2Q26 results were generally in line with our revenue expectation, while headline losses continued to reflect fleet restructuring and non-cash accounting impacts. Cango reported 2Q26 revenue of US$50.8 million, broadly in line with our US$50 million estimate, including US$47.4 million from Bitcoin mining. Net loss from continuing operations was US$81.6 million, compared with our net profit estimate of US$4 million, with the deviation largely attributable to non-cash and restructuring-related items, including US$42.9 million of impairment losses and US$8.5 million of disposal losses on mining machines. Adjusted EBITDA was a loss of US$10.7 million. While the headline loss remained significant, we believe it should be viewed in the context of the company’s deliberate fleet restructuring and continued shift from maximizing mining scale toward improving operating economics and cash flow resilience.

Mining operations continued to prioritize economics over scale, with lower cash costs partially offsetting the deliberate reduction in self-mining capacity. As of June 30, 2026, Cango’s self-mining hashrate declined to 19.8 EH/s, while leased hashrate stood at 7.7 EH/s, bringing combined operating hashrate to 27.6 EH/s. The company mined 656 Bitcoins during the quarter, compared with 1,266 Bitcoins in 1Q26. Total revenue decreased approximately 50% sequentially, which the company attributes primarily to its proactive reduction of operating hashrate as it phased out older, less efficient S19 series mining machines and transitioned some capacity to a hosted leasing model. Average cash mining cost per Bitcoin declined approximately 5% QoQ to US$73,313, supported by continued negotiations with hosting partners and lower power and hosting expenses. Cango also began implementing a Bitcoin hedging arrangement during the quarter, primarily as a risk management tool to reduce exposure to Bitcoin price volatility and improve the predictability of operating cash flows.

AI infrastructure has moved from technical validation toward early-stage commercial monetization, representing the most important strategic development since our previous update. Infrastructure construction at Cango’s Georgia LN site has been completed in early 3Q26, with the site currently able to support up to 3 MW of capacity and retaining room for future expansion. Container units have arrived on site and are being installed, while GPUs are arriving in batches. More importantly, since the beginning of 3Q26, Cango has signed its first customer contract and remains in discussions with additional prospective customers. While contracted revenue remains small at this stage, management expects to begin recognizing AI-related revenue in 3Q26. We view the first commercial contract as an important milestone, as it provides initial validation of the commercial viability of Cango’s AI infrastructure strategy and marks a transition from infrastructure build-out and technical testing toward revenue generation.

The emerging AI business model combines GPU bare-metal rental and data center colocation services, leveraging Cango’s existing power and site infrastructure while improving overall asset utilization. Under the bare-metal model, Cango intends to utilize its existing sites and power infrastructure to provide customers with a standardized GPU deployment environment. In parallel, the company is exploring colocation services to improve infrastructure utilization, although no formal colocation contract has been signed and commercial terms remain under development. Beyond Georgia, Cango has established test nodes in Texas and on the U.S. West Coast to support potential customers requiring geographically closer deployments, while also evaluating additional sites and potentially developing its own facilities. We believe this phased approach could allow the company to test customer demand and unit economics before committing substantial incremental capital.

We believe the investment case is increasingly shifting from balance-sheet repair toward execution of the company’s dual-track mining and AI infrastructure strategy. Following the substantial deleveraging achieved in 1Q26, Cango’s near-term priorities are increasingly centered on optimizing the mix between self-mining and leased hashrate, further improving mining economics, executing its initial AI deployments and converting prospective customers into contracts. As of June 30, the company held 1,056 Bitcoins, while cash and cash equivalents stood at US$10.1 million and long-term debt held by a related party remained relatively stable at US$31.2 million. Cango’s shares are currently trading at US$2.14 per share, implying a market capitalization of approximately US$88 million. We forecast CY2026 revenue of US$224 million, implying a 0.4x P/S multiple, below the peer group average of 7.5x. Looking into 2H26, we believe the key catalysts will be the initial recognition and subsequent scaling of AI-related revenue, additional customer wins, evidence of attractive economics from the Georgia deployment, and further progress in reducing mining cash costs. Successful execution could gradually reposition Cango from a pure Bitcoin mining operator toward a more diversified energy and AI compute infrastructure platform.