Intchains Group Limited Q4 2022 Earnings Call
Good day, ladies and gentlemen, thank you for standing by and welcome to insurance fourth quarter and full year 2022 earnings conference call.
This conference is being recorded today Tuesday April 18th 2023 if you have any objections you may disconnect at this time.
Joining us today from <unk> are the company's chairman and Chief Executive Officer, Mr. Cheung thing and the company's Chief Financial Officer, Mr. Chao of yen or.
On our call today, Mr. Deng will give you an overview of the company's performance Mr. Yan will share the details of the company's financial results.
After that we will conduct a question and answer session to take your questions. During the question and answer session. Mr. Zhang and Mr. Yang will deliver the ounces and Chinese and the company's representative will provide corresponding English translations.
Before we continue I would like to remind you that some information discussed on this call will contain forward looking statements.
These forward looking statements involve known and unknown risks and uncertainties and are based on the company's current expectations and predictions about future events that the company believes may affect its financial condition results of operations business strategy and financial needs.
The company undertakes no obligation to update or revise publicly any forward looking statements to reflect subsequent occurring events or circumstances or changes in its expectations, except as may be required by law.
Although the company believes that the expectations expressed in these forward looking statements are reasonable it cannot assure you that such expectations will turn out to be correct and the company cautions investors that actual results may differ materially from the anticipated results and encourage encourages investors to review other faq.
Does that may affect our future results and the company's registration statement and other filings with the E. C C.
With that I'd like to turn the call I've asked Mr. Jiang Zhang the Companys, Chairman and Chief Executive Officer. Mr. Deng. Please go ahead.
Okay.
Thank you operator.
Well Jordan the.
Jim O'neill Conference call.
Well cotton.
Well, yes.
Jude.
In this call.
We will provide the overview format.
Pauses.
Fourth quarter.
Oh <unk>.
After that.
Our CFO .
We don't see all that detail of the company.
Yes sure view.
Finally leaves me I'll conduct a QF.
Stacy maybe your.
Question.
The cryptocurrency industry.
Several people.
<unk> involving company such as Taylor.
Capital.
F P.
In the fourth quarter you tend you.
It can be true.
And Duffy.
Yes.
Purely on leave.
With less.
Volatility.
Yeah.
Could it continue to was also a challenging year for sure.
Volumes are rising woman.
Ken can you.
Leasing book.
Hi.
Impacted by the industrial downturn cycle.
We achieved revenue.
<unk>.
474 million you can see it can be too.
Our gross margin.
Hey, its June 18 to finish.
We see comparable towards that.
<unk>.
Yeah.
Our net income.
355, maybe.
Our five looking five product portfolio strategy.
Allow us to meet our customers' needs.
By adjusting our product right.
Thus, we will be able to you Kevin repeatable for the golf course.
Despite COVID-19.
Favorable market conditions in the fourth quarter 2022.
We accumulate revenue.
So Q3 pardon me.
Net income.
Telecom seven meeting.
First quarter 2022.
<unk> was in line.
The amendment.
Patrick.
In 2023, we completed our initial public offering Oh, we're meeting what have you. The 40000, Bob how do you look at it.
Yes.
On the right posture.
The overall allotment option.
Two.
Additional ideas.
We are delighted with the success of the Albany.
And I appreciate it.
Women and continue the spot Hello.
The proceeds from the initial public offering.
Before does that can you give me a little development.
Our CFO and COO.
Platform.
Hi.
Our belief.
Gotcha.
Yeah.
Okay.
Okay.
Despite the current volatility in the crypto Carlos industry Saar.
So to the degree of price.
Overall.
We believe this year will be.
Whereas the.
<unk> our COO.
To illustrate format.
Through the cycle.
Yeah.
Meanwhile.
Can you do.
In logic investments.
Completely.
Large new exciting for that one right.
We have.
Our belief is.
Gotcha.
We believe that we would be cash flow matched our puny.
Create long term value for our shareholders.
We greatly appreciate it.
We continue to support for our company.
At this time I would like to turn the call over to our CFO .
Probably yes.
A detailed overview of the financials for the fourth quarter.
Well, yes.
You won't be hospital medicine.
Please proceed.
Thank you Lisa good evening, everyone on behalf of the management team I will provide a brief financial overview of the fourth quarter and full year 2022 let's first take a look at the financial overview for the ballpark.
Our revenues were down 888% to RMB, $33 7 million or U S. Dollar 549 billion in the fourth quarter, such decrease was primarily attributable to the continued a broader decline of the cryptocurrency market.
Which caused the decrease in the sales volume and average at five of our ASIC chips that are primarily used in cryptocurrency mining machines.
Our cost of revenue was down 69, 9% to RMB 20 million or RMB, two 9 million in the fourth quarter, which was in line with the decrease in the sales volume of our ASIC chips.
Our total expenses down 66, 4% to RMB 12, four 7 billion all U S. Dollar at one 8 million in the fourth quarter.
I'm really due to the decrease in research and development expenses.
And that our research and development expenses.
Down 64, 1% to RMB 10 million or U S or U S. Dollar $1 4 million in the fourth quarter, primarily due to the reduction in the raw materials and the tape out expenses in connection with our research and developmental projects.
Our sales and marketing expenses down.
8% to RMB, one 1 million or <unk>.
0.1.
Six 1 billion in the fourth quarter, our general and administrative expenses down 81, 2% to RMB two RMB, one 7 billion or U S. Dollar General Board.
Zero parts, two 5 million in the fourth quarter, primarily due to a decrease in tax surcharges and professional expenses.
Other income.
46.
464690, 747% to RMB, $10 6 million or U S. Dollar at 1.5 media in the fourth quarter, primarily due to an increase in government grants we received from the local government such government.
Well granted to us to support a qualified projects in industrial with no repayment obligations.
As a result of the Florida growing our net income was RMB $12 8 million or U S. Dollar $1 8 million in the fourth quarter.
Our basic and diluted net earnings per ordinary share was RMB one one.
Or are they look like they're at $2 in the fourth quarter. Each ABS represents two of our company's class a ordinary shares.
No.
Let's look at our full year 122 financial results.
The revenue for 2000 22020.
<unk>, 5% to two.
RMB $473 7 million or U S. Dollar 68 7 million in 2022.
I'm really due to the decrease in the sales volume of our ASIC chip, which was in line with the broad broad decline of cryptocurrency market in California.
Cost of revenue down countries where employees.
Percent to RMB 87 billion or U S. Dollar swap 12.6 media in 2022, primarily due to the decrease in the sales volume of our ASIC chips.
Operating expenses down 9.3% to RMB 624 million or U S. Dollar 93 media in 2022 primarily due to the decrease in research and development expenses.
And then the research and development expenses down 9% to RMB, $48 4 million or U S dollars 7 million in 2022.
I'm really due to the reduction in direct materials and tape out expenses in connection with our research and feedback from the project.
Which was partially offset by increased staff cost of.
Our research and development personnel, our research and development expenses as a percentage of our revenue was 10, 42% in 2022 as compared with eight 4% in probably about a one.
Sales and marketing expenses.
Uh huh.
35, 4% to RMB, $4 1 million or U S. Dollar 0.6 media in 2022, primarily due to the increase in staff costs South Park.
Sales and marketing personnel.
And marketing expenses accounted for less than 1% of our total revenue in 2022.
General and administrative expenses down.
18, 8% to RMB.
11, 6 million or U S. Dollar 1.7 media you can probably tell you too.
Primarily due to the decrease in tax surcharges and the listing and professional expenses.
And administrative expenses accounted for two 4% of total revenue in 2022.
Other income up to RMB, 29, 8 million or U S dollar $4 3.002 million 22.
I'm really due to the increase in government grants, we received from local government.
Net income was RMB 355, 2 million or U S dollar $51 5 million in 2022.
Basic and diluted earnings.
<unk> per share was RMB 3.02, or U S dollar or U S. Dollar 0.44 in California too.
As mentioned by Mr. Tim currently we can see some improvement in price of the peripheral currency, which work well gradually boost our performance through customer orders.
Our rally during the fourth quarter of privately three to be approximately RMB 26 million. All U S. Dollar reported 8 million looking ahead, we remain confident that.
Although we may do encounter certain near term April macro economic uncertainties, the long term opportunities in global markets remain abundant.
We'll continue to invest in research and development of new product and business expansion.
The market opportunity and strive to create long term value for our shareholders.
Thank you for your continued support and we look forward to updating you our new progress in the future.
Now I'd like to turn the discussion over to operator for any questions.
Ladies and gentlemen at this time, we'll begin the question and answer session.
I'll ask a question you May press Star then one on your touch time fine.
If youre using a speakerphone please pick up your handset before pressing the case too.
What's your question. Please press Star then two.
Your first question comes from the victory a private Investor. Please go ahead.
Thank you so much for your presentation on that I could share with us what's been your company's R&D and your strategic plans for the upcoming year 2023. Thank.
Thank you.
Hi, Thank you for your question My name is Jim I will translate the questions and answers to both party for each question, we will take about a minute to think about it and then begin to answer it Mr thing, we're prepared and answer these questions.
Life Geyser that wouldn't you should consider our son Nguyen.
So I'll tell you too hard or too sure somebody on the change and they have laid out.
Well.
Okay.
This is Tony.
Joe that you called out.
Chicago casually, but shouldn't the rule, but suddenly you're calling it.
Actually the three times I'll cheat.
GDP tablet.
Oh, sorry.
Solid sheet.
Keith.
Bogo PTC.
OTT.
<unk> been going through Jesus agenda it yesterday.
The Westbury industry, which blockchain technology.
The call is it still in a very early stage.
Tablet based crypto currency mining is the infrastructure for early blockchain application.
Including bitcoin, let quint and ethane before changing the consensus mechanism.
Change issue.
Fool you.
<unk> gone from the Chinese shipyard.
Seven two times EBITDA.
She little tiny it shrunk in the XI product.
<unk> pulls the teeth of the tissue.
We don't what events you should product.
Yeah.
If I may if you can assume that gee.
Yeah, even though can do the particularly cool cool.
Hi.
The high performance computing chip is a part of the block chain industry, which service the cotwo consensus mechanism.
The diversification of the technical format of the consensus mechanism.
It's continuously developing with a continuous defined equipment of industrial innovation.
Industrial innovation provides more new opportunities, but also bring more in centers case and the possibilities at the same time.
Yeah.
Jude change through the Qing Gong Julian to Utah.
I'm pleased to loosen the Washington elite.
Yes.
Do you Shinjin, Guido Goshen and shipping.
Shine the light engines.
She can talk on the shoe called Yeah, Yeah right Jim.
Just a woman.
Could you please with that.
And one more jumbo wangfujing she's looking back.
And you could feel it.
Leveraging our core competitiveness and the expertise.
The chance group provides integrated solutions, consisting of high performance ASIC chips, and ancillary software and hardware for blockchain applications.
We are conducting RMT of our product offerings.
Our longshore and Ashish platforms.
To come in the door pure Diablo Canyon, Brian Shea.
Sure.
Yeah.
Good idea.
Completely.
Sure.
Could it be.
For all of our products perspective P. O W products are still our core business line and a source of revenue in the short term.
But we also expect to increase investment in other business and other blockchain business films.
Because he things on our plate arching than that Gary <unk>.
For your counsel Lesley Mr. King has finished the offering of the first question. Please ask two please ask the next one.
Thank you. Your next question comes from Dianne Malka, Glenn a private Investor. Please go ahead.
Okay.
Hi, Thank you for your presentation I actually Hum.
I think my first question is.
I would like to know whether you anticipate.
Challenges in 'twenty, one need to eat and what would you Oh.
Or would you do you plan to cope with the challenges from the competitors.
Thank you.
Yeah.
Thank you for your question Mr thing, we're prepared and answer your question.
Yes.
Uh huh.
<unk>.
For the army.
Me and Linda Tien Tsin, Hi, this is Jonathan.
Sure.
You can do a 10 years of a charger.
China.
Sometimes we receive anthology.
So you can do.
Okay.
<unk>.
While mainland China.
The two charts answer.
Jim.
Uh huh.
Sundar.
Yeah. So we've had a tremendous uncle Cooper.
Thanks, you bet.
How much is it ingo.
The blockchain industry.
It is still in its early.
Early stages with dozens of opportunities and a large marketing capacities.
We believe the biggest challenges in the blockchain industry other imperfecta supervision and exploration of business models. After the full integration of a new blockchain applications and existing operating format.
The caution that you've touched on the <unk> zone.
Between Gleevec in the shoulder.
Ginger.
Tianjin <unk> summit.
Oh My God.
Sure.
But Jim to Egypt.
John I'm, sorry from the quarter.
Hi, Sean.
Kim.
With that.
As for computing power chips, the competition between different operators and the processes is it relatively only in the field of chip technology.
We believe that a deep understanding of club chat application and as a percent of value recreation or the core.
Competitiveness.
So I caution the T shirts from Boston.
Jim.
Just wanted to try.
Tien Tsin gloomy.
Shouldn't be done.
This is amit.
It should be judged on the Jubilee.
And then somebody you want <unk>.
Yes.
But also allow me Susan Egencia dollar churn through the tool.
Could you have a slowdown from the southern region.
Okay.
Well, Mike did you want.
Changes in Kinder chairman kind of awkward.
Well, Jonathan shoes will soon change in Greek yogurt.
Okay.
In the sale of etch PCA algorithm cheap our proven proven chicken records indicate.
Our team has a strong competitiveness in the implementation of otherwise the tech knowledge other is I'll cheat and other technologies.
We have achieved a remarkable result is the department of 22 nanometers, Essex cheat.
Which allow us to compete with 16 nanometers and the chaff nanometers ASIC chips.
We have also completed the <unk>.
Comprehensive can find them in the process of some advanced technologies chips.
We will be able to quickly use advanced the technology to complete the tech out according to the market situation.
Hello.
On the country.
Agenda.
Surely.
Johan do achieve.
You can do sort of a woman.
Would you want to.
Good to see you soon.
Leave it to that.
Susan can do the hard tissue.
Yes.
But.
We will be.
See that truly shines.
<unk>.
Being in the.
Paul.
Finally, our team has extensive knowledge of the blockchain industry.
There are many subdivided industries in blockchain applications.
Potential opportunities for us.
The improvement of our technological capabilities is a key component of our development.
We expect to further enhance our capabilities in more cross border technology research and development. We firmly believe <unk> group is that we are positioned to explore and capture new market opportunities in the future.
How can she things on their plate.
Net income based on doing Chi.
Thank you for your for listening Mr. T have finished this question. Please move to next one.
Hi, Thank you I'm, sorry, I still have one more question what is the transformation.
E T edge from P. O W. E T O N E.
We expect to see any change in the company's future strategy development plan.
Thanks.
Thank you for your question Mr thing, we're prepared and answer your question.
So I don't think you should.
Can you kind of compute up you try and sell the asset.
Once they were lighter triennial position before you start seeing things being.
Being played out.
Yeah.
Computer blue clients pulse of the goodwill.
You bet.
<unk> hardly ghouls, who jump.
On June .
Since the downturn.
But what I had thought that tenure.
Sure.
When tenants and go to the agenda.
Yeah.
I mean, that's pretty exciting.
The E Vita farther in shoes.
The transaction.
I'm sure as has been planned five times 18, and the completed in September 2022.
And then we all can see the change in around the 2023.
So this is information with the surgeon future department the treat of this industry.
Hey, good meal slippage in the single pill count.
<unk> agenda.
You mean policyholders unchanged.
Sure. So as you walk on that too.
Yeah.
Yes.
That's helpful.
So I was trying to get.
And on the <unk>.
<unk> reduced the Indiana seasonal.
Sure.
That too.
Keith Pfeil Kuwait.
Okay.
For new public chats without a consensus background P. O W is still one of the powerful choice. It because it provides security decentralization and the fairness.
At the same time there are also many blockchain applications that are importing effective computing power to so the extra need of subsidiary <unk> applications.
The cheap based hardware system, we're continue to play an important role in the future development of the blockchain industry.
Yeah.
Yes.
In two minutes.
In two minutes.
So dish Needlewoman, Scott do pure dominant with even from the Chinese continue.
Li relied that shortly.
Q3 also.
Jim So you don't see it.
So let's do that.
The only way to go in the fall.
Yes.
<unk>, possibly either.
Because of that.
And the chance group, we are continue leveraging our expertise and experience in P. O W. Based blockchain applications to provide hardware and a software system solutions for future blockchain applications.
And get a chance group has been committed to having a comprehensive plan for the future development of blockchain.
P O W has never been the only one choice for us.
Hawkeye sitting on a way that gene that interim data you mentioned.
Thank you for your careful listening. Mr. Thing has finished last question. Please ask the next question.
Your next question comes from Avis Smith, a private Investor. Please go ahead.
Hi, Good morning, Thanks team I got two questions today. The first why could you. Please share more details about the outlook for the first quarter of 2023 financial performance all the full year of 'twenty three performance. Thank you.
Yeah.
Thank you for your question.
Ah prepare an answer to your questions.
Single sign on one key issue corny Marathonian QE.
<unk> considers how truly dream.
Our opinion Shania nuts, how would you see.
Oh, <unk> <unk> CFO .
Yeah, and probably likely Felicia.
Okay. According to Mr thing this crunching, our CFO where answer for it.
Uh huh.
I mean, we'll be hanging gabaldon seem a flip yet.
The only outstanding entry onions.
I plan to ensure the Gucci.
And actually you know Thunder showroom to hell with him as well too.
Sure.
Maybe that's a little background.
Sounds like Bachelor, making two or three P C.
The financial performance for the full year of 2023 cannot be accurately estimated.
The crypto currency market.
Hi, highly volatile.
And as we mentioned before we expect to achieve 26 million RMB or three 8 million U S. Dollar in revenue for the first quarter of 2023.
Yes.
Well.
Tommy.
So exactly what the equation faster countrywoman, the ear in Washington to the castle portal with Henkel, and it's actually getting a jolt attitude and show them that how we hosted.
Well look I knew you would that she had kind of youll find Donaldson got hold of the beetle well make machine C. J you want to talk a win at a hunger cheaply.
We haven't seen it.
And in the price of crypto currencies.
Under our current business model, our financial performance will be gradually improved.
One leg with a price fluctuation.
At the same time, we will continue to increase our investment in offer blockchain business out this year.
Looking ahead, we are confident in our capability and I believe we will see the growth opportunities in this industry.
How Canadians on the way that woman and <unk>.
Thank you for your counsel listening Mr. Yan has finished answering this question. Please ask the next one.
Thank you and my second question is I have a question feel for is there a development plan do you have potential acquisition plan or target that you are interested in.
Thank you for your question Mr thing, we're prepared and anchor your questions.
So <unk> gone through shuffle, Youll, Chiquita sogou flipping over to Johan.
Changing the entre and baby played out.
Okay.
Which one.
Total sheet.
For example, the change in pattern to it.
Sure sure.
Overall in Q2.
So being able to move.
You too.
Well gentlemen.
To them also.
Absolutely under control it.
Well my inquiry that jumped.
Hi, Joe Barbara.
Yes.
The block 10 industry is still in its early stage.
So we can see many new company and the projects that continue to emerge.
We believe this strategic acquisition will accelerate our business expansion.
We are currently evaluating the principals and the strategy of potential applications.
We will disclose the latest progress through press releases or SEC filings as appropriate.
Okay.
Yeah.
Thank you for your for listening Mr thing already finished this question if you have more.
Placement.
Thank you seeing no further questions, let me turn the call over to the company's Chief Financial Officer, Mr. Yang for closing remarks.
Okay. Thank you very much for joining this conference call. If you have any questions. Please contact us through email.
I'll add Inc, a chance dot com or reach out with our IHOP hotel and since Investor relations at peanut shell.
Since IR Dot Com management will respond to your questions as soon as possible. We appreciate your interest and support in <unk> and look forward to speaking with you again next time.
Yeah.
Thank you again for attending <unk> fourth quarter and full year 2020 earnings Conference call. This concludes our call today and we thank you all for listening in Goodbye.
Thank you.
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