Nano Labs Ltd Q4 FY2023 earnings call

• Benefited from supportive government policies and positive market trends, including Hong Kong government support for Web3.0 and the SEC's approval of the first Bitcoin spot ETF.
• Actively pursuing global market expansion opportunities through various initiatives.
• Intensive R&D efforts on Cuckoo series integrated products, with anticipated launch of enhanced versions in 2024 and upgrades to packaging technology and IPs.
• Metaverse business line iPollo Metaverse offers photography studio services with 3D scanning and printing, praised by Asian Games athletes and aiding IP digitalization.
• Continued dedication to Web3.0 industry development with ongoing R&D for AI and ZK computing chips.

In the second half of fiscal year 2023, net revenue was RMB26.1 million (USD3.7 million) compared to RMB603 million in the same period of 2022. The decrease in net revenue was mainly due to the drop in sales volume of iPollo V1 Series and B1 Series. Revenues from 3D printing products, a new product, were RMB787,000 in the second half of 2023 compared to nil in the same period of 2022. Cost of revenues for the second half of 2023 was RMB66.6 million (USD9.4 million) versus RMB549.2 million in the same period of 2022. Operating expenses for the second half of 2023 were RMB83.8 million (USD11.8 million) compared to RMB140.7 million in the same period of 2022. Selling and marketing expenses decreased to RMB5.8 million (USD0.8 million) from RMB14.3 million. General and administrative expenses dropped to RMB22.4 million (USD3.2 million) from RMB36.3 million. Research and development expenses decreased to RMB55.6 million (USD7.9 million) from RMB90.2 million. Loss from operations was RMB124.4 million (USD17.6 million) in the second half of 2023 compared to RMB86.9 million in the same period of 2022. Net loss was RMB120 million (USD16.9 million) in the second half of 2023 compared to RMB80.3 million in the same period of 2022.

• Anticipates increase in sales of V Series and B Series products in 2024 compared to 2023.
• New product lines like 3D printing expected to drive market growth.

Q: Could you explain the reason behind your underperformed trade value and also your stock price?

A: The primary reason is focusing on developing core value and products; while the market picks up, lag in stock price underplays performance but confidence in product quality for future explosive growth.

Q: Could you please explain the reasons behind the decline of the company's performance in the second half of 2023 compared with the same period of 2022?

A: Positive market trend not well reflected in sales during the period; new product launched in Q4 2023 didn't significantly contribute to second half performance, but new products in pipeline will drive growth.

Q: What are the company's expectations for the market and also the financial performance in 2024?

A: Anticipate increase in sales for V Series and B Series products in 2024 compared to 2023; new product lines like 3D printing expected to drive market increase.

Q: What are the company's initiatives to promote brand globally?

A: Management has visited other regions, engaged in discussions with industry experts and partners; continuously participates in global exhibitions and events to promote products and services.

Q: What are the considerations behind the company's agreement with shareholders to convert loans into ordinary shares?

A: Major shareholders have confidence in the future of Nano Labs and the industry; lending and converting to equity is a message of confidence contributing to future development.