SINGAPORE, Sept. 12, 2024 /PRNewswire/ -- Canaan Inc.
(NASDAQ: CAN) has been recognized for its solid operations by
Rosenblatt, a Wall Street investment firm that defines Canaan Inc.
as "promising" in light of the upcoming BTC bull market, and
initiating with a "buy" rating and a $3 price target for its stock over the next 12
months. The report shows that Canaan is significantly undervalued,
trading at 0.6x EV/Sales, compared to 3.9x for its peer group, an
undervaluation that stems from concerns about the company's
profitability and its perceived role as a hardware provider.
However, As Canaan adjusts and continues to execute its strategy of
expanding self-mining operations—using internally developed
hardware in low-cost areas, and Canaan's star products
Avalonminer's product features, resistance to corrosion, salt
and humidity, which helps it mine in low-cost and harsh
environments, such as West Texas
in the U.S and in the Middle East
regions, the company is expected to benefit from bitcoin bull
market. Rosenblatt expects its valuation to rise and come closer to
the valuations of co-location service data center operators.
The agency's report concludes:
- BTC Bull Market Opportunity to Drive Demand for Mining
Machines: As the creator of the world's first Bitcoin ASIC chip
miner, Canan's Avalonminer offers superior performance, energy
efficiency, and durability. Demand for the A14-based rigs doubled
revenue sequentially in 2Q24 following the April 2024 Bitcoin halving event; demand for
Avalonminers A15 series and the upcoming A16 series in the product
pipeline will continue to rise as Canaan continues to push the
boundaries of its products.
- Adjusting Strategy to Focus on Expanding Self-mining
Facilities, particularly in North
America: Canaan's management plans to increase captive
mining capacity in North America
from the current 0.65EH/s to 10EH/s by H1 2025, which is considered
as an important move to vigorously develop captive mining revenues
in a predictable growth market. In addition, Canaan is prioritizing
the development of energy-efficient mining solutions. This not only
positions the company favorably among environmentally conscious
customers, but also enhances its competitive edge in the
market.
- Extensive Patent Portfolio: Canaan's strategy for
sustainable growth includes a robust patent portfolio, with
numerous patents related to ASIC chip technology and HPC. This
intellectual property forms the backbone of Canaan's competitive
advantage and supports its long-term growth strategy.
- Actively Exploring Strategic Alliances and
Partnerships: In addition, Canaan actively collaborates with
other technology firms and research institutions to drive
innovation and expand its market reach. These partnerships enable
Canaan to stay at the forefront of technological advancements and
offer cutting-edge solutions to its customers.
- Conclusion: Rosen Blatt recommends owning shares of
Canaan based on several key drivers: the rising Bitcoin hash rate
and price appreciation, driving heightened demand for Canaan's
next-generation mining rigs; Canaan's strategic focus on expanding
its more profitable self-mining operations with a focus on
North America; and Canaan's
ruggedized rigs which enable mining in low-cost, harsh
environments.
Rosenblatt is a research and investment banking boutique and
agency focused on institutional brokers, providing specialized
services in financial services, market structure and research.
In light of the 3-parties' rating report, Canaan believes it
offers a promising outlook for the company's future growth
potential and a positive recognition of its value. It could
potentially contribute to enhancing public investor confidence,
maintaining the company's share price, and improving its capital
market image, which could in turn facilitate the company's
long-term development.
About Canaan Company: Established in 2013, Canaan Inc. (NASDAQ:
CAN) is a technology company focusing on ASIC high-performance
computing chip design, chip research and development, computing
equipment production, and software services. Canaan has extensive
experience in chip design and streamlined production in the ASIC
field. In 2013, under the leadership of Mr. Nangeng Zhang, founder
and CEO, Canaan's founding team shipped to its customers the
world's first batch of mining machines incorporating ASIC
technology in bitcoin's history under the brand name, Avalon. In
2019, Canaan completed its initial public offering on the Nasdaq
Global Market. Contact pr@canaan-creaive.com for more
information.
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