Intchains Group Limited Reports Fourth Quarter and Full Year 2023 Unaudited Financial Results
- Sales volume of ASIC chips decreased by 36.5% in Q4 2023 compared to the same period in 2022.
- Revenue for Q4 2023 increased by 5.3% from the previous year, driven by a one-off sale of intelligent router products.
- Net income for Q4 2023 decreased by 36.2% compared to the same period in 2022.
- Full year 2023 saw a 55.0% decrease in ASIC chip sales volume compared to 2022.
- Revenue for full year 2023 decreased by 82.6% from 2022 due to challenges in the cryptocurrency market.
- Net loss for full year 2023 was RMB26.8 million compared to a net income of RMB355.2 million in 2022.
- The company experienced significant declines in sales volume and revenue for both Q4 and full year 2023.
- Net income decreased for both Q4 and full year 2023, indicating financial challenges.
- The net loss for full year 2023 was substantial, highlighting the impact of market conditions on the company's financial performance.
Insights
The reported financial results for Intchains Group Limited indicate a mixed performance, with a decrease in sales volume of ASIC chips by 36.5% in Q4 2023 and a significant year-over-year decrease of 55.0% for the full year. However, the company managed a 5.3% revenue increase in Q4 due to a one-off sale of intelligent router products. The full-year revenue decrease of 82.6% is a stark contrast to the previous year, highlighting the volatility in the cryptocurrency market and its impact on companies like Intchains that supply ASIC chips for blockchain applications. The net income for Q4 decreased by 36.2% and the company recorded a net loss for the full year, compared to a net income in the previous year, which is a concerning sign for stakeholders.
From a financial perspective, the acquisition of the Goldshell brand and the upcoming mass production of their new 12nm ASIC chip could potentially turn around the company's fortunes. However, investors should be cautious and monitor the cryptocurrency market trends closely, as they directly affect the demand for ASIC chips. The company's efforts to optimize capital utilization and diversify its product offerings may mitigate some risks associated with market volatility.
Intchains Group's strategic moves, including the acquisition of Goldshell brand assets and the introduction of new computing equipment for blockchain applications, indicate an attempt to diversify and strengthen its market position. The shift towards a 12nm process node for ASIC chip manufacturing may offer competitive advantages in terms of power efficiency and performance, which is crucial in the blockchain and cryptocurrency markets.
However, the overall decrease in sales volume and the significant full-year revenue drop reflect the broader downturn in the cryptocurrency market, which has been affected by regulatory uncertainties and market sentiment. The company's future performance will likely hinge on the recovery of the cryptocurrency market and the successful adoption of its new products. Investors and industry observers should watch for the market's reception of the Goldshell-branded equipment and the performance metrics of the new ASIC chips once they enter mass production.
The transition to a 12nm process node for ASIC chip manufacturing by Intchains Group is a noteworthy development in the semiconductor industry. This move places the company within a competitive technological landscape, where efficiency and performance are paramount. The ASIC chip market for blockchain applications is highly sensitive to technological advancements and Intchains' ability to innovate could play a pivotal role in its market share capture and overall business resilience.
Furthermore, the acquisition of Goldshell brand assets suggests an expansion into the consumer-facing side of blockchain hardware, which may open up new revenue streams. However, the success of these initiatives will depend on the company's execution and the ability to scale production in response to market demand. Stakeholders should consider the potential of Intchains' R&D investments to yield products that meet the evolving needs of the blockchain industry.
SHANGHAI, China, Feb. 28, 2024 (GLOBE NEWSWIRE) -- Intchains Group Limited (Nasdaq: ICG) (“we,” or the “Company”), a provider of integrated solutions consisting of high-performance computing ASIC chip products and ancillary software and hardware for blockchain applications, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023 Operating and Financial Highlights
- Sales volume of ASIC chips was 423,040 units for the fourth quarter of 2023, representing a decrease of
36.5% from 666,420 units for the same period of 2022. Fourth quarter ASIC chip sales consisted of 287,872 units sold directly to customers and 135,168 units embedded in computing equipment for blockchain applications that we began offering to customers in the fourth quarter of 2023. - Revenue was RMB35.5 million (US
$5.0 million ) for the fourth quarter of 2023, representing an increase of5.3% from RMB33.7 million for the same period of 2022. - Net income was RMB8.1 million (US
$1.1 million ) for the fourth quarter of 2023, representing a decrease of36.2% from RMB12.7 million for the same period of 2022.
Full Year 2023 Operating and Financial Highlights
- Sales volume of ASIC chips was 1,457,373 units for the year ended December 31, 2023, representing a year-over-year decrease of
55.0% from 3,235,235 units for 2022. Full year 2023 ASIC chip sales consisted of 1,322,205 units sold directly to customers and 135,168 units embedded in computing equipment for blockchain applications that we began offering to customers in the fourth quarter of 2023. - Revenue was RMB82.2 million (US
$11.6 million ) for the year ended December 31, 2023, representing a year-over-year decrease of82.6% from RMB473.7 million for 2022. - Net loss was RMB26.8 million (US
$3.8 million ) for the year ended December 31, 2023, compared to a net income of RMB355.2 million for 2022.
Mr. Qiang Ding, Chairman of the Board of Directors and Chief Executive Officer, commented, “2023 was a year filled with accomplishments as well as challenges for Intchains. Our successful first quarter listing on the Nasdaq marked the commencement of an exciting new stage in our development. Throughout the year, we actively addressed evolving market conditions with investments in innovative technology, enhancing our competitiveness, and extending our presence across the industry value chain. Our latest ASIC chip, designed and manufactured using a 12nm process node, completed the relevant IC verification and trial production processes in February 2024 and is set to enter mass production in March 2024. Furthermore, following our successful acquisition of the Goldshell brand and related assets in February 2024, we expect to officially launch our Goldshell-branded computing equipment for blockchain applications in March 2024. In addition to these positive developments, our revenue for the fourth quarter of 2023 experienced significant growth of
Fourth Quarter 2023 Financial Results
Revenue
Revenue was RMB35.5 million (US
Cost of Revenue
Cost of revenue was RMB14.1 million (US
Operating Expenses
Total operating expenses were RMB22.8 million (US
- Research and development expenses increased by
40.2% to RMB14.0 million (US$2.0 million ) for the fourth quarter of 2023 from RMB10.0 million for the same period of 2022. The increase was primarily attributable to increased intellectual property expenses, labor costs and depreciation and amortization expenses for the design of ASIC chips. - Sales and marketing expenses increased by
65.3% to RMB1.8 million (US$0.3 million ) for the fourth quarter of 2023 from RMB1.1 million for the same period of 2022, mainly driven by increased personnel-related expenses. - General and administrative expenses increased by
316.6% to RMB7.0 million (US$1.0 million ) for the fourth quarter of 2023 from RMB1.7 million for the same period of 2022, primarily due to increased lease-related expenses, labor costs, and professional expenses.
Interest Income
Interest income increased by
Other Income, net
Our other income, net, decreased by
Net Income
As a result of the foregoing, we recorded a net income of RMB8.1 million (US
Basic and Diluted Net Earnings Per Ordinary Share
Basic and diluted net earnings per ordinary share decreased by
Full Year 2023 Financial Results
Revenue
Revenue was RMB82.2 million (US
Cost of Revenue
Cost of revenue was RMB73.1 million (US
Operating Expenses
Total operating expenses were RMB74.0 million (US
- Research and development expenses decreased by
12.6% to RMB42.3 million (US$6.0 million ) for 2023 from RMB48.4 million for 2022. The decrease was primarily attributable to the different stages of our research and development projects during the reporting period, partially offset by an increase in labor costs and depreciation and amortization expenses. - Sales and marketing expenses increased by
60.5% to RMB6.5 million (US$0.9 million ) for 2023 from RMB4.1 million for 2022, mainly due to an increase in personnel-related expenses. - General and administrative expenses increased by
118.1% to RMB25.2 million (US$3.6 million ) for 2023 from RMB11.6 million for 2022, primarily due to an increase in rental expenses, labor costs and professional expenses.
Interest Income
Interest income increased by
Other Income, net
Our other income, net decreased by
Net Loss
As a result of the foregoing, we recorded a net loss of RMB26.8 million (US
Basic and Diluted Net Loss Per Ordinary Share
Basic and diluted net loss per ordinary share were RMB0.22 (US
Recent Developments
On February 28, 2024, the Company completed its previously reported acquisition of certain assets from Singapore-based GOLDSHELL PTE. LTD., or the Seller, in accordance with an asset acquisition agreement between the Company and the Seller dated December 8, 2023. Pursuant to the terms and conditions of such asset acquisition agreement, the Company acquired the Goldshell brand and certain related assets for a cash consideration of US
On January 22, 2024, Maxim Partners LLC exercised the underwriter’s warrants granted in connection with our initial public offering on the Nasdaq Capital Market in full through a cashless exercise to acquire 7,921 of our ADSs.
Conference Call Information
The Company’s management team will host an earnings conference call to discuss its financial results at 8:00 P.M. U.S. Eastern Time on February 28, 2024 (9:00 A.M. Beijing Time on February 29, 2024). Details for the conference call are as follows:
| Event Title: | Intchains Group Limited Fourth Quarter and Full Year 2023 Earnings Conference Call |
| Date: | February 28, 2024 |
| Time: | 8:00 P.M. U.S. Eastern Time |
| Registration Link: | https://register.vevent.com/register/BI57545434a6a24bcd8e534e49cf5b4c7d |
All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of dial-in numbers and a personal access PIN, which will be used to join the conference call.
Additionally, a live and archived webcast of the conference call will also be available at the Company’s website at https://intchains.com/.
About Intchains Group Limited
Intchains Group Limited is a provider of integrated solutions consisting of high-performance computing ASIC chip products and ancillary software and hardware for blockchain applications. The Company utilizes a fabless business model and specializes in the front-end and back-end of IC design, which are the major components of the IC product development chain. The Company has established strong supply chain management with a leading foundry, which helps to ensure its product quality and stable production output. The Company’s products consist of high-performance computing ASIC chip products including ASIC chips that have high computing power and superior power efficiency and computing equipment incorporating our ASIC chips, as well as ancillary software and hardware, which cater to the evolving needs of the blockchain industry. The Company has built a proprietary technology platform named “Xihe” platform, which allows the Company to develop a wide range of ASIC chips with high efficiency and scalability. For more information, please visit the Company’s website at: https://intchains.com/.
Exchange Rate Information
The unaudited United States dollar (“US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers. Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the noon buying rate of US
Forward-Looking Statements
Certain statements in this announcement are 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. Forward-looking statements include, but are not limited to, statements about: (i) our goals and strategies; (ii) our future business development, formed condition and results of operations; (iii) expected changes in our revenue, costs or expenditures; (iv) growth of and competition trends in our industry; (v) our expectations regarding demand for, and market acceptance of, our products; (vi) general economic and business conditions in the markets in which we operate; (vii) relevant government policies and regulations relating to our business and industry; and (viii) assumptions underlying or related to any of the foregoing. Investors can identify these forward-looking statements by words or phrases such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. 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 encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.
For investor and media inquiries, please contact:
Intchains Group Limited
Investor relations
Email: ir@intchains.com
Piacente Financial Communications
In China:
Helen Wu
Tel: +86-10-6508-0677
Email: intchains@tpg-ir.com
In the United States:
Brandi Piacente
Tel: +1-212-481-2050
Email: intchains@tpg-ir.com
| INTCHAINS GROUP LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share and per share data, or as otherwise noted) | |||||||
| As of December 31, | |||||||
| 2022 | 2023 | ||||||
| RMB | RMB | US$ | |||||
| ASSETS | |||||||
| Current Assets： | |||||||
| Cash and cash equivalents | 712,231 | 694,750 | 97,854 | ||||
| Inventories, net | 77,782 | 41,767 | 5,883 | ||||
| Prepayments and other current assets, net | 41,968 | 47,403 | 6,678 | ||||
| Short-term investments | - | 13,596 | 1,915 | ||||
| Total current assets | 831,981 | 797,516 | 112,330 | ||||
| Non-current Assets: | |||||||
| Cryptocurrency | - | 645 | 91 | ||||
| Property, equipment, and software, net | 6,965 | 49,184 | 6,926 | ||||
| Intangible assets, net | - | 3,425 | 482 | ||||
| Right-of-use assets | 1,329 | 1,735 | 244 | ||||
| Deferred tax assets | - | 12,899 | 1,817 | ||||
| Prepayments on long-term assets | 112,856 | 113,425 | 15,976 | ||||
| Other non-current assets | - | 421 | 59 | ||||
| Total non-current assets | 121,150 | 181,734 | 25,595 | ||||
| Total assets | 953,131 | 979,250 | 137,925 | ||||
| Current Liabilities: | |||||||
| Accounts payable | 2,903 | 195 | 27 | ||||
| Contract liabilities | 6 | 9,828 | 1,384 | ||||
| Income tax payable | 2,239 | 1,634 | 230 | ||||
| Lease liabilities | 972 | 1,103 | 155 | ||||
| Provision for warranty | 223 | 40 | 6 | ||||
| Accrued liabilities and other current liabilities | 12,855 | 15,364 | 2,165 | ||||
| Total current liabilities | 19,198 | 28,164 | 3,967 | ||||
| Non-current Liabilities: | |||||||
| Deferred tax liabilities | 42 | - | - | ||||
| Lease liabilities | 294 | 761 | 107 | ||||
| Total non-current liabilities | 336 | 761 | 107 | ||||
| Total liabilities | 19,534 | 28,925 | 4,074 | ||||
| Shareholders' Equity: | |||||||
| Ordinary shares (US | 1 | 1 | - | ||||
| Subscriptions receivable from shareholders | (1 | ) | (1 | ) | - | ||
| Additional paid-in capital | 144,577 | 186,262 | 26,235 | ||||
| Statutory reserve | 47,478 | 48,265 | 6,798 | ||||
| Accumulated other comprehensive income | - | 1,838 | 259 | ||||
| Retained earnings | 741,542 | 713,960 | 100,559 | ||||
| Total equity | 933,597 | 950,325 | 133,851 | ||||
| Total liabilities and shareholders’ equity | 953,131 | 979,250 | 137,925 | ||||
| INTCHAINS GROUP LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (All amounts in thousands, except share and per share data, or as otherwise noted) | ||||||||
| For the Three Months ended December 31, | ||||||||
| 2022 | 2023 | |||||||
| RMB | RMB | US$ | ||||||
| Products revenue | 33,664 | 35,454 | 4,994 | |||||
| Cost of revenue | (19,991 | ) | (14,132 | ) | (1,990 | ) | ||
| Gross profit | 13,673 | 21,322 | 3,004 | |||||
| Operating expenses: | ||||||||
| Research and development expenses | (9,958 | ) | (13,962 | ) | (1,967 | ) | ||
| Sales and marketing expenses | (1,081 | ) | (1,787 | ) | (252 | ) | ||
| General and administrative expenses | (1,690 | ) | (7,040 | ) | (992 | ) | ||
| Total operating expenses | (12,729 | ) | (22,789 | ) | (3,211 | ) | ||
| Income/(loss) from operations | 944 | (1,467 | ) | (207 | ) | |||
| Interest income | 3,474 | 4,248 | 598 | |||||
| Foreign exchange loss, net | (72 | ) | (971 | ) | (137 | ) | ||
| Other income, net | 10,588 | 7,458 | 1,050 | |||||
| Income before income tax expenses | 14,934 | 9,268 | 1,304 | |||||
| Income tax expense | (2,281 | ) | (1,190 | ) | (168 | ) | ||
| Net Income | 12,653 | 8,078 | 1,136 | |||||
| Foreign currency translation adjustment, net of nil tax | - | (826 | ) | (116 | ) | |||
| Total comprehensive income | 12,653 | 7,252 | 1,020 | |||||
| Weighted average number of shares used in per share calculation | ||||||||
| — Basic | 117,647,000 | 119,876,032 | 119,876,032 | |||||
| — Diluted | 117,647,000 | 119,921,358 | 119,921,358 | |||||
| Net earnings per share | ||||||||
| — Basic | 0.11 | 0.07 | 0.01 | |||||
| — Diluted | 0.11 | 0.07 | 0.01 | |||||
| INTCHAINS GROUP LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) (All amounts in thousands, except share and per share data, or as otherwise noted) | ||||||||
| For the Year ended December 31, | ||||||||
| 2022 | 2023 | |||||||
| RMB | RMB | US$ | ||||||
| Products revenue | 473,740 | 82,225 | 11,581 | |||||
| Cost of revenue | (87,021 | ) | (73,147 | ) | (10,302 | ) | ||
| Gross profit | 386,719 | 9,078 | 1,279 | |||||
| Operating expenses: | ||||||||
| Research and development expenses | (48,387 | ) | (42,304 | ) | (5,958 | ) | ||
| Sales and marketing expenses | (4,070 | ) | (6,532 | ) | (920 | ) | ||
| General and administrative expenses | (11,557 | ) | (25,210 | ) | (3,551 | ) | ||
| Total operating expenses | (64,014 | ) | (74,046 | ) | (10,429 | ) | ||
| Income/(loss) from operations | 322,705 | (64,968 | ) | (9,150 | ) | |||
| Interest income | 11,132 | 16,750 | 2,359 | |||||
| Foreign exchange (loss)/gains, net | 3,494 | (524 | ) | (74 | ) | |||
| Other income, net | 29,726 | 13,191 | 1,856 | |||||
| Income/(loss) before income tax expenses | 367,057 | (35,551 | ) | (5,009 | ) | |||
| Income tax (expense)/benefit | (11,856 | ) | 8,756 | 1,233 | ||||
| Net Income/(loss) | 355,201 | (26,795 | ) | (3,776 | ) | |||
| Foreign currency translation adjustment, net of nil tax | - | 1,838 | 259 | |||||
| Total comprehensive income/(loss) | 355,201 | (24,957 | ) | (3,517 | ) | |||
| Weighted average number of shares used in per share calculation | ||||||||
| — Basic | 117,647,000 | 119,387,937 | 119,387,937 | |||||
| — Diluted | 117,647,000 | 119,387,937 | 119,387,937 | |||||
| Net earnings/(loss) per share | ||||||||
| — Basic | 3.02 | (0.22 | ) | (0.03 | ) | |||
| — Diluted | 3.02 | (0.22 | ) | (0.03 | ) | |||
FAQ
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