Nano Labs Ltd (NA) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to Nano Lab's First Half of 2025 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Friday, August 15, 2025. Joining us today from Nano Labs are the company's Chairman and Chief Executive Officer, Mr. Jianping Kong; and the company's Chief Financial Officer, Mr. Bing Chen. On our call today, Mr. Kong will give you an overview of the company's performance. Mr. Chen will share the details of the company's financial results. After that, we will conduct a question-and-answer session to take your questions. Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the Securities and Exchange Commission. During today's call, Mr. Kong and Mr. Chen will deliver their remarks in Chinese, and the company's representative will provide corresponding English translation. With that, I will now turn the call over to Mr. Kong, the company's Chairman and Chief Executive Officer. Mr. Kong, please go ahead.

[Interpreted] Thank you, operator, and everyone, for joining Nano Lab's First Half of 2025 Earnings Conference Call today. On our call today, I will provide an overview of our recent development and our strategic initiatives in the future. Year 2025 marks a major transformation for the company as in light of the evolving industry landscape and the onset of a new market cycle. We focus our resources and efforts on expanding our digital assets strategic reserve as the market continues to embrace cryptocurrency transactions and cryptocurrency reserves. We have taken the decisive first step of concentrating our cryptocurrency reserve in BNB, ensuring in a new stage of development. As of the date of this earnings conference call, the company holds over 128,000 BNB. Meanwhile, building on our existing mining machine business, we continue to explore new market opportunities while maintaining stability in our current operations. The first half of 2025, we have undertaken decisive and strategic transformation since the beginning of this year. We accelerated our expansion and cooperation in the cryptocurrency field. Meanwhile, we undertook efficient yet prudent initiatives [indiscernible] to currency investments and reserves through various approaches, including the continuous expansion of our strategic cryptocurrency reserve using both financing and proprietary funds as well as the strategic equity investment in CEA, a BNB reserve company, thereby solid defining our BNB strategic reserve layout. At the same time, we expanded into the emerging stablecoin sectors as part of our diversified Web 3 strategy. Looking forward, we remain vigilant for emerging opportunities and the vast potential for innovation in the Web 3 space and the AI-driven transformative era. Through the visionary and insightful strategic planning, along with decisive and consistent execution, we believe these efforts will generate substantial value for our stakeholders and drive long-term prosperity for the company. Thank you for your support and trust. Next, I will turn the call over to our Chief Financial Officer, Mr. Chen, for a closer review of our financial results. Mr. Chen, please go ahead.

[Interpreted] Thank you, Mr. Kong. Good morning, everyone. On behalf of the management team, I will provide a brief financial overview of the first half of 2025. In the first half of 2025, our net revenue was RMB 8.28 million, USD 1.16 million compared to RMB 24.74 million in the same period last year. The decline was primarily due to the decreased sales volume of the iPollo V Series product. We recorded a gross loss of RMB 10.71 million, USD 1.5 million for the first half of 2025 compared to a gross profit of RMB 30,000 in the same period of 2024. Cost of revenue for the first half of fiscal year 2025 were RMB 18.99 million, USD 2.65 million compared to RMB 24.71 million in the same period of 2024. The decline was mainly due to the decrease in sales volume and write-down of inventory and value-added tax recoverable. Total operating expenses for the first half of fiscal year 2025 decreased by 53.5% to RMB 27.3 million, USD 3.82 million, down from RMB 58.72 million in the same period of 2024. Selling and marketing expenses dropped by 39.6% to RMB 2.62 million, USD 0.37 million compared to RMB 4.33 million in the same period of 2024. This decrease was mainly due to the decrease in sales commission and salaries. General and administrative decreased by 15.4% to RMB 21.54 million, USD 3.01 million for the first half of 2025 from RMB 25.45 million for the same period of 2024. The decrease in general and administrative expenses were primarily due to the decrease in professional fees and employee salary expenses. Research and development expenses decreased by 89.1% to RMB 3.16 million, USD 0.44 million for the first half of 2025 from RMB 28.93 million for the same period of 2024. The decrease in research and development expenses, including salary expenses, design fee, service fee, material costs, et cetera, was mainly due to the strategy of adjustment in research and development activities in 2025. Loss from operations was RMB 38.03 million, USD 5.31 million for the first half of 2025 compared with loss from operations of RMB 58.69 million for the same period of 2024. Net loss was RMB 11.78 million, USD 1.65 million for the first half of 2025 compared to a net loss of RMB 59.1 million in the same period of 2024. Basic and diluted loss per share was RMB 0.43, USD 0.06 for the first half of 2025 compared to basic and diluted loss per share of RMB 8.46 in the same period of 2024. As of June 30, 2025, the company had cash and cash equivalents of RMB 363.44 million, USD 50.77 million compared with RMB 32.43 million as of December 31, 2024. We remain confident in our business strategy and ability to execute it. We will continue to leverage the strength of our technology to capture development opportunities, drive long-term growth and create additional value for our shareholders. Now I would like to turn the call over to the operator for question-and-answer session.

Your first question comes from [ Claire Harrison. ]

My question is, why has the company choose BNB as its core reserve asset?

[Interpreted] BNB has one of the most representative crypto assets not only has a highly active ecosystem, but also demonstrates outstanding long-term growth potential and resilience, supported by its model and platform value. Therefore, we hold BNB as a key cryptocurrency for our core strategic objectives.

Your next question comes from [ Armstrong Wu. ]

My question is [ directly ] holding BNB, what other measures will the company take to strengthen its strategy reserves?

[Interpreted] We will adopt diversified approaches to advance our BNB strategic reserve plan, including acquiring, controlling or minority stakes in BNB strategic reserve companies as well as investing in enterprises with strong ecosystem synergies. These diversified measures will help us build a more stable strategic layout.

Your next question comes from [ Ella Rosenblatt. ]

My question is, will the company consider reserving other cryptocurrencies? Or will it focus solely on BNB?

[Interpreted] Currently, the company's focus on BNB as its core reserve assets is based on a comprehensive assessment of BNB ecosystem maturity, asset stability and the long-term growth potential. However, we will continue to monitor other crypto assets with strategic value and ecosystem support. In the future, we do not rule out allocating a small portion of diversified assets at the right time and in well-defined scenarios to optimize our portfolio and enhance resilience against market cycles. Overall, though our company will remain centered on BNB to maintain strategic focus and expansion strength.

Your next question comes from [ Irina Ravano. ]

Does the company have any financing plans for 2025? And what are the considerations behind such plans?

[Interpreted] The company initiatives and partially complete strategic financing in 2025. The primary purpose of this financing is to support the continued expansion of our BNB strategic reserve scale. Going forward, we will continue to consider various financing options to further support the growth of our BNB strategy reserve fund, thereby ensuring better execution of our Web3-related business initiatives.

And that concludes the question-and-answer session. Let me turn the call over to Mr. Chen for closing remarks.

[Interpreted] Thank you very much for joining this conference call. If you have any questions, please contact us through e-mail at [email protected] or reach our IR counsel, as Investor Relations [email protected]. Management will respond to your questions as soon as possible. We appreciate your interest and support in Nano Labs and look forward to speaking with you again next time.

Thank you again for attending Nano Lab's First Half of 2025 Earnings Conference Call. This concludes our call for today. We thank you all for listening in. Goodbye. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]