
Event: Bit Deer (Btdr.US) released its fourth quarter financial report for the fiscal year 2024. The company reported fourth quarter revenue of $69 million, a 40% decrease from $114.8 million in the same period of 2023. Among this, the self-operated business revenue was $41.5 million, a year-on-year decrease of 11.5%. Gross profit was $5.1 million, with a gross margin of 7.4%, significantly down from $27 million and 23.5% in the same period of 2023. Adjusted EBITDA was negative $3.8 million, compared to positive $3.8 million in the same period of 2023. The net loss was $531.9 million, mainly due to non-cash derivative instrument losses of $479.8 million, including a loss of $55.8 million from Tether warrants and a loss of $413.7 million from convertible bonds.
Commentary:
The company’s prepaid accounts in the fourth quarter reached $310 million, mainly for payments to TSMC for chip production, with SEAL02 amounting to $190 million and SEAL03 production costs at $52.8 million (including risk wafers). The $190 million corresponds to approximately 12,700 4NM wafers, equivalent to about 127,000 SEAL02 mining machines, corresponding to 31.2EH/s computing power, meeting the company's guidance that this chip production quantity can satisfy the goal of reaching 40EH/s for its self-operated mining site by the end of 2025 as stated in the Guosheng conference call.
2. The company further strengthens its energy reserves. The operational power projects completed from 2024 to 2026 will reach 895MW, 2057MW, and 2639MW respectively.
3. The company acquired the Alberta gas power station project in Canada and plans to fully deploy SEAL03 mining machines, achieving a total hash rate of 9EH/s. The base electricity price is $0.20–0.25 per Kwh, which is only about half of the electricity prices of the company’s currently built or under-construction power projects, making it the known lowest-cost self-operated mining project globally.
4. The company will collaborate with TLM Group (a global leader in HPC/AI engineering construction) to develop its HPC/AI projects, planning to establish a data center with a power capacity of 570MW in Ohio to support more inference-side cloud computing power.
5. The company stated in the Guosheng conference call that after the completion of financing for the shelf issuance project and the convertible bonds project, the authorized $1 billion ATM project has hardly begun. As of the end of the fourth quarter, the company had $476 million in cash and $78 million in Bitcoin assets on hand. The company will only initiate the ATM financing project if TSMC increases the amount of chips allocated in the next three quarters.
Investment Recommendation: After the release of Bit Deer’s fourth quarter report, the stock price dropped by 29.31%, attributed to the recent weakness in Bitcoin prices, fourth quarter performance falling short of expectations, and the one-time release of risks such as losses from Tether warrants and non-cash derivative financial instruments. Looking ahead to 2025, the company’s goal of 40EH/s computing power is not very difficult to achieve; whether it can further expand the scale of self-operated computing power depends on TSMC's increased chip production and the advancement of the SEAL03 product (currently both are within the company's expectations), with significant upside potential. Both the mining machine sales business and self-operated mining site business will start to ramp up in the first quarter. Given the prior significant stock price correction, positive business outlook, and the rebound of Bitcoin prices, this will reinvigorate the resonance of Bit Deer’s own alpha and the industry beta.
Investment Risks: Further adjustment risks in Bitcoin prices, and risks related to TSMC's chip production falling short of expectations.