Diamond Equity Research Initiates Coverage on BitFuFu Inc. (NASDAQ: FUFU)
New York, New York, Nov. 13, 2024 (GLOBE NEWSWIRE) -- Diamond Equity Research, an equity research firm with a focus on small capitalization public companies has initiated coverage of BitFuFu Inc. (NASDAQ: FUFU). The in-depth 37-page initiation report includes detailed information on the BitFuFu’s business model, services, industry overview, financials, valuation, management profile, and risks.
The full research report is available below.
BitFuFu Inc. Initiation Report
Highlights from the report include:
- Rapid Revenue Growth and Expanding Market Presence: From 2021 to 2023, BitFuFu's revenue expanded from $103 million to $284.1 million, demonstrating more than a twofold increase within two years. The first nine months of 2024 alone saw revenues of $364.17 million, indicating sustained growth and an accelerating pace, reflective of effective business strategies and an expanding customer base. Net income was $10.5 million in 2023, representing a 337.5% increase compared with $2.4 million in 2022. In the first nine months of 2024 alone, net income reached $31.6 million, a remarkable year-over-year increase of approximately 520% compared with $5.1 million in the same period of 2023. This robust financial performance highlights BitFuFu’s strong market position and operational success in capitalizing on the growing demand for digital asset mining services.
- Accelerating Cryptocurrency User Adoption, Market Expansion, and Supportive Regulatory Frameworks: The global cryptocurrency user base has surged to over half a billion, reflecting broadening market acceptance and increasing institutional interest. This widespread adoption signals a shift towards more digital and decentralized financial solutions. The cryptocurrency market has grown from a niche sector to a major financial market, with a current valuation of around $2.4 trillion. Additionally, the regulatory landscape is progressively adapting to digital assets, aiming to foster innovation while ensuring robust consumer protection. This regulatory evolution reduces market uncertainty and promotes a conducive environment for further investments and innovations. The increasing acceptance of cryptocurrencies by major corporations and small businesses worldwide has expanded the appeal of this asset class, expanding its utility across various economic activities and creating opportunity for companies like BitFuFu to capitalize on growing demand.
- Asset-Light Approach and a Dual Approach Mitigating Bitcoin Price Volatility: BitFuFu employs an asset-light business strategy that effectively captures the upside potential of Bitcoin while mitigating the risks associated with its price fluctuations. This approach is distinctly advantageous as it allows the company to earn cash for the mining resources provided and convert Bitcoin to fiat currency promptly upon mining. BitFuFu's policy of selling enough of its daily mining rewards on the same day they are received helps cover hosting fees, supporting a more stable average selling price. This strategy prevents the need to sell large amounts of Bitcoin at potentially lower prices to fund operations, thus maintaining revenue stability and lessening exposure to market downturns. Moreover, BitFuFu’s business model is markedly different from traditional self-mining companies due to its integration of cloud mining solutions, which directly complement its self-mining operations. This dual approach not only reduces the revenue volatility caused by sharp swings in Bitcoin prices but also enhances the company’s ability to generate cash flow. By pre-selling hashrate at a fixed price, BitFuFu accelerates cash collection and provides upfront working capital, essential for expanding and scaling operations. Additionally, this strategy serves as a hedge against Bitcoin's price volatility by locking in revenue, regardless of where the market prices move, strategically positioning BitFuFu to benefit from Bitcoin’s potential price surges without bearing the full impact of its volatility.
- Valuation: BitFuFu holds a significant share of total mining capacity and excels through advanced mining technology, strategic partnerships, and robust financial strength, positioning it to thrive in varied market conditions. The recent Bitcoin halving and expanding Bitcoin ecosystem, driven by DeFi, NFTs, and the SEC’s spot ETF approval, boost Bitcoin’s value and demand. BitFuFu's advanced technology and efficient operations enable it to capitalize on these industry tailwinds. A blended valuation using DCF and Comparable Company Analysis methods yielded a valuation of $10.27 per share, contingent on successful execution by the company.
About BitFuFu Inc.
BitFuFu Inc. provides digital asset mining and cloud-mining services. It also offers miner rental, and miner hosting and sales services to institutional customers and individual digital asset enthusiasts. The company is based in Singapore.
About Diamond Equity Research
Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms.
For more information, visit https://www.diamondequityresearch.com.
Disclosures:
Diamond Equity Research LLC is being compensated by BitFuFu Inc. (NASDAQ: FUFU) for producing research materials regarding BitFuFu Inc. and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research. All payments are received upfront and are billed for research engagement. As of 11/13/2024 the issuer had paid us $40,000 for our company sponsored research services, which commenced 06/19/2024 and is billed annually. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The issuer has not paid us for non-research related services as of 11/13/2024. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Although Diamond Equity Research company sponsored reports are based on publicly available information and although no investment recommendations are made within our company sponsored research reports, given the small capitalization nature of the companies we cover we have adopted an internal trading procedure around the public companies by whom we are engaged, with investors able to find such policy on our website public disclosures page. This report and press release do not consider individual circumstances and does not take into consideration individual investor preferences. Statements within this report may constitute forward-looking statements, these statements involve many risk factors and general uncertainties around the business, industry, and macroeconomic environment. Investors need to be aware of the high degree of risk in small capitalization equities including the complete potential loss of their investment. Investors can find various risk factors in the initiation report and in the respective financial filings for BitFuFu Inc. Please review initiation report attached for full disclosure page.
Contact:
Diamond Equity Research
research@diamondequityresearch.com
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