Blockchain Technology Boom Fuels Growth For AGM Group

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AGM posted strong Q4 results and witnessed a substantial increase in revenues and gross sales>

The blockchain technology boom is serving as a powerful growth engine for upstream manufacturers

AGM plans to relocate its research center and manufacturing facilities to North America

On April 26, AGM (NASDAQ:AGMH) announced its financial results for the full year and the fourth quarter ended December 31, 2021, showcasing the company’s outstanding performance since its shift into the ASCI chip design and high-end crypto miner production.

Strong Q4 results and promising digital transformation

AGM is an integrated technology company that focuses on research and development for blockchain-oriented ASIC chips. It's one of the few companies listed on the US stock market that has capabilities for designing blockchain-oriented ASIC chips and cryptocurrency mining equipment production.

In the fourth quarter of 2021, AGM posted total revenues of $31.37m, a significant increase from $13,595 over the same period of 2020. The company’s total revenues for the full year 2021 were $36.71m, compared with only $53,305 in 2020. Revenues generated from the fourth quarter accounted for 85% of the total revenues for the whole year, largely due to the company’s new growth strategy announced last August and the completion of the company’s business transformation plan during that quarter. Moreover, the company delivered total computing power of 440,000 TH/S in the fourth quarter as product sales surged. Strong results in the fourth quarter were the result of the company’s new growth strategy, which boosted the confidence of their investors.

AGM’s gross profit ballooned to $5.88m in the fourth quarter of 2021 from $4,933 in the same period of 2020 as its revenues saw a substantial increase. It was a particularly profitable quarter for the firm, as its net income rose to US$3.84m.

Sales growth in cryptocurrency mining machines and computing equipment were the reason behind AGM’s robust Q4. Last August, AGM released KOI-C16. It is a high-performance mining machine that has a hash rate up to 113 TH/S, power efficiency ratio of 30 J/T, and 3400W of power consumption. C16's parameters have surpassed its peer miners, which includes Bitmain's Antminer S19 pro and Canaan's AvalonMiner1246.

AGM’s KOI-C16 achieved considerable success in the market, with a total of 4,896 units delivered over the last three months of 2021, which translated to a total hash rate of 440,000 TH/S. There was a considerable increase in the number of deliveries between Q3 and Q4. The surge in delivery not only speaks of the company’s increasing brand recognition in the cryptocurrency mining space, but also its strength in developing and producing top quality ASIC chips and blockchain technology.

Blockchain technology plays a key role

The digital economy, which is enabled by emerging technologies such as cloud computing, big data, Internet of Things (IoT), artificial intelligence and the like, has become a powerful engine of economic growth.

As blockchain technology matures and becomes an accelerator of digital transformation across all sectors worldwide, a completely digital world is in sight. The 2021 Worldwide Digital Transformation Predictions report from the IDC Future Space group suggested that “by 2021, prominent in-industry value chains, enabled by blockchains, will have extended their digital platforms to their entire omni-experience ecosystems, thus reducing transaction costs by 35%.” It added that “at least 30% of organizations will accelerate innovation to support business and operating model reinvention, fast-tracking transformation programs to future-proof their businesses. It also creates an opportunity for organizations to deliver value by building trust and improving efficiency across industries.”

In 2020, the added value of core industries in the digital economy accounted for 7.8% of China’s 2020 gross domestic product (GDP). It continues to play an important role in China’s pursuit of a sustainable, healthy society and economy. In its 14th Five-Year Plan (2021-25), China also highlighted the great importance attributed to the development of a digital economy to boost its GDP growth, innovation, and competitiveness.

Facing the challenges of a digital world, more and more companies are turning to new technologies to accelerate their digital transformation. This includes increasing their adoption of blockchain, which is a representative emerging technology and recognized as the underlying technology of the ‘Next Generation Internet’ (NGI). As the cornerstone of blockchain technology, IC Chip-related industries are very likely to benefit from this trend.

Upstream manufacturers such as AGM believe that they may see their business soaring as demand for blockchain technology increases. AGM said that it will continue to deliver big orders of mining machines and aims to become one of the key participants and contributors in the global fintech and blockchain ecosystem.

Amid policy changes and an uncertain regulatory and economic environment, AGM is planning to relocate its headquarters, research center, and manufacturing facilities to the United States, as well as considering the possibility of establishing its own factory. The North American mining market is less affected by regulatory hurdles, making it a prime location for developing related businesses. Moreover, AGM’s mining machines, including C16, are geared towards customers in the US and Canada.

On the company's prospects, Steven Sim, Chief Financial Officer of AGMH, commented, “2022 is the next chapter for our company. In the first quarter, our first and foremost task remains on delivering mining machines.” He noted that the firm will actively source more sizable clients as the company grows. “For top tier partners who can pay for large orders or have recurring demand, we will consider strategic partnerships, on which we will continue to allow a certain degree of customization and rebranding of our products,” Sim added.

References:

Plan focuses on digital economy development during 14th Five-Year Plan period (www.gov.cn)

AGMH, crypto miner, btc miner, btc cash miner, high-end crypto miner (agmprime.com)

IDC FutureScape: 全球数字化转型2021年预测——中国启示

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AGMHAGM Group Holdings Inc

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