“The decrease was mainly due to increased short-term investments,” said Canaan.
Canaan has significantly reduced its equipment prices due to the COVID 19 pandemic.
China-based Bitcoin mining machine maker Canaan reported a net loss of $ 5.6 million in the first quarter of 2020. to sell more devices.
In a results report published on Friday The company had sales of $ 9.4 million in the first three months of this yearwith growth of 44.6% over the previous year. However, expenses of $ 9.3 million and $ 5.9 million were also incurred for the cost of goods sold and for research and development.
For this revenue, Canaan sold 0.9 million terahashes per second (TH / s) of Bitcoin’s processing power, which is less than 1% of current network performance.
This means that Canaan lowered the price of mining hardware sold in the first three months by more than 50% to just $ 10 per TH / s;; This reflects a general slowdown in buying interest in mining hardware resulting from the halving of Bitcoin and the COVID-19 pandemic that has destabilized global logistics.
Canaan cut prices, but it didn’t work
For a better context, Canaan made a profit of $ 66.5 million in 2019 with the sale of 2.9 million TH / s Bitcoin computing power, which means that the average prices were USD 22 per TH / s. s last year.
Other major manufacturers You have also adopted a similar price reduction strategy in recent months.. Zhang Nangeng, CEO and President of Canaan, said on Friday:
The general market situation from December last year to January was not very good. The price per unit TH / s was actually lower. And logistics in mainland China had basically stopped around the Chinese New Year because of the COVID 19 pandemic. Although the price of Bitcoin rose significantly in February and early March, the pandemic has had a significant impact on our sales.
Zhang Nangeng, CEO and President of Canaan.
The report also shows that Canaan had cash and cash equivalents of $ 37 million as of March 31, compared to $ 71 million at the end of last year. Kanaan said in the report:
The decrease was primarily due to increased short-term investments as the company invested RMB 173.4 million (approximately $ 24.5 million) in short-term investments through March 31, 2020.
Zhang said the company has partnered with the China-based International Semiconductor Manufacturing Corporation, in addition to its current supply chain alliance with Samsung and TSMC Use the Bitcoin mining team with 14nm chips and expect to be able to deliver more in the second quarter.
However, the company refuses to provide a business outlook for the second quarter of 2020, citing uncertainty about the COVID-19 pandemic and the halving of Bitcoin in order to “only have a very limited insight into the situation and its potential impact Business and the markets in which it operates. “
Translated version of Wolfie Zhao’s article published on CoinDesk.