Nano Labs Announces Second Half of 2023 Financial Results
- Positive: The company is actively pursuing global market expansion opportunities and enhancing product performance through research and development efforts.
- Positive: The metaverse business line, iPollo Metaverse, receives positive feedback and offers diverse digital application scenarios.
- Negative: Significant decrease in net revenue for the second half of 2023 compared to the same period in 2022, primarily due to reduced sales volume.
- Negative: Gross loss and operating loss increased significantly in the second half of 2023, indicating financial challenges for the company.
- Negative: Net loss per share also increased in the second half of 2023, reflecting a decline in profitability.
- None.
Insights
The reported financial results for Nano Labs Ltd show a significant year-over-year decline in net revenue, from RMB603.0 million to RMB26.1 million. This substantial decrease is a red flag for investors and may indicate underlying issues in the company's operations or market demand. The increase in net loss, from RMB80.3 million to RMB120.0 million, suggests that the company's cost-saving measures were not sufficient to offset the revenue shortfall. The reported gross loss and increased loss from operations further underscore operational challenges.
From an investor's perspective, the decline in sales volume of key product lines such as the iPollo V1 Series and B1 Series is concerning. While the introduction of 3D-printing products might indicate diversification, the revenue generated is still negligible compared to losses. The reduction in operating expenses, although beneficial for cash conservation, might also reflect scaled-back operations, which could impact the company's long-term growth potential. The decrease in research and development expenses might raise questions about the company's commitment to innovation, which is critical in the technology sector.
It's important to monitor the company's cash position, which has also decreased from the prior year. This could affect the company's ability to fund operations and invest in new projects. The financial results suggest that investors should be cautious and closely watch the company's future performance and strategic initiatives.
The context of Nano Labs Ltd's business environment includes supportive government policy and a positive outlook on the web3.0 industry, as mentioned by the CEO. The historic approval of a Bitcoin spot ETF by the SEC could have broader implications for blockchain and related technology companies. However, despite these positive external factors, Nano Labs' financial performance has not capitalized on these trends.
The company's strategy to expand into the global market and develop new products in AI and ZK computing chips could be seen as a proactive move to capture emerging market opportunities. However, the immediate financial impact of these initiatives is yet to be seen. The metaverse business line, iPollo Metaverse, may represent a forward-thinking approach, but its contribution to the bottom line is currently unclear.
Assessing the company's performance against industry peers would be important in determining its competitive position. Investors should consider the company's ability to convert its R&D efforts and market expansion strategies into profitable revenue streams. The market's reception of the company's upcoming product launches will be telling of its ability to recover and grow.
Nano Labs Ltd's focus on the fabless integrated circuit design market places it in a highly competitive and rapidly evolving industry. The transition towards web3.0 and the metaverse signifies a potential growth area, but also requires substantial investment in R&D to stay ahead. The company's current financial struggles could impede its ability to keep pace with technological advancements.
While the company is upgrading its packaging technology and IP, which is essential for efficiency and cost reduction in chip production, the tangible benefits of these upgrades need to be reflected in future financial results. The iterative development of the Cuckoo series products suggests a commitment to product improvement, but the market's response and the actual performance of these products will be critical to the company's recovery.
The strategic emphasis on AI and ZK computing chips aligns with industry trends towards more specialized and high-performance computing solutions. However, the success of such initiatives will depend on the company's execution and timing, especially given the financial headwinds it currently faces.
HANGZHOU, China, March 18, 2024 (GLOBE NEWSWIRE) -- Nano Labs Ltd (Nasdaq: NA) (“we,” the “Company” or “Nano Labs”), a leading fabless integrated circuit design company and product solution provider in China, today announced its unaudited financial results as of December 31, 2023 and for the six months ended December 31, 2023
Second Half of 2023 Financial Highlights
- Net revenue was RMB26.1 million (US
$3.7 million ) for the second half of 2023, compared to RMB603.0 million in the same period of 2022. - Gross loss was RMB40.6 million (US
$5.7 million ) for the second half of 2023, compared to a gross profit of RMB53.8 million in the same period of 2022. - Loss from operations was RMB124 million (US
$17.6 million ) for the second half of 2023, compared to a loss from operations of RMB86.9 million in the same period of 2022. - Net loss was RMB120.0 million (US
$16.9 million ) for the second half of 2023, compared to a net loss of RMB80.3 million in the same period of 2022. - Net loss per share (both basic and diluted) was RMB1.91 (US
$0.27) for the second half of 2023, compared to a net loss per share (both basic and diluted) of RMB1.47 in the same period of 2022.
Mr. Jianping Kong, Chairman and Chief Executive Officer of the Company, commented, “In the second half of 2023, our company benefited from supportive government policy and positive market trends. The Hong Kong government's strong support for the web3.0 industry and the historic approval of the first Bitcoin spot ETF by the SEC in early 2024 have bolstered the industry, infusing optimism and propelling progress. Our management team is actively pursuing global market expansion opportunities. Through a series of market expansion initiatives, we aim to continue exploring potential market opportunities to increase our market share.
In terms of research and development, our Cuckoo series iterative products are currently undergoing intensive R&D efforts. Significant advancements were made in the latter half of 2023, and we anticipate the launch of enhanced versions of our products in 2024, which are expected to deliver substantially improved performance. Additionally, our company is concurrently upgrading our packaging technology and IP to enhance the efficiency of chip production. We are also laying the groundwork for research and development of AI computing, ZK computing, and other chips to seize emerging market opportunities.
Our metaverse business line, iPollo Metaverse, offers a photography studio service that includes 3D scanning and 3D printing services. This service has not only received high praise from athletes at the Asian Games but has also provided diverse digital application scenarios for various IPs. It assists in the digitalization of various types of IPs, helping them enter the metaverse track. Furthermore, the photography studio service offers personalized customization services to users, allowing a wide range of enthusiasts to experience the joy of DIY in the metaverse.”
Mr. Bing Chen, Chief Financial Officer, commented, “For the second half of 2023, our net revenue was RMB26.1 million (US
Second Half of 2023 Financial Results
Net Revenues
Net revenue was RMB26.1 million (US
Cost of Revenues
Cost of revenues was RMB66.6 million (US
The cost of 3D-printing products was RMB629 thousand for the second half of 2023, compared to nil for the same period of 2022.
Operating Expenses
Total operating expenses decreased by
- Selling and marketing expenses decreased to RMB5.8 million (US
$0.8 million ) for the second half of 2023, from RMB14.3 million for the same period of 2022. The decrease in selling and marketing expenses was primarily due to the decrease in advertising fee and marketing promotion expenses. - General and administrative expenses decreased by
38.4% to RMB22.4 million (US$3.2 million ) for the second half of 2023, from RMB36.3 million for the same period of 2022. The decrease in general and administrative expenses was primarily due to the decrease in professional fees and employee salary expenses as the number and salaries of general and administrative staff decreased. - Research and development expenses decreased by
38.3% to RMB55.6 million (US$7.9 million ) for the second half of 2023, from RMB90.2 million for the same period of 2022. The decrease in research and development expenses was primarily due to the decrease in equipment cost, salary expenses and share-based compensation expenses. The Company expects to continue its significant investment in research and development to support its future development, product iteration, and competitive strengths.
Loss from Operations
Loss from operations was RMB124.4 million (US
Finance Income
Finance income was RMB0.7 million (US
Net Loss
Net loss was RMB120.0 million (US
Basic and Diluted Loss Per Ordinary Share attributable to Nano Labs Ltd
Basic and diluted loss per share was RMB1.91 (US
Cash and Cash Equivalents
As of December 31, 2023, the Company had cash and cash equivalents of RMB48.2 million (US
Exchange Rate
This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for the convenience of the reader. Unless otherwise specified, all translations of Renminbi amounts into U.S. dollar amounts in this press release are made at RMB7.0827 to US
Non-GAAP Financial Measures
In evaluating our business, we consider and use adjusted net income/(loss) as an additional non-GAAP measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define adjusted net income/(loss) as net income/(loss) excluding share-based compensation expense.
We present the non-GAAP financial measure because they are used by our management to evaluate our operating performance and formulate business plans. Non-GAAP financial measures enable our management to assess our operating results without considering the impact of non-cash charges and non-operating items. We also believe that the use of the non-GAAP measure facilitates investors’ assessment of our operating performance.
The non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as analytical tools. One of the key limitations of using the non-GAAP financial measure is that they do not reflect all items of income and expense that affect our operations. Share-based compensation expenses have been and may continue to be incurred in our business and are not reflected in the presentation of adjusted net income/(loss). Further, the non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.
Conference Call
The Company will host an earnings conference call to discuss its financial results at 8:30 am U.S. Eastern Time (8:30 pm Beijing Time) on March 18, 2024.
For participants who wish to join the call, please access the link provided below to complete the online registration process.
Registration Link: https://s1.c-conf.com/diamondpass/10037655-rw885f.html
Upon registration, participants will receive the dial-in number and unique PIN, which can be used to join the conference call. If participants register and forget their PIN or lose their registration confirmation email, they may simply re-register and receive a new PIN. All participants are encouraged to dial in 15 minutes prior to the start time.
A live and archived webcast of the conference call will be accessible on the Company's investor relations website at: https://ir.nano.cn/.
A telephone replay of the call will be available until 25 March, 2024 via the following dial-in details:
Dial-in Numbers:
| US/Canada: | 1855 883 1031 |
| Hong Kong: | 800 930 639 |
| China: | 400 1209 216 |
| Replay PIN: | 10037655 |
About Nano Labs Ltd
Nano Labs Ltd is a leading fabless integrated circuit (“IC”) design company and product solution provider in China. Nano Labs is committed to the development of high throughput computing (“HTC”) chips, high performance computing (“HPC”) chips, distributed computing and storage solutions, smart network interface cards (“NICs”) vision computing chips and distributed rendering. Nano Labs has built a comprehensive flow processing unit (“FPU”) architecture which offers solution that integrates the features of both HTC and HPC. Nano Lab’s Cuckoo series are one of the first near-memory HTC chips available in the market*. For more information, please visit the Company’s website at: ir.nano.cn.
*According to an industry report prepared by Frost & Sullivan.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s plan to appeal the Staff’s determination, which can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control, which may cause the Company’s actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
For investor and media inquiries, please contact:
Nano Labs Ltd
Email: ir@nano.cn
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
| Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| As of December 31, | As of December 31, | |||||||
| 2022 | 2023 | |||||||
| RMB | RMB | US$ | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 87,811,272 | 48,164,664 | 6,800,325 | |||||
| Restricted cash | 48,112 | 417,990 | 59,016 | |||||
| Accounts receivable, net | - | 1,739,065 | 245,537 | |||||
| Inventories, net | 102,201,746 | 12,874,986 | 1,817,808 | |||||
| Prepayments | 71,314,254 | 24,386,010 | 3,443,039 | |||||
| Other current assets | 27,275,215 | 37,908,092 | 5,352,209 | |||||
| Total current assets | 288,650,599 | 125,490,807 | 17,717,934 | |||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 21,426,955 | 169,653,582 | 23,953,236 | |||||
| Intangible asset, net | 48,717,132 | 47,731,288 | 6,739,137 | |||||
| Operating lease right-of-use assets | 8,447,978 | 7,424,554 | 1,048,266 | |||||
| Total non-current assets | 78,592,065 | 224,809,424 | 31,740,639 | |||||
| TOTAL ASSETS | 367,242,664 | 350,300,231 | 49,458,573 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Short-term debts | - | 20,000,000 | 2,823,782 | |||||
| Current portion of long-term debts | 280,000 | 3,410,000 | 481,455 | |||||
| Accounts payable | 15,292,843 | 16,875,586 | 2,382,649 | |||||
| Advance from customers | 124,469,097 | 107,826,617 | 15,223,942 | |||||
| Operating lease liabilities, current | 4,199,361 | 3,479,752 | 491,303 | |||||
| Other current liabilities | 39,399,532 | 90,978,171 | 12,845,126 | |||||
| Total current liabilities | 183,640,833 | 242,570,126 | 34,248,257 | |||||
| Non-current liabilities: | ||||||||
| Long-term debts | 16,673,316 | 120,260,783 | 16,979,511 | |||||
| Operating lease liabilities, non-current | 2,514,115 | 3,730,672 | 526,730 | |||||
| Total non-current liabilities | 19,187,431 | 123,991,455 | 17,506,241 | |||||
| Total liabilities | 202,828,264 | 366,561,581 | 51,754,498 | |||||
| Shareholders' equity (deficit): | ||||||||
| Class A ordinary shares ( | 35,425 | 50,106 | 7,074 | |||||
| Class B ordinary shares ( | 36,894 | 36,894 | 5,209 | |||||
| Additional paid-in capital | 354,803,564 | 428,310,028 | 60,472,706 | |||||
| Accumulated deficit | (199,207,921 | ) | (452,031,693 | ) | (63,821,945 | ) | ||
| Statutory reserves | 6,647,109 | 6,647,109 | 938,499 | |||||
| Accumulated other comprehensive income | 2,099,329 | 2,254,558 | 318,319 | |||||
| Total Nano Labs Ltd shareholders' equity (deficit) | 164,414,400 | (14,732,998 | ) | (2,080,138 | ) | |||
| Noncontrolling interests | - | (1,528,352 | ) | (215,787 | ) | |||
| Total shareholders' equity (deficit) | 164,414,400 | (16,261,350 | ) | (2,295,925 | ) | |||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | 367,242,664 | 350,300,231 | 49,458,573 | |||||
*Giving effect of the 2-for-1 reverse stock split effective on January 31, 2024.
| Consolidated Statements of Operations and Comprehensive Income (Loss) | ||||||||
| (Unaudited) | ||||||||
| For the six months ended December 31, | ||||||||
| 2022 | 2023 | |||||||
| RMB | RMB | US$ | ||||||
| Net revenues | 603,030,131 | 26,066,660 | 3,680,328 | |||||
| Cost of revenues | 549,236,760 | 66,617,485 | 9,405,662 | |||||
| Gross profit (loss) | 53,793,371 | (40,550,825 | ) | (5,725,334 | ) | |||
| Operating expenses: | ||||||||
| Selling and marketing expenses | 14,266,412 | 5,830,986 | 823,272 | |||||
| General and administrative expenses | 36,311,852 | 22,360,766 | 3,157,096 | |||||
| Research and development expenses | 90,159,028 | 55,648,133 | 7,856,910 | |||||
| Total operating expenses | 140,737,292 | 83,839,885 | 11,837,278 | |||||
| Loss from operations | (86,943,921 | ) | (124,390,710 | ) | (17,562,612 | ) | ||
| Other expenses (income): | ||||||||
| Finance income | (3,771,346 | ) | (680,536 | ) | (96,084 | ) | ||
| Interest income | (144,938 | ) | (153,112 | ) | (21,618 | ) | ||
| Other income | (2,752,999 | ) | (3,507,095 | ) | (495,164 | ) | ||
| Total other income | (6,669,283 | ) | (4,340,743 | ) | (612,866 | ) | ||
| Loss before income tax provision | (80,274,638 | ) | (120,049,967 | ) | (16,949,746 | ) | ||
| Income tax provision | - | (17,394 | ) | (2,456 | ) | |||
| Net loss | (80,274,638 | ) | (120,032,573 | ) | (16,947,290 | ) | ||
| Less: net loss attributable to noncontrolling interests | - | (1,528,282 | ) | (215,777 | ) | |||
| Net loss attributable to Nano Labs Ltd | (80,274,638 | ) | (118,504,291 | ) | (16,731,513 | ) | ||
| Comprehensive income (loss): | ||||||||
| Net loss | (80,274,638 | ) | (120,032,573 | ) | (16,947,290 | ) | ||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | 3,229,764 | (1,616,096 | ) | (228,175 | ) | |||
| Comprehensive Loss | (77,044,874 | ) | (121,648,669 | ) | (17,175,465 | ) | ||
| Comprehensive loss attributable to noncontrolling interests | - | (1,528,352 | ) | (215,787 | ) | |||
| Comprehensive loss attributable to Nano Labs Ltd | (77,044,874 | ) | (120,120,317 | ) | (16,959,678 | ) | ||
| Net loss per ordinary share attributable to Nano Labs Ltd | ||||||||
| Basic* | (1.47 | ) | (1.91 | ) | (0.27 | ) | ||
| Diluted* | (1.47 | ) | (1.91 | ) | (0.27 | ) | ||
| Weighted average number of shares used in per share calculation: | ||||||||
| Basic* | 54,571,995 | 61,970,664 | 61,970,664 | |||||
| Diluted* | 54,571,995 | 61,970,664 | 61,970,664 | |||||
*Giving effect of the 2-for-1 reverse stock split effective on January 31, 2024.
| Non-GAAP Reconciliation | |||||||
| (Unaudited) | |||||||
| For the Six Months Ended December 31, | |||||||
| 2022 | 2023 | ||||||
| RMB | RMB | US$ | |||||
| Net loss | (80,274,638 | ) | (120,032,573 | ) | (16,947,290 | ) | |
| Add: | |||||||
| Share-based compensation expenses | 4,673,674 | 580,813 | 82,004 | ||||
| Non-GAAP adjusted net loss | (75,600,964 | ) | (119,451,760 | ) | (16,865,286 | ) | |
FAQ
What were Nano Labs 's net revenues for the second half of 2023?
What were the reasons for the decrease in net revenues for Nano Labs in the second half of 2023?
What were Nano Labs 's operating expenses for the second half of 2023?
What was Nano Labs 's net loss for the second half of 2023?
What is Nano Labs 's cash and cash equivalents as of December 31, 2023?
