KUALA LUMPUR - VCI Global Limited (NASDAQ:VCIG), a diversified holding company, has announced a strategic partnership with Emerging Hub Limited to develop a large-scale Bitcoin mining operation. The collaboration aims to establish a 35-megawatt Bitcoin mining farm, which is projected to house 10,000 mining rigs with the capacity to generate over 2 exahashes per second.
According to recent data from Statista, as of June 2024, Bitcoin's market capitalization has reached US$ 1.39 trillion, showcasing a significant annual growth rate of 178.4%. This growth underscores Bitcoin's increasing prominence as a store of value in the cryptocurrency market.
The first phase of the partnership is expected to produce over 500 Bitcoins within its initial year. With the current market price exceeding US$ 65,000 per Bitcoin, the total value of the mined cryptocurrency could amount to approximately US$ 130 million, excluding potential price increases. Over a five-year period, the partners aim to mine more than 2,000 Bitcoins.
VCI Global is set to secure a 30% share of the mined Bitcoin. The company has already begun discussions with government bodies and a key energy supplier to ensure the use of Liquefied Natural Gas (OTC:LNGLF) (LNG), which will provide a sustainable and efficient energy source for the mining operations.
Dato Victor Hoo, Group Executive Chairman and CEO of VCI Global, emphasized the significance of Bitcoin as a secure digital asset with limited supply and potential for value appreciation, especially as it gains mainstream acceptance through various financial products and regulatory approvals.
VCI Global, headquartered in Kuala Lumpur, operates across multiple sectors including consulting, fintech, AI, robotics, and cybersecurity. The company is actively involved in the Asia Pacific region, as well as in the United States, Europe, and the Middle East.
The information for this article is based on a recent SEC filing.
In other recent news, VCI Global Limited has announced a significant increase in its fiscal year 2023 performance, with a 145% surge in revenue to $19.8 million and a 57% rise in net income to $7.2 million. The company attributes this growth to strong performance across all business segments, including IPO advisory and technology consultancies. Looking forward, VCI Global has issued a revenue guidance for fiscal year 2024, predicting a significant increase in net sales and operating income.
In a strategic move, VCI Global has also announced plans to establish a network of artificial intelligence (AI) computing data centers equipped with high-performance water-cooled H200 Graphic Processing Units (GPUs). The first of these data centers is set to be constructed in Malaysia by 2025, with expansion plans into Europe and the United States by the end of the same year.
These centers aim to tap into the rapidly growing GPU as a service (GPUaaS) market, projected to expand at a compound annual growth rate of 35.8% from 2024 to 2032.
These recent developments reflect VCI Global's trajectory towards becoming a high-performing company, as expressed by Executive Chairman and CEO Victor Hoo.
InvestingPro Insights
VCI Global Limited's (NASDAQ:VCIG) strategic foray into Bitcoin mining comes at a time when the company's financial metrics highlight several strengths and challenges. With a market capitalization of $38.8 million, VCIG's partnership to develop a Bitcoin mining operation is a significant step towards diversifying its revenue streams. Notably, the company's impressive gross profit margins, which stand at 62.0% for the last twelve months as of Q4 2023, suggest that VCIG is efficient in its core operations, potentially providing a stable foundation for its venture into the cryptocurrency sector.
InvestingPro Tips indicate that VCIG holds more cash than debt on its balance sheet, which is an encouraging sign for investors considering the capital-intensive nature of Bitcoin mining. Moreover, with a low earnings multiple of 5.13 for the last twelve months as of Q4 2023, the stock could be appealing to value investors. It is worth noting that the stock has faced significant downward price pressure, having fallen 74.56% over the last year, which may reflect market sentiment but also presents a potential entry point for investors who believe in the company's long-term prospects.
Despite recent price declines, VCIG's strategic partnership in Bitcoin mining could leverage the company's technological expertise and innovative drive. For investors looking to delve deeper into VCIG's financials and future outlook, InvestingPro offers additional insights. There are 13 more InvestingPro Tips available that could provide further guidance on VCIG's stock performance and financial health. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for a comprehensive analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.