One-glance verdict
Not enough data
Fair value unavailable
Not enough cash-flow history to value this one with our method.
Fundamentals snapshot
The9 Limited
NCTY · NCM · Financial Services · Capital Markets
Current price
$4.02
52-week range
$3.14 - $11.60
Market cap
$61.40M
Balance sheet
Distressed
-10.65x Concerning
Net debt $29.77M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 0.8% last year.
- Reward Returns 7.1% on equity, ahead of 75% of its peers.
- Risk Net debt grew 874.7% over 3 years.
- Risk Operating margin compressed from -393.8% to -1232.8% over 3 years.
What this company does
The9 Limited
The9 Limited's main business is "mining" for cryptocurrencies, which means using powerful computers to solve complex math problems to earn new digital coins. The company also has a smaller business developing and running online games. Since most of The9's revenue (the total money a company brings in from sales) comes from its crypto mining, its financial success is closely tied to the often-unpredictable prices of these digital currencies.
How the company got here
Founded in 1999, The9 Limited started as a successful online game company in China, best known for operating the hugely popular game 'World of Warcraft' for many years. Facing changing market dynamics, the company made a major shift in strategy around 2021, pivoting to focus on the world of digital currencies. This new direction involved setting up large-scale operations for cryptocurrency mining. More recently, The9 has been blending its gaming roots with its new tech focus, moving into AI-powered game creation and other ventures in the artificial intelligence space.
What it actually does
The9 Limited is now a company with two main business lines: mining for digital currencies like Bitcoin and operating online game services. Think of them as having one foot in the world of digital money and the other in the world of online entertainment. They run powerful computers that work to earn new cryptocurrencies and also provide platforms and services for people to play and even create their own games. The company operates globally, with its activities spread across Asia, Europe, and North America.
Cryptocurrency Mining
This part of the business is like a high-tech treasure hunt for digital money. The9 operates a large number of specialized computers that work around the clock to solve complex math problems, a process which helps to verify and secure cryptocurrency networks. In return for providing this computing power, often called a 'hash rate', the company is rewarded with new units of cryptocurrency, primarily Bitcoin. This has been the company's largest source of actual sales, or revenue (the money it brings in from its main business activities), in recent years.
Online game services
Returning to its original field, this segment is now focused on a new platform called 'the9bit'. This isn't just about playing games; it's an ecosystem where users can use AI-powered tools to create their own games, a concept known as AI-Generated Gaming Design. The platform has its own digital token, the '$9BIT', which is used within this gaming world. While this is a newer and smaller part of the business in terms of traditional sales, the company often reports significant income from the value of the 9BIT tokens it receives.
What management is betting on now
Management is heavily focused on the future of artificial intelligence, particularly in gaming. Their main bet is on 'the9bit', an AI-powered platform that allows users to create their own games, hoping to build a large and engaged community. They believe that combining AI-generated content with a digital token economy will be the next big thing in interactive entertainment. Beyond gaming, the company is also exploring other AI opportunities, such as its investment in an AI-driven drug discovery company, signaling a broader ambition to be a diversified high-tech business.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$15.43M
Net income
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Diluted EPS
-0.03
Operating cash flow
$-4.54M
Free cash flow
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Sources
Revenue
$15.30M
Net income
$-10.06M
Diluted EPS
-0.01
Operating cash flow
$-6.06M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value — vs current price $4.02
We couldn't calculate a fair value right now.
Is it drowning in debt?
Distressed
Net debt $29.8M. Interest coverage -10.6x.
Net debt
$29.77M
Interest coverage
-10.65x
The9 Limited's profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
NCTY
BASELINE
The9 Limited
Total debt $31.67M Interest coverage -10.65x This is the baseline the peer rows are being compared against.
Total debt $70.66M Interest coverage -52.72x Neither company has much profit cushion over interest right now.
Total debt $1.95B Interest coverage -1.86x Neither company has much profit cushion over interest right now.
Total debt $7.67B Interest coverage -3.24x Neither company has much profit cushion over interest right now.
What you should know
The case for and against NCTY
2 Rewards
2 Risks
Rewards
-
Revenue grew 0.8% last year.
-
Returns 7.1% on equity, ahead of 75% of its peers.
Risks
-
Net debt grew 874.7% over 3 years.
-
Operating margin compressed from -393.8% to -1232.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
—
P/B
0.68x
P/S
0.97x
EV/EBITDA
-0.62x
PEG ratio
-0.27x
Profitability
How much profit each dollar creates
Gross margin
12.3%
Operating margin
-1,232.8%
Net margin
69.5%
ROE
7.1%
ROA
-29.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.37x
Current ratio
2.57x
Quick ratio
0.07x
Total debt
$31.67M
Total cash
$1.90M
Growth
How the business has been compounding
Revenue TTM
$73.19M
Revenue 5Y CAGR
-7.7%
EPS TTM
-0.89
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-39.56M
Free CF TTM
$-6.53M
FCF margin
-8.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2009-01-29