The9 Limited Q4 FY2020 Earnings Call

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The9 Limited 2020 Financial Results Summary

  • Net Income: Reported a net income of RMB 397 million (US$60.8 million) for the year ending December 31, 2020, compared to a net loss of RMB 190.6 million (US$29.2 million) in 2019. This turnaround was primarily due to gains from the disposal of subsidiaries and real estate.
  • Cryptocurrency Mining Business Expansion:
    • In January 2021, The9 entered into investment agreements to develop its crypto mining business, issuing shares and warrants based on market cap milestones (US$100M to US$1B).
    • NBTC Limited (wholly-owned subsidiary) signed agreements with MicroBT and Bitmain to purchase Bitcoin mining machines, securing 24,000 Antminer S19j units for US$82.8 million and 5,000 WhatsMiner units with an initial deposit of US$1.4 million.
    • As of the update, 922 WhatsMiner units have been deployed delivering approximately 66PH/s hashrate.
  • Acquisition of Mining Machines via Share Issuance:
    • February 2021: Acquired 26,007 Bitcoin mining machines via issuance of 26.9 million ordinary shares at US$11.18/ADS (approx. 549PH/s hashrate).
    • Later in February 2021: Acquired 8,489 mining machines via issuance of 3.8 million shares at US$23.35/ADS (approx. 156PH/s hashrate).

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Operator: Good evening and welcome to The9 Limited 2020 Unaudited Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] The conference is being webcasted. I would now like to turn the conference over to Connie Sun from The9 Limited IR Department. Please go ahead. Connie Sun: Thank you, operator. Good evening and welcome to The9 Limited 2020 financial results conference call. I’m Connie Sun from The9 Limited IR Department. First, before we start the presentation and the Q&A, we would like to remind you that this includes forward-looking statements, which are underlined by a number of risks and uncertainties and may not be relied in the future for various reasons. Information about general market condition is coming from a variety of sources outside of The9. Next, let me now introduce the management team on the call [tonight]. [Indiscernible] shareholder of The9 Limited; Chris Shen, President of The9 Limited; George Lai, CFO of The9 Limited; and ZhiFang Cai, [CEO of NBTC Limited]. After our presentation, we will open the floor for the questions. Now, I will turn the call over to our CFO, George. George Lai: Good day ladies and gentlemen. Thanks for participating in our discussion of The9 2020 financial results and our recent developments on the cryptocurrency mining business. For the year-ended December 31, 2020, net income attributable to holders of ordinary shares was [RMB397 million] or [US$60.8 million], compared to a net l

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