BitDeer Business Analysis: Self-Developed Chips and AI Computing Power Dual-Engine Drive

Bit Deer (NASDAQ: BTDR) recently announced its operational data for November, highlighting that the A2 mining machine (Sealminer A2) has begun mass production, with the first batch of 30,000 units for external sale.

Self-developed Chips and Mining Machine Sales: Core Competitiveness

The core competitiveness of mining machine manufacturers lies in their self-developed chip capabilities. In the past six months, Xiao Lu successfully completed the first batch of A2 and A3 mining machine chips. According to public information, the operating parameters of the A2 mining machine are already leading among all mining machines available for sale and 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 mining machine product globally and the most energy-efficient based on known parameters. It is anticipated that the A3 mining machine will primarily be used for deploying self-operated Computing Power in the short term, with a low probability of external sales.

Electric Field Deployment: Significant Cost Advantages

As of the end of November, Xiao Lu has completed the deployment of a total of 895MW of power plants in the United States, Norway, and Bhutan. An additional 1645MW of projects are under construction, with 1415MW expected to be completed by mid to late 2025. The company also plans to add over 1GW of power plant capacity in 2026. Notably, the average electricity price of Xiao Lu's self-operated power plants is less than 0.04 USD/kWh, which holds an absolute leading advantage in the industry.

Self-operated Mining Farm Economic Analysis

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

Future Development Strategy

1. Mining machine sales and self-use ratio: Xiao Lu expects that by mid-2025, the power reserve of the power plant will reach 2.3GW. If fully equipped with A3 mining machines, the self-operated Computing Power may approach 220EH/s, accounting for about 20% of the total network Computing Power by the end of 2025. Considering cash flow needs, the company may balance the ratio of mining machine sales to self-use.

2. Market Competition: Little Deer has a competitive advantage in mining machine performance and self-operated costs. With the development of high-end process chips, the mining machine industry will also be affected by the upstream competitive landscape.

AI Computing Power: The Second Growth Curve

The little deer has begun deploying Nvidia H200 chips in the TIER3 data center of its intelligent cloud services, laying out the AI Computing Power market. The company plans to invest at least 200MW of electricity in the short term to deploy high-end chips and start providing cloud computing services for clients such as MEGA 7, referencing COREWEAVE's business model.

Investment Recommendations and Valuation

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 in sync, forming a combined force. According to the valuation method of mainstream North American mining companies at an average of $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 of approximately $20.4 billion to $37.4 billion, which presents an upside potential of 4.8 to 9.7 times compared to the current stock price.

Investment Risks

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