The third quarter was difficult for mining rig manufacturers, as the impact of COVID-19 continues to weigh heavily in space.
The shares of one of China’s „Big Three“ crypto-currency mining companies are in free fall on Monday after reporting another quarterly loss, highlighting the operational challenges imposed by the COVID-19.
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Canaan Creative, which manufactures cryptomining equipment, released its third quarter financial report on Monday. The company recorded a net loss of $12.7 million, or 54 cents per share, on revenue of $24 million. Although quarterly revenue grew 5%, the company’s net loss quadrupled.
Quanfu Hong, Canaan’s chief financial officer, put a damper on the release of net losses by stating that demand for mining equipment increased during the quarter, a trend that is expected to continue into the final stretch of 2020.
„We have received a large number of pre-sale orders that are scheduled for delivery starting in the fourth quarter of 2020.
Canaan’s stock price, with a steady low since its debut on November 19, fell more than 10% on Monday. The last time stocks were seen in the infirmary was with losses of about 9.5%.
Canaan shares by Yahoo Finace
Canaan collapsed on par with the general financial markets in February. After a brief recovery, stocks resumed their decline during the spring. They would eventually stabilize below USD 3.00 before experiencing a sharp rise in early November, possibly due to a correlation with Bitcoin (BTC).
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Together with Bitmain, Ebang and Microbt, Canaan dominates the global SHA-256 mining market. Due to the industry’s extensive consolidation, it is possible that only „2 or 3 investors will survive in the long term“, according to research by the Bitmex crypto derivatives exchange.
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The Chinese mining industry may have suffered the most due to supply challenges related to COVID-19, according to cryptanalysis company Tokeninsight. Beyond the immediate impact of the pandemic, the sector appears to be in growth mode, especially in the manufacturing sector, where „new players are eager to enter the field.