The increase was.

New year.

Chinese new year.

Dr. Tien <unk> to haul in Ohio, we didn't push we soon.

It seems the accumulative Gulfport Shin young woman digital <unk> not.

Tad Shanghai Kwangju Socials.

Convenient selection on a tissue sent that to.

There's no coke zero entre aluminum coil tubing, how quick one on top of everyone's withholds.

For example, <unk> com Sheila it would hurt them.

I didn't actually than the people who have reported 100 also the social with Jamba was hold on what's wrong with that.

Good morning.

<unk> Hello Tito.

<unk> Yokohama.

However, there are other factors at play during the first quarter of this year.

This primarily includes the continuing industry wide supply shortage of chips and mining machines caused by a minor role in the deployment of mining machines last year.

As clients tend to be highly institutionalized.

Institutional clients hold a long term horizon in terms of financing and investment activity.

Therefore, the price fluctuation in off peak flying during this period.

I had a little impact on our sales price and sales volume.

Our guidance for the first quarter of 2022 reflects our forecast of performance.

Oh sure now who can work with total torture on Iot and simply not how do you tie that off my Utah.

Sure.

Do you see the quarter actually that's reduction of Copel <unk>.

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With linearity.

Doug I appreciate your crude I won't bother to go 100, you are not sure when the <unk> wanted them.

That's a whole non rukwa four P 19 portal Johan <unk>, who can do Shrontz you won't be Omaha.

<unk>.

We went and Ctrip together.

Chip chemo hometown shield once either neutral.

Meanwhile, we are mitigating the negative impact of the price decline through a variety of measures.

Sure we are accurately funding a new channel to reach new clients well.

Second we leverage future contract and reduced inventory pressure as evidenced by the stable future contract relationship that we have with a number of lots of mining harmony.

Finally, the quantum class continue to fall.

Depending on the attendance and market conditions. We will also other just the allocation of flushes between inventory and mining deployment for better long term and short term revenue.

Tricia.

How does it hit me that.

Yeah.

Thank you. Our next question comes from Louis <unk> with Benchmark Company. Your line is open.

Oh, hi, Thanks for taking my call congratulations on a very strong quarter.

My first question is for the management is could you. Please elaborate on your progress on Pam on your computing power deployment for the mining business.

Sure.

Hello.

Paul.

Hello can you hear me.

Hello can you. Please translate your question into English.

Sure sure sure.

Sure.

Oh sure sure.

That's a good one target with a strong.

Okay.

Brian from Tokyo.

Yeah.

That was just a way of life.

The corridor.

Sure.

Uh huh.

Sure Joe.

<unk> Union Shar, you're essentially year or no.

Well, we don't push with alcohol suddenly you've got you're trying out new one Keith.

Gendron our Rd.

Our near our Yorkshire burner, when you don't go through Sandy for all of our central balance sheet.

Tricia and the hiring just want anytime that's helpful.

Or is your coke one that's undergoing surgery.

Hello, Paul.

Right.

As of December 31st 2021.

We had a 1.1 hundred 26 million pair of hash of wining computing power and the deployment.

As of February eight two.

2022.

Tom you want to.

This horizon to 238 million higher a hash of mining computing power under deployment.

We are currently in the process of deploying more computing power.

<unk> potential for a mining project.

And then finally, the quote unquote refugio.

<unk> alright.

Just wanted to kind of how should we think about <unk> how rockwell.

Suddenly there you go.

Comparatively.

We will get a jewelry now for the way you treat on a contrary to G. Now so it could be a function.

Newmont elements.

You are teaching us a pianist your all your key European markets.

In the future, we still continue to increase the deployment of computing power to our alignment with it.

But we knocked us either rapidly increasing our computing power.

As a priority.

We'll.

Deployment pace, well balanced allocation between future sale.

So aligning computing power.

This way, we started to obtain maximum value and avoid potential list.

In addition ownership deployed in our mining business.

And also will be reallocated to a box sale.

Oh, sorry.

Akshay.

Okay. Thank you. Thank you. Thank you for the color I do have a couple of follow up question and I will go ahead and ask the question in English first then I will translate them into Chinese myself.

My second question is in terms of our computing power deployment.

In the management's opinion, what is the company's moat against competition.

Why do you send that child to life as usual.

Somebody else can see.

You get a chance that that inventory is all that again goes to the whole to include actually similar.

How could we look entirely linear.

I'm going to try to avoid it.

Tier two the Hong here that you go to home goods.

So ginger tinea not words.

So it sounds like you're talking about.

Hmm.

So I'm glad you're going to hire in our shoulder deleterious John Thats like the all.

The government deemed trigger suitable familiar in them.

So it's just been a father sooner hachioji over to Javier.

Central and regional could you Antonio.

Thank you so much in Canada, this year and finish at icon.

That is yes.

Sure.

Cannot harvest she all Purion Bouchard champion D&O Tango Tango two data to go to college.

Shipyard Xiaomi will be rock homes Hanjin shipping.

Well the future was wondering I'm sorry.

Although the autonomous opportunity.

Currently there are no hall switches yeah, yes, we do.

The champion of $3 10 back to the call.

So that change was on the Eagle Eagle for Encore.

When compared to the more of a vibrant blocks in the industry.

Our industry competitive landscape.

It's become more stable.

Here.

There's a reason for that.

Recently, some very large companies have started to enter the industry after years of planning and preparation.

However, based on our analysis of their Florida, so far they still need the substantial improvement in order to be competitive in the market.

Niche markets of industry, such as the big mining ship.

Our team has accumulated extensive technology.

On the call.

Great.

No hub over many years.

By leveraging the strengths we have developed our products.

Our industry, leading level, thereby forming the company.

People format.

No.

Sure.

<unk> nano and so forth.

Yeah, and again well done.

Johan.

We achieved a panel.

Personal luxury boats.

Towards your targets.

Oh man.

The woman novelty Giro Sharia general and see any of the quote tool set.

Is that currency change in crude products have known.

No.

Should we build bondholder newmont.

Humana with me or Tim calling attention to openly problem in oncology.

Upon the falls church slowed into the tunnel.

None of them are.

Our non union crusher kind of lock on yield.

How does he go chipotle because he is one of them and they will I don't want to they pay Bondswoman Shapiro polymer ammonia in the future.

In addition, we continuously solidified and optimize our supply chain over the past a few years of operation.

Our multifamily partnership strategy powered by our strong technology and RMB capabilities.

<unk> has enabled us to build cooperation with several competitive longer tenders.

These partnerships allowed us to secure production capacity with otherwise to note.

Our effective cash management also allows us to lock in.

Our properties through otherwise otherwise.

Advanced payment in a timely manner.

In addition, our bitcoin mining business launched in 2021.

He will also help us mitigate the supply chain risks in the future.

Oh, because at that time.

Can you kind of highlighted for you Tom.

Coca Cola Coke political violence.

Super Hornet, your timeshare, Oh, Hello, Moshe that's onetime.

On the social following their whole alcohol.

So how concerned are treated equally.

Well, we always hear Yoshida Gibeau, Quantico, Kona Patricia that football soon.

200 <unk>.

Sure no worries.

The hardcore future jobs, particularly shinnecock once Gen Nicaragua.

As we strive to expand our business globally, our customers and partners have become more diversified.

<unk>.

Such our collaboration model has developed.

More.

All of our mining less human cells.

<unk>.

Creating a deeper win win proposition.

Also see that some of our large scale institutional mining enterprise customers.

To refresh.

The repurchase for us.

Warming long term stable relationship.

At the same time, we are constantly exploring new geographic markets.

Establishing cooperation with new customers.

We're literally in Washington, and I'm sure you got to make sure. It's open according to you.

Teaching jugal conditional it'll be about calling the Iranian Egypt actually kind of shortfall.

Here, we present, a tree order itself with someone called literal quantity.

Let's see if I'm not sure.

So shy in Watertown, Lenovo Guangdong towards Hopper.

Our business model with chip design as a core technology.

Selling.

Is that in many mining machine.

Operating before mining visit I'm, selling AI shapes, our businesses complement one another and combined with our underlying technology.

Correlate continuously self reinforcing business model.

Jackson will join the airlines, what I'm, saying you got group with an approach it triggered a young woman theaters hunger strong local and then <unk> the phone.

Fruitful agreeing to neocon elite.

Nicole the headquarter to humans.

The first half of <unk>.

You will tell you that so far from here.

In addition, we have accumulated extensive operational experience and.

The capabilities from the upgrade of the supply chain.

The downstream market.

We operate in Europe .

Cycle, so significant speak by volatility you mean, the top line yet.

We are able to respond to changes in the market and be quite a bit with flexible lips operational adjustments.

Typically mitigates risk and opportunity.

It's a whole new element until they have to go out and they were comfortable so.

So you and your liquidity of Pudong and talking to our opinions.

Oh man Anglo Eastern therefore, the computer room, so that should all quit.

Lots of Lollies.

It's a U S listed company, we are more pet parents.

Compliance in terms of company operations.

Governors and the disclosure at the same time, we also have access to more financing options and opportunities.

So anything you're trying to go from in the <unk>.

Commentary, but kind of a quasi advancement globally at all that you got.

So on the lithium as you go up quarter on quarter.

Okay.

So to answer your question this factor form our multi layer a competitive moat.

Hope I answered your question.

That's very helpful. Thank you just a couple a quick couple more quick follow up question.

Well first of all could you please share some color on kind of market share.

Ken This is Tom sorry introduces wash off.

Yes.

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Elena two factors on that.

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<unk> to European finance that Tees, and shorts and you've touched on this yet.

Vocal neocon.

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I think it was.

Hong Kong.

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Kona R&R.

Our union until Congress acts of hydro.

And I'll start with you.

But you didn't mutual Youll R&R Union dialogues I didn't hear you.

So anything Youll deal with Johnson <unk> nanometer women don't you shrunk it feels like you showed up.

That's a cute either short or long, it's your own with Leo Chen.

If you go to Chicago, and so you're going up and they'll go to a higher she won't go below a dollar tree.

Great.

Okay. That's helpful.

Previously we generate estimated.

We estimated our market share according to our computing power so.

And somehow network hash rate in the corresponding period.

However in 2021.

Year fluctuation of the network hash rate made it difficult to estimate the market scale.

Specifically mining mining machine offline.

Targeted their physical locations.

And connected online back and forth.

Due to regulatory reasons.

Nevertheless in 2021.

We achieved 22 three that cash in total computing power source.

Compared with $66 six <unk> in 2020.

In 2021, our total revenue reached nearly RMB.

Slide 12, 1 million compared with RMB.

400 million in 2020.

Therefore, we believe we gained some market share to some extent.

And hopefully we can have guidance from professional market research institutions for those spaces.

Vic Viegas.

I hope that answers your question.

Okay. That's helpful. Thank you I just one last question.

I know the management has just talked about share repurchase plan does the manager might have and the stock dividend program or plant in mind.

I'll translate that into Chinese.

Type one is to ensure the guys.

She was a partner like Ocado.

He was the number.

20th century.

Sure.

Sure.

Thank you.

Hi.

Sure.

Don't forget also that shrunk super comfortable with two powerful nutritional clubs tender.

Sean it's G&A growth in golf ball.

Okay.

Aging pizza one come up.

How would you characterize kind of a true real quick what clients want to close the transmission.

Well enough with I think Sheila Patricia penchant for.

Real quick if you don't see Cheetah <unk>.

I'll quit with all to go below Cushing <unk> closer to what you're doing with you.

Before I recognize our execution in the lasers the share repurchase program.

The early completion of our share buyback plan demonstrates the long term copied us.

Both the board and our management team.

We are evaluating the situation on a real submits a new stock repurchase proposal to the board accordingly.

We will make a formal announcement was the proposal is approved.

Our non union there sure <unk> syndrome.

Centered on a series of pulling on all lines.

We'll do that soon.

So I'm Gonna go Chris.

Sure Shuda, Joshua Legit tuned up tick.

Tickets undrawn shall come toward our <unk> hot hole through the strong Florida.

I couldn't do that through the year.

A quick one on coupons.

What you don't know the harsher in Guy.

One woman who own them.

Based on how much you've called out <unk> Gotcha Gotcha.

Okay.

'twenty, one so our rapid growth.

And we will Florida had further.

Look forward to continue.

If that is a growth through our best endeavor.

To fulfill this goal we need to invest more into our RMB further enhance our market development.

Our business and optimize our services.

We are committed to generating more for our clients and the shareholder.

Driving mid to long term value.

Well that answers your question.

Yes. Thank you very much really appreciate it again, congratulations on the strong quarter.

Okay.

Okay.

Thank you and that's all the time, we have for questions I would like to turn the call back over to management for closing remarks.

Thank you once again for joining US today. If you have further questions. Please feel free to reach out to their contact information.

It on our website.

Yes.

Thank you that concludes the call today. Thank you everyone for attending you may now disconnect.