Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
according toCoindeskAuthor | Qin Xiaofeng
Produced | Odaily
according toCointelegraphaccording toAccording to news, Canaan Creative, the world’s second largest mining machine manufacturer for bitcoin, has officially submitted its initial public offering prospectus to the US Securities and Exchange Commission (SEC) on October 28, local time.according to
According to reports, in July this year, Canaan Zhizhi submitted a draft IPO application to US regulators, with a fundraising amount of US$200 million. In May 2018, Canaan Creative tried to
Listed in Hong Kong
, but failed. According to people familiar with the matter at the time, Canaan Creative’s proposed fundraising scale was US$1 billion.
secondary title
AB share model
(Odaily Note: "Emerging growth companies" companies require that the total annual revenue is less than 1.07 billion US dollars, and the report of relevant information can be reduced as required.)
The underwriters of this IPO include: Credit Suisse, Citigroup, China Renaissance, China Merchants Bank, Huatai Securities, Tiger Securities, and Galaxy Digital.
Canaan’s IPO in the U.S. will adopt a dual shareholding structure of Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting rights and conversion rights. Each Class A ordinary share is entitled to one vote, while Class B ordinary shares are entitled to 15 votes. Class B ordinary shares can be converted into Class A ordinary shares at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares. In the absence of over-allocation, Chairman and CEO Zhang Nangeng owns all Class B ordinary shares. However, the specific proportion of Class B ordinary shares to the total share capital and voting rights was not disclosed in the prospectus.
In addition, the prospectus disclosed that Canaan Technology is the main body of the company listed in the United States this time. The prospectus shows that "Canaan Technology" is an exempted limited company incorporated in the Cayman Islands, and the company's affairs are governed by the Memorandum of Association and Articles of Association, as well as the amended Cayman Islands Company Law and the general laws of the Cayman Islands.
secondary title
income decline
According to the prospectus, Canaan’s total revenue increased from RMB 1.3081 billion in 2017 to RMB 2.7053 billion (US$394.1 million) in 2018, an increase of 106.8%. During the same period, its net profit fell 67.4 percent, from 375.8 million yuan to 122.4 million yuan ($17.8 million).
In the six months ended June 30, 2018, Canaan Zhizhi's total revenue was 1.9471 billion yuan; but in the six months ended June 30, 2019, Canaan Zhizhi's total income was only It was 288.8 million yuan ($42.1 million), a drop of 85.2%.
In the six months ended June 30, 2018, Jianan Zhizhi's net income was 216.8 million yuan, and the adjusted net income was 226 million yuan; for the six months ended June 30, 2019, its net loss was 330.9 million yuan ($48.2 million), and an adjusted net loss of 109.9 million yuan ($16 million).
In the application, Canaan Zhizhi also explained the reason for the decrease in income: the price of bitcoin will directly affect the market demand and price of bitcoin mining machines. “The fall in the price of Bitcoin in 2018 has also resulted in customers purchasing our Bitcoin mining products on credit being less willing to pay.”
The price of Bitcoin fell sharply in 2018, and remained at a relatively low level as of the end of the first quarter of 2019; and from the second quarter of 2019, the price of Bitcoin has rebounded to a certain extent. "We expect operating results to improve as the price of Bitcoin recovers in the second quarter of 2019."
Among them, Chinese users are the main customers of mining machines. In 2017, 2018 and the six months ended June 30, 2019, revenue from Chinese customers accounted for 91.5%, 76.1% and 87.9% of Canaan's total revenue, respectively. "The vast majority of our revenue comes from sales to customers in China. Any adverse developments in the regulatory environment in China could have a negative impact on our business."
In the prospectus, Jianan Zhizhi also disclosed investment in technology research and development. In 2017, the annual investment in research and development was 25.1 million yuan; in 2018, the annual investment was 9.6 million yuan, a decrease of 60%; in the first half of 2019, the investment was 4.8 million yuan, which was the same as the same period last year.
According to the prospectus, the company’s AI-related products achieved revenue of RMB 500,000 in the first half of this year, and the revenue of AI products in the second half of 2018 was RMB 300,000. Prior to this, this type of product has not generated any revenue. Jianan Zhizhi announced to the outside world in 2016 that the company was developing edge computing chips based on artificial intelligence.
In addition, Canaan Zhizhi also announced the sales and prices of its various batches of mining machines. Among them, the latest mining machine Avalon A10 series released in March this year, as of the end of June this year, the sales volume was 490 units. The price of the mining machine is 7038 yuan, and the cost is 5640 yuan; the rated computing power can reach 31TH/s, and the energy consumption ratio is 56W/T (the minimum power consumption can reach 50W/T).
secondary title
Mining machine companies get together and go public
In 2016, Canaan planned to list on the Shenzhen Stock Exchange through the wholly-owned acquisition of 100% equity of Luyitong (13.900, 0.10, 0.72%), an A-share listed company. Even though the Shenzhen Stock Exchange sent letters to inquire many times, Canaan Zhizhi's listing plan was finally put on hold.
In August 2017, Canaan applied for listing on the NEEQ. After three rounds of inquiries, it still failed to go public as expected. In May 2018, Canaan officially submitted a prospectus application to the Hong Kong Stock Exchange, intending to list on the Hong Kong Main Board in the form of red chips. However, after 6 months, the official website of the Hong Kong Stock Exchange classified Canaan Zhizhi's listing application as "invalid", and the listing plan was stranded again.
There are many reasons that hinder the listing of mining machine companies, but the most fundamental thing is the volatility of the encryption market and the uncertainty of policies.
At present, China's attitude towards cryptocurrency is still conservative, and the main customer base of the three major mining machine manufacturers is Chinese users. Once the policy announces a complete ban on transactional mining, the blow to mining machine companies will be devastating.
In addition, fluctuations in the encryption market will also affect the demand for mining machines. In the bull market of 2017, the price of mining machines was once fired up to 20,000 to 30,000, but in the bear market of 2018, mining machines were frequently sold at a low price.
At present, whether Canaan Yunzhi will be listed successfully is still unknown, and the final IPO time is expected to be from November 20th to November 25th. Once the successful IPO is completed, Canaan will become the first mining machine company in China to be successfully listed.secondary titleHong Kong stock companies favor mining machine manufacturers
In the process of listing mining machine manufacturers, some Hong Kong listed companies have begun to plan ahead.On October 27, Hong Kong stock companiesXiong'an Technology
It was officially announced that from October 27, 2019, the company's wholly-owned subsidiary Hangzhou Xiong'an Weicheng Technology Co., Ltd. and Hangzhou Jianan Yunzhi Information Technology Co., Ltd. entered into a strategic cooperation framework agreement. According to the agreement, both parties agreed that Xiongan Weicheng intends to purchase from Canaan or distribute on behalf of Canaan a total of not more than 150 million US dollars of blockchain equipment before December 31, 2020, and Canaan will provide Xiongan Weicheng with Corresponding preferential prices and technical guidance.This morning, Hong Kong listed companiesMadison Holdings (08057.HK)
It also announced that it will cooperate with Yibang.
