Bitdeer Technologies is a buy, Roth says

Following the company’s September update, ROTH MKM analyst Darren Aftahi remains bullish on Bitdeer Technologies Group (Bitdeer Technologies Group Stock Quote, Chart, News, Analysts, Financials NASDAQ:BTDR).

On October 2, Bitdeer issued a production and operations update for September, detailing its mining rig and noting that it had self-mined 164 Bitcoins.

“We are thrilled with the successful tape-out of our SEAL02 chip,” CEO Linghui Kong said. “The 13.5 J/TH efficiency, indicated at low voltage in ultra power-saving mode, is at the forefront of the industry’s efficiency standards and showcases our R&D team’s innovation and commitment to reshaping the ASICs market. Given recent deal announcements in the industry, we believe Bitcoin miners are seeking more diversified technology solutions and supply chain flexibility. Our second-generation chip will power our SEALMINER A2 mining machines, which is scheduled to go into mass production and be released to the market by the end of 2024.”

The analyst summarized the development.

“Positive results from BTDR’s ~790MW of Ohio capacity highlight significant potential for HPC growth. The next step is solidifying feasibility and beginning construction. Although site delivery is likely not until 2026-27, progress on HPC could drive substantial revaluation, as Ohio offers the potential for $850M in ARR and 60%-70% profit margins at scale, if fully developed. We believe demonstrating tangible advancement in HPC (LOIs and signed customer contracts) would outweigh any BTC gains from vertical integration and are likely the next catalyst for shares”

In a research update to clients October 3, Aftahi maintained his “Buy” rating and price target of $14.00 on BTDR.

The analyst thinks the company will post EBITDA of $46.7-million on revenue of$356.7-million in fiscal 2024. He expects those numbers will improve to EBITDA of $57.8-million on a topline of $451.9-million the following year.

“We still anticipate self-mining to receive a ~3.4 EH/s benefit in 4Q from the initial deployment of the first batch of SEALMINERs. We also add back some hosting capacity and hash rate, but at a much lower run rate than prior. 3Q revenue falls ~23% to $67M while FY24 and FY25 revenue fall ~10%/8%, respectively, driven by lower avg. hosting hash rate (currently ending FY24 and FY25 at 9.2/10.7 EH/s vs prior estimates of ~12.3/10.4). The lower revenue and profits from hosting drive down adj. EBITDA by ~$14M in 3Q and ~$12M in 4Q24, which carry into FY25,” a Aftahi added.