Chinese ASIC manufacturer Canaan just eked out a profit in Q1 thanks to a surge in bitcoin’s price and, by proxy, growing demand for bitcoin mining machines.

The company’s unaudited financials for Q1 report a net income of $200,000 from $29.6 million in gross profit. Additionally, Canaan reported that it had sold some 2 terahashes worth of mining equipment in the first quarter of the year, more than doubling the machines they sold in Q4 of 2020 when COVID-chocked supply lines undermined Canaan’s bottomline.

The modest haul was enough to send shares of the typically financially beleaguered firm up nearly 12% at press time.

Canaan CEO Nangeng Zhang said the company’s financial turnaround was “driven by the bitcoin price rally” and higher demand from customers.

“During the period we improved our mining machine production yields and secured sufficient capacity for future production,” Zhang said. “We have obtained a large number of pre-orders from long-term clients both at home and abroad,”

Canaan noted in its report that its contract liabilities for hardware, now worth $184 million, have nearly tripled since the end of last year.

Bitcoin mining migrates to North America

Notably, 78% percent of the orders underpinning these contracts are coming from outside China, Canaan noted. In prior years, this percentage point has been in the single digits.

“Our revenues generated from overseas markets increased to 78.4% of our total net revenues in the first quarter of 2021 compared to 4.9% in the same period of 2020. Looking ahead, we plan to continue investing in those areas that will help to further develop both our core bitcoin mining machine business and other business initiatives in order to sustain our growth trajectory in 2021 and beyond,” Canaan CFO Tong He said.

Canaan’s influx of overseas orders corresponds with a shift in bitcoin’s mining landscape as the Chinese government cracks down on coal-fire mines, leading miners to look elsewhere to host their operations.

In North America, mining firms are scaling aggressively and taking measures to address bitcoin’s perceived energy appetite.

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