NEW YORK - Future FinTech Group Inc. (NASDAQ:FTFT), a diversified financial and digital technology service provider, announced Monday that its subsidiary, FTFT SuperComputing Inc., has entered into a data mining hosting agreement with Tech Solution Inc. The contract, effective from April 15, 2024, through April 30, 2025, involves hosting services for Bitcoin miners at the company's cryptocurrency farm in Norwalk, Ohio.
Under the terms of the agreement, FTFT SuperComputing will accommodate Bitcoin miners including models like the Antminer S19j Pro, with a maximum power load of 4.0 megawatts. However, the company clarified that this is not a guaranteed power load and will depend on the actual number of Bitcoin miner installations. Tech Solution will be responsible for the installation, maintenance, and operation of the servers and the associated costs.
The monthly service fee for Tech Solution will be determined by the electricity consumption of the servers, which will be measured by an independent electrical meter installed by Tech Solution to FTFT SuperComputing's servers. The Unit Hosting Fee will vary monthly, based on the average Bitcoin monthly price.
FTFT SuperComputing has committed to providing a continuous electrical power supply, ensuring the Bitcoin miners are operational 95% of the time annually, excluding 36 days reserved for regular maintenance.
Sean Liu, General Manager of FTFT SuperComputing, expressed confidence in the agreement, emphasizing the company's provision of cost efficiency, infrastructure, security, and expertise to ensure effective Bitcoin mining operations.
Future FinTech has been expanding its digital asset mining operations in the United States since announcing plans to build a cryptocurrency mining farm in December 2021. The company has since developed the plant infrastructure and upgraded the power system, anticipating that the hosting services will yield substantial returns on investment.
The company's operations extend beyond the United States, offering asset management, brokerage, and investment banking services in Hong Kong, cross-border payment solutions in the United Kingdom, and supply chain trading and finance businesses in China.
InvestingPro Insights
As Future FinTech Group Inc. (NASDAQ:FTFT) embarks on its latest venture with Tech Solution Inc. to enhance their Bitcoin mining operations, a glance at the company's financial health and market performance is essential for investors considering this stock. According to real-time data from InvestingPro, FTFT is currently trading at a low Price / Book multiple of 0.39, which may suggest that the company's market value is undervalued relative to its book value. This metric can often attract value investors looking for potential bargains.
InvestingPro Tips indicate that FTFT is quickly depleting its cash reserves, which is a crucial consideration given the capital-intensive nature of cryptocurrency mining. The company's stock is also known for its high price volatility, which may appeal to certain traders but could be a red flag for those seeking more stable investments. Moreover, FTFT has not been profitable over the last twelve months, which aligns with the adjusted P/E Ratio of -0.78, reflecting earnings challenges.
InvestingPro Data further reveals that FTFT's revenue for the last twelve months as of Q4 2023 was $34.87 million, demonstrating a significant growth of 46.0%. Despite this, the company's gross profit margin remains weak at 14.02%, and its operating income margin is negative at -29.43%, indicating that profitability is an area needing improvement.
To delve deeper into the financials and market performance of Future FinTech Group Inc., including an array of additional InvestingPro Tips, investors are encouraged to visit InvestingPro. There are 11 more InvestingPro Tips available that could further guide investment decisions. For those interested in a comprehensive analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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