Cango’s Fortunes Turn Around Following Move Into Bitcoin Mining
The company, whose main business was previously auto trading, said its revenue skyrocketed in the fourth quarter after its move into bitcoin mining
Key Takeaways:
- Cango’s revenue rose more than fivefold to 668 million yuan in last year’s fourth quarter, following its launch of a bitcoin mining operation last November
- The company will add 18 EH of new capacity by the end of this quarter, bringing its total to 50 EH, making it the world’s second-largest bitcoin miner
There’s nothing like a new business model to put some new spring into your step.
After watching its revenue dwindle for a year and a half, Cango Inc. (CANG.US) came roaring back in the final quarter of last year, following a major shift into the cryptocurrency mining business in November. This was no subtle shift either. The company’s revenue skyrocketed by more than a factor of five to 668 million yuan ($92 million) for the quarter from 130.2 million yuan a year earlier.
The latest figure not only marked Cango’s first year-on-year revenue growth since the second quarter of 2023, but was also its highest total since that quarter. And in one final impressive feat, the figure was light years ahead of the company’s forecast just three months earlier for fourth-quarter revenue of just 15 million yuan to 17.5 million yuan – quite possibly the biggest revenue “beat” of all time for any company.
The crypto shift looks set to continue for Cango, which announced a major expansion to its mining capacity in the current quarter and the potential for more in the second half of the year. The company is also aware of the risks of tying its fate to such a volatile sector, and broadly discussed some of the steps it is taking to control such risk. As a newcomer to the industry, Cango is also still on a sharp learning curve, which is reflected in its relatively high costs for each bitcoin it mines compared with some older peers. Those higher costs also owe to Cango’s asset-light business model that differs from many of its peers by requiring much lower up-front investment, but with higher operating …
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