Mining Rig Maker Canaan’s Stock Falls 11% on Disappointing Outlook

Analysts are wary as management notes challenges in the industry.

AccessTimeIconSep 16, 2021 at 12:26 p.m. UTC
Updated May 11, 2023 at 5:48 p.m. UTC

Chinese mining rig maker Canaan’s shares dropped 11% on Wednesday as the comments management made following the release of the company’s second-quarter results disappointed analysts.

  • The company estimated that its revenue for the third quarter will rise 10% to 30% from the second quarter, which translates to $184.3 million and $217.8 million. Analyst estimates weren’t available.
  • Even though Canaan reported a record profit and revenue for the second quarter, investors didn’t take well to “management’s lackluster guidance and mention of industry-wide challenges, including wafer supply instability, regulatory uncertainties and bitcoin price fluctuations,” Esme Pau, head of emerging technology research at China Tonghai Securities, told CoinDesk in a WeChat message.
  • On the company’s earnings call yesterday, investors pressed executives about wafer procurement in light of a global chip shortage and rising demand for mining rigs worldwide, according to a transcript by Seeking Alpha.
  • CEO Nangeng Zhang said that the company is negotiating with foundry partners “for the next nine to 18 months, mainly till the second half of next year.” Canaan hasn’t received “any verbal or written guarantees” from foundries about additional capacity in 2022, Zhang added.
  • For the second quarter, Canaan said it sold a record 5.9 million terahashes per second of computing power, up 200% from the first quarter and up 127% from the second quarter of 2020. Revenue rose more than sixfold to $167.5 million from the same period a year earlier, while net income was $37.9 million, compared with a loss of $2.6 million in the year-earlier period.
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    Eliza Gkritsi

    Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.