BitDeer Business Analysis: Self-developed Chips and Computing Power Layout Drive Dual Wheels

Bit Deer (BTDR) recently announced its operational data for November, attracting market attention. Its self-developed A2 mining machine has begun mass production, with the first batch of 30,000 units sold externally.

In-house Chip and Mining Machine Sales: Core Competitiveness

The little deer successfully completed the first batch of A2 and A3 mining machine chips in the past six months. According to public information, the operating parameters of the A2 mining machine have surpassed all other mining machines available and in operation on the market. The A3 mining machine, which has not yet been officially released, is expected to become the largest single hash Computing Power in the world with the most optimal energy consumption ratio, and it may be prioritized for deploying self-operated Computing Power in the short term.

Electric Field Layout: Significant Cost Advantages

As of the end of November, Xiaolu has completed the deployment of 895MW power plants in the United States, Norway, and Bhutan, with another 1645MW projects under construction, of which 1415MW is expected to be completed in the second half of 2025. The company plans to add more than 1GW of power plants in 2026. It is worth noting that Xiaolu's self-operated power plants have an average electricity price of less than $0.04 per kilowatt-hour, which is in an absolute leading position in the industry.

Self-operated Mining Farm Profitability Analysis

According to model predictions, the shutdown price for the self-operated mining farm of Little Deer is $35,000 for Bitcoin. When the Bitcoin price exceeds $150,000, the pre-tax profit growth rate of the self-operated mining farm will exceed the increase in Bitcoin. If Bitcoin reaches $200,000, the pre-tax profit margin of the self-operated mining farm could approach 80%.

Market Concerns and Responses

1. Mining Machine Sales and Self-Use Ratio: By the end of 2025, it is expected that the self-operated Computing Power of Xiaolu may account for about 20% of the entire network. Considering cash flow demands, the company may need to balance mining machine sales and self-use.

2. Competition with Bitmain: Little Deer has competitive advantages in mining machine performance and self-operated costs. With the development of high-end process chips, the upstream competitive landscape will also impact the mining machine industry.

AI Computing Power: The Second Growth Curve

The company has begun deploying Nvidia H200 chips at the TIER3 data center, focusing on AI Computing Power. It plans to invest at least 200MW of electricity in the short term to deploy high-end chips to serve cloud computing customers.

Investment Advice

Xiaolu is currently in a favorable position, with the first growth curve (mining machine sales and self-operated mines) and the second growth curve (AI Computing Power) expected to develop simultaneously. Based on the average valuation method of mainstream North American mining stocks at $170 million/EHs, it is estimated that Xiaolu's actual self-operated mines will reach 120-220 EH/s in the next two years, corresponding to a market value that could be between $20.4 billion and $37.4 billion, representing a potential increase of 4.8 to 9.7 times compared to the current stock price.

Investment Risks

1. Bitcoin Price Volatility Risk
2. Possible sanctions may lead to risks for TSMC's current chips.