Bitcoin miner maker Canaan reports $68 million in 2020 revenue

Hangzhou-based bitcoin mining hardware maker Canaan estimates its Q1 revenue to be not less than 400 million yuan, or $61 million, which is already close to what it made for the year of 2020.

The firm disclosed its earning reports for Q4 on Monday, saying it made a gross profit of $5.8 million on a net revenue of $68 million for 2020. That means the average price for its 6.6 million terahashes second of computing power sold in 2020 was $10 per TH/s, which is much lower than market average.

Factoring in interests and expenses, Canaan still recorded a net loss for 2020 but the net loss narrowed to $33.0 million from a whopping $150 million in 2019. 

Notably, bitcoin's surging prices during Q4 didn't help boost Canaan's revenue for the quarter as it "did not have sufficient inventory to deliver to its customers."

Amid a global chip shortage, major bitcoin mining equipment makers in China do not have spot inventory but have been selling equipment on a preorder basis. 

Indeed, Canaan's contract liability was nearly $66 million as of December 31 for the preorders it received from mining clients that are due for shipment this year.

"As the price of bitcoin started to move up in the fourth quarter of 2020, the Company believes that its revenue will be substantially improved in 2021 and expects that its total net revenues in the first quarter of 2021 will be not less than RMB400.0 million [$61 million]," Canaan said in the filing.

As The Block reported last month, institutionalized capital, especially the ones from North America, has invested more than hundreds of millions of dollars since Q4 in placing preorders of bitcoin mining equipment.

Nangeng Zhang, founder and chairman of Canaan, said during an IR call on Monday that Canaan is planning to start bitcoin self-mining in Q2 with estimated computing power of between 350 to 450 petahashes second (PH/s).

The firm is further allocating no less than 10% of its monthly production into bitcoin mining starting from the second half of 2021 and estimates to have 2,000 PH/s of mining power by the year end, Zhang said. 

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