Q2 2023 Intchains Group Ltd Earnings Call

Good day ladies and gentlemen. Thank you for standing by and welcome to IncChain's second quarter 2023 earnings conference call.

Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Joining us today is Mr. Chao Wei Yang, Chief Financial Officer of Inkchains.

Mr. Yan will provide an overview of the company's performance and the details of the company's financial results. After that, we will conduct a question and answer session to take your questions.

During the question and answer session, Mr. Yan would deliver the answers in Chinese and the company's representative will provide corresponding English translations.

Before we continue, I'd like to remind you that today's discussion 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 projections 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 statement.

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 encourages investors to review other factors that may be wrong.

that may affect its future results in the company's registration statement and other filings with the SEC.

With that, I will now turn the call over to Mr. Zhao Yiyun, the company's CFO . Please again, please go ahead.

And please go ahead.

Okay, can everybody hear me?

Okay, okay. Thank you, operator and everyone for joining the Interchange Earnings Conference call for the second quarter of fiscal year 2022.

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Ladies and gentlemen, please remain on the line. Your conference will resume shortly.

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Ladies and gentlemen, please remain on the line. Your conference will resume shortly.

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If this is a chance, please remain underlined. Your conference will resume shortly.

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And mass production before the first quarter of 2024.

Looking forward to the second session.

We will continue to empower our clients with diversified hardware and software developed for web 3 applications in Unreal.

As we extend our service up and down the industry value chain,

Together with all industry participants, we are confident we can promote the healthy and sustainable development of web industry as a whole.

Now I will provide a brief financial overview of the second quarter of 2023.

Our revenue was RMB 13.9 million for US dollar 1.9 million.

1.9 million in the second quarter.

A year over year decrease.

Yeah, okay go ahead

The cost of revenue is increased by 7.5% year-over-year to RMB 30.7 million or US dollar 4.2 million in the second quarter. Altributes to an inventory write-off of RMB 22.5 million.

Partially offset by the decrease in self-volume of the OSH.

Total operating expenses decreased by 2.1 year over year to RMB 17.3 million or US dollar 2.4 million in the second quarter primarily due to the decrease in research and development expenses partially offset by increase in sales and marketing expenses and general and mainrene.

year-over-year to RMB 9 million or US dollar 1.2 million in second quarter

Can everybody hear me?

Can.

Okay.

Sales and marketing expense increased by 124.3% year-over-year to RMB 1.3 million or USD 0.2 million in the second quarter, mainly due to the increased personnel-related expenses.

General and administrative expense increased by 164.2% year-over-year to RMB 7.1 million or US dollar 1 million in the second quarter, largely due to increase in personnel related to cost and professional expense.

partially offset by the decrease in tax surcharge. Interest income increased by 66.3% year-over-year to RMB 4.4 million or USD 0.6 million in the second quarter, mostly attributable to effective fund management as well as our fundraising via public...

to RMB $0.3 million or US $0.04 million in the second quarter. Primarily due to a decrease in the amount of local government grants with no repayment obligation we received in support of our qualified IC industry projects.

Our net loss was RMB 20.5 million or USD 2.8 million in the second quarter. Basic and diluted net loss per ordinary share was RMB 0.17 or USD 0.02 in the second quarter.

Each ADS represents two of the company's Class A ordinary shares.

We caught a presence. a challenge to follow up isn't it?

particularly with respect to the Web3 industry. However, blockchain technology has applications extending far beyond crypto.

And our diverse, innovative, growing product portfolio positions us to capture emerging opportunities as the Web3 industry recovers.

Moving forward, we will remain focusing on advancing our cheap technologies while expanding our product offerings to serve the upstream and downstream of our value chain, ultimately driving our long-term sustainable growth.

Thank you for your continued support. We look forward to updating you on our progress in the future. Now, I'd like to turn the discussion over to the operator for any questions.

To ask a question, please press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Once again, to ask a question, please press star 11 on your telephone.

Our first question comes from the line of Janet

Please ask your question, Janet.

Thank you for taking my question. Could you share some color on the potential downstream opportunity you mentioned? Thank you.

Thank you, Janet. I'm Daniel. I will help you to do the translation for both parties.

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You have a very honest impact on our society and on the lives of the Chinese people.

During the second quarter, we proactively conduct in-depth discussions with the Singapore-based professional teams specializing in Web3 infrastructure.

Their advertising complements us and they share our passion for the Web3 industry.

We are now very close to achieving a consensus on our joint strategic goals and execution planning.

We hope you will enjoy this video. If you have any questions, please feel free to contact us. We hope you will enjoy this video.

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If everything goes smoothly, we believe this initiative will allow us to accelerate our product offering expansion beyond asset chips and deepen our penetration along the value chain in web3 industry.

Furthermore, we will be able to extend our reach to additional clients with advanced products and service capabilities.

enhancing our brand awareness.

We will share more information in accordance with ethical requirements.

Thank you, Mr. Yan. Let's move to the next question.

Thank you.

Our next question comes from the line of Lise.

Please, please ask your question. Hi.

Hi, thank you for taking my question.

Could you share the development progress of your latest SheHer product, please?

Thank you for your question.

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We commenced the development of our more advanced next-generation chips on our Sheikha platform last year. We have been closely monitoring the market recovery while continuously iterating the project algorithm combination.

Thank you for your attention.

Thank you for your attention. We hope you enjoyed this session. We hope you enjoyed the session. We hope you enjoyed it. We hope you enjoyed it.

Given the current market conditions, we have decided to complete the takeout in the third quarter and realize the initial sales income in the fourth quarter of next year. We believe our investment in products are a boundary expansion along the value chain.

and our deep industry penetration during the bear market will ultimately propel our long-term growth.

Thank you, Mr. Lien. Let's move to the next question.

Thank you.

And that concludes the question and answer session.

Thank you very much for joining this conference call. If you have any questions, please contact the company and P. Chan to financial communications. Have a great day.

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