Cango Group (CANGO) (Stock Code: CANG) released the core highlights of its Q2 2025 financial report, showcasing strong revenue and profit performance. The reported losses from two one-time accounting adjustments are not indicative of operational losses, as the company aims for high-value scenarios in "AI computing power and energy synergy."

I. Core Financial Indicators: Strong Revenue and Profit Performance

1. Bitcoin has become the core business of the company: In Q2 2025, the company achieved total revenue of 1 billion RMB, with the Bitcoin mining business contributing 989 million RMB, accounting for over 98% of total revenue. After a 9-month transformation period, Cango has become one of the world's second-largest mining companies by computing power.

2. Profitability highlights business resilience: Adjusted EBITDA reached 710 million RMB, effectively excluding non-operational factors, accurately reflecting the true profitability and operational health of the Bitcoin mining business.

3. Cost control builds competitive barriers: This quarter, comprehensive cost control was at $98,636, significantly lower than similar companies in the industry, providing solid support for sustained profitability and risk resistance.

4. Cash reserves ensure strategic advancement: As of the end of the reporting period, the company had cash and cash equivalents of $118 million, providing ample liquidity reserves for future business expansion, strategic investments, and market volatility responses.

II. Key Quarterly Events: Computing Power Breakthrough and Infrastructure Upgrades

1. Computing power scale ranks among industry leaders: This quarter, the company successfully reached a computing power of 50 EH/s. As of June 30, 2025, this computing power accounted for approximately 6% of the total computing power of the global Bitcoin network, marking a key breakthrough in core production capacity and further consolidating its industry position.

2. Strategic acquisition optimizes operational layout: In August, the company completed the acquisition of a 50-megawatt mining facility in Georgia, USA. This acquisition not only effectively reduced electricity procurement costs and improved operational stability but also secured core infrastructure to support future business growth, laying the foundation for further expansion of computing power.

III. Core Model Interpretation: Three Competitive Advantages of the "Light Asset Model"

The company adheres to a light asset operation strategy centered on "prioritizing strategic procurement of second-hand mining machines," achieving rapid and low-cost expansion of computing power. The core advantages of this model can be reflected in three aspects:

(A) Cost Advantage: Mining costs below market prices create excess value for investors

Through refined operations, the company has controlled the comprehensive cost of mining a single Bitcoin to approximately 98,000 RMB, significantly lower than the current Bitcoin market price, ensuring stable business profitability. For investors, purchasing company stock is equivalent to indirectly holding Bitcoin-related assets at a "cost below market price," with this cost advantage supported by actual operational data, providing higher cost efficiency compared to directly purchasing Bitcoin in the secondary market.

(B) Leverage Advantage: "Dual Leverage" amplifies returns, aligning with high elasticity demand

The business operation builds a dual leverage system of "computing power leverage + operational leverage": on one hand, expanding computing power through financing methods such as Bitcoin collateralized medium to long-term loans, achieving "computing power leverage"; on the other hand, optimizing capital utilization efficiency through reasonable debt in daily operations, achieving "operational leverage." The amplification effect of this dual leverage is superior to directly purchasing Bitcoin or Bitcoin ETFs, maximizing the return elasticity from Bitcoin price increases, better matching the needs of investors seeking high returns.

(C) Asset and Equity Advantage: Efficient operations safeguard shareholder rights, avoiding dilution risks

Compared to similar companies in the industry (such as MARA), the company has a more efficient net asset and operational asset allocation while maintaining the same computing power scale of 50 EH/s, without needing to cover operational expenses through "frequent stock issuances." Some peers, due to weaker cost control capabilities, rely on stock issuances to alleviate financial pressure, leading to severe dilution of shareholder equity; the company's operational model effectively safeguards shareholder interests, avoiding the weakening of investors' actual returns due to equity dilution.

IV. Explanation of Net Loss: One-time accounting adjustments, not operational substantive losses

The net loss reported this quarter primarily stems from two one-time accounting adjustments, which temporarily lowered reported profits but laid a solid foundation for future business expansion, representing strategic investments for long-term growth rather than substantive operational losses.

The specific reasons are as follows:

1. Non-cash losses from 18E mining machine delivery: The pricing for this mining machine transaction was locked in October 2024, with the corresponding issuance price at approximately $2 per ADS; as of June 30, 2025, the company's stock price had nearly doubled, leading to a book loss when reassessed at current fair value. This loss is reflected in the profit statement under "impairment loss from mining machine."

2. One-time loss from asset disposal in China: During the asset divestiture process, a third-party professional evaluation indicated that the fair value of the related assets was lower than their original book value, resulting in a one-time impairment loss, which is reflected in the profit statement under "Net investment income" as -$80.89 million.

V. Future Strategic Direction: Evolving from "Single Mining" to "Energy + HPC" Comprehensive Platform

The company will advance its strategic transformation in phases, gradually expanding from pure Bitcoin mining to an "Energy + HPC (High-Performance Computing)" comprehensive service platform. In the short term (over the next few quarters), it will focus on the following three key actions while laying out long-term HPC business:

(A) Short-term core actions: Strengthening foundations, optimizing operations

1. Maximizing the value of existing computing power assets: Fully releasing the production potential of the 50 EH/s computing power cluster by enhancing operational precision and promoting advanced mining machine replacements to continuously optimize output efficiency.

2. Deepening cost control advantages: Prioritizing "reducing core costs" as a key direction, advancing the acquisition of low electricity price mining sites to further compress electricity costs and consolidate industry cost competitiveness.

3. Expanding green electricity and energy storage business: Continuously enhancing the operational capabilities of green energy (green electricity) and energy storage projects. This not only directly reduces electricity costs for mining operations but also accumulates renewable energy management experience, which can create diversified revenue through self-use or external sales of green electricity in the future.

(B) Long-term strategic layout: Entering the HPC field, exploring new growth curves

On the premise of solidifying short-term business foundations, the company targets high-value scenarios of "AI computing power and energy synergy" and has initiated planning for HPC pilot projects. Specific pilot projects are expected to be launched in the first half of 2026, marking a substantial advancement in the company's transformation into an "Energy + HPC" comprehensive platform.

This article is from a submission and does not represent the views of BlockBeats.

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