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.
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