Text | Edited by Zhou Wenyi | Bi Tongtong Source | PANews
Text | Edited by Zhou Wenyi | Bi Tongtong Source | PANews
At 22:30 on November 21, Beijing time, Canaan Technology (CAN) was listed on NASDAQ in the United States. After three setbacks in listing, Canaan finally realized its dream in the United States. Canaan, which once invented the world's first ASIC mining machine, has now become the first mining machine manufacturer and crowned China's first blockchain stock.
That night, Canaan Technology started trading at an issue price of US$9 per share, compared with the previous subscription price range of US$9 to US$11.
"Thank you to all colleagues, investors and partners. We have experienced failure and success together before, and we will be together in the future, striving for a better vision." Zhang Nangeng said excitedly on Nasdaq.
secondary title
01 From 1% possibility to 1 consensus
In 2010, Zhang Nangeng was still a Ph.D. student majoring in computer science at Beihang University. However, becoming acquainted with Bitcoin has changed the trajectory of his life. The first time he came into contact with Bitcoin, he felt that this thing had a 1% possibility of changing the world. As a result, he began to study Bitcoin with great concentration, and with the ID "ngzhang" ("Pumpkin Zhang"), he showed his own FPGA mining machine - Icarus and Lancelot - to global bitcoiners on the Bitcoin Forum. This year coincided with Bitcoin mining entering the era of area programmable gate array (FPGA) mining. And Zhang Nangeng's mining machine Icarus has become the first product in the FPGA stage of Bitcoin mining.
"Avalon" was popular in the market, making Zhang Nangeng famous and rich. In April of that year, Zhang Nangeng and Li Jiaxuan, who had worked as an IC engineer at Vimicro, jointly established "Beijing Jianan Yunzhi Information Technology Co., Ltd." Soon after, another shareholder Liu Xiangfu also joined. It is said that both Zhang Nangeng and Li Jiaxuan are anime fans. The English name of Jianan "Canaan" comes from the Japanese animation "Canaan Canaan", and the Avalon mining machine is the name of the weapon in the animation "Fate".
image description
▲Zhang Nangeng, Chairman and CEO of Canaan
Jianan Zhizhi, who was gaining momentum, never expected that there would be a wave of ups and downs and another wave of ups and downs. In December 2013, the central bank and other five ministries and commissions issued the "Notice on Preventing Bitcoin Risks". Overnight, the industry's cold winter suddenly hit. Inside the company, Zhang Nangeng gave up the mining machine assembly market and focused on chips business. This decision-making error is tantamount to making the country that Avalon laid down. What is even more difficult is that rising stars including Bitmain have entered the market one after another, and mining machine manufacturers have entered an era of competition among the pack. In 2015, with the Antminer S7 mining machine, Bitmain rapidly eroded 80% of the mining machine market share, leaving Canaan far behind.
After a few years of internal and external difficulties, Zhang Nangeng began to realize that only capital can allow Canaan Yunzhi to survive the storm. According to Beep News, in 2013, Kong Jianping, an individual investor in Hangzhou, and Sun Qifeng, the founder of Yibit, invested 7.6 million and 1.4 million respectively in Canaan Zhizhi. This is a life-saving money for Pumpkin Zhang's team.
After that, Zhang Nangeng failed to seek external financing in many ways. Until 2015, the Hangzhou Branch of Zhejiang Tsinghua Yangtze River Delta Research Institute and Tunlan Investment, also in Hangzhou, successively invested in Canaan Zhizhi. They met many noble people from Hangzhou. Canaan Yunzhi then moved its headquarters to Hangzhou. After entering 2015, Canaan Creative has entered a period of rapid development. Runs fast. According to the listing prospectus released not long ago, Jianan Zhizhi’s revenue in 2015, 2016 and 2017 was 48 million yuan, 316 million yuan and 1.308 billion yuan respectively.
However, Canaan’s performance this year is not satisfactory. According to its prospectus, the net income in the first half of this year was US$42.1 million, with a loss of US$45.8 million, while the net income in the first half of 2018 was US$1.947 billion and the profit was 178.9 million. Dollar.
Canaan's listing, which shareholders benefit the most? According to the prospectus, the company's management holds a total of 50.8% of the shares, and Li Jiaxuan, Zhang Nangeng, Kong Jianping, and Sun Qifeng hold 16.2%, 16.0%, 12.1%, and 5.8% respectively.
secondary title
02 One step and three discounts, the road to listing after repeated failures
Go away in high spirits, and return in defeat. It can probably be used to make fun of Canaan's experience of "repeated failures and repeated battles" in the first three listings.
Admittedly, compared to other companies, Canaan’s road to the road is indeed not smooth. This tug-of-war for listing lasted from June 2016 to November this year. After 42 months, it finally turned around and succeeded. Launched in the United States by Ringing the Bell.
In June 2016, this was Canaan’s first attempt to land on the A-share market—the “backdoor” A-share listed company Luyitong. At that time, Luyitong announced that it planned to acquire all the shares held by Canaan Zhizhi's existing 14 shareholders at a price of 3.06 billion yuan. However, due to the regulatory cold current, the listing plan fell through.
It was not until a year later, in August, that Canaan launched its listing plan again, seeking to be listed on the New Third Board, but had to give up after receiving three rounds of feedback and inquiries from national equity transfer companies and securities firms.
In April 2018, Jiang Yang, vice chairman of the China Securities Regulatory Commission, investigated Canaan Zhizhi and expressed his hope that Canaan Zhizhi would be listed in China. In May 2018, Canaan turned to plan to list on the main board of Hong Kong in the form of red chips. But 6 months later, the official website of the Hong Kong Stock Exchange showed the information that "Jianan Zhizhi's IPO application has expired". At that time, there was a point of view that Jianan Zhizhi could not pass the approval or because Li Xiaojia, president of the Hong Kong Stock Exchange, said, "All listing applications must comply with the general principle of 'listing adaptability', that is to say, the listed business of (enterprises) must be Those that are suitable for listing include the sustainability of operations and compliance with regulatory requirements.”
But this time, it was the last stop on Canaan's long journey to the market, and the stone in Zhang Nangeng's heart finally fell to the ground.
In addition, according to the prospectus, Canaan is applicable to the US Federal Securities Act and can be identified as an "emerging growth company" and is eligible to reduce the reporting requirements of listed companies. The bill aims to simplify the listing process and relax information disclosure requirements for emerging growth companies with a total annual revenue of less than US$1 billion. flexibility. In addition, the industry agrees that the overall market is recovering and the attitude towards blockchain technology at home and abroad is becoming more and more enlightened. This favorable environment is no different than a powerful boost to reduce industry risks and launch listings.
secondary title
03 An adventure dream powered by an AI chip
PANews mentioned in its previous follow-up report that Canaan has submitted a listing application to the US Securities and Exchange Commission (SEC) and plans to list on the NASDAQ market in the US through an IPO. It is not difficult to find out just through the prospectus that the AI chip business has really become Canaan's heart.
It is reported that Canaan’s AI-related products achieved a 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.
However, in the prospectus, instead of a "bitcoin mining company", Canaan clearly defined itself as a "semiconductor company" and a "leading supercomputing solution provider" focusing on the R&D and production of AI chips. In order to reduce the risk of Bitcoin, the company has added AI chip business. The founder has publicly stated that the revenue of AI chips in 2019 is expected to be tens of millions of yuan, and plans to achieve a 1:1 ratio of mining machine and AI business revenue within 3 years.
In addition, regarding the funds raised by this IPO, Jianan Zhizhi said that it will be used for the research and development of ASICs related to AI algorithms and applications, the research and development of ASICs related to blockchain algorithms and applications, AI and block The global expansion of the chain business, the optimization of the supply chain, and the repayment of liabilities arising from the company's restructuring, etc.
Zhang Nangeng admitted that chip innovation may be risky, but in the end, he can develop good products that are far better than competitors. In 2016, Zhang Nangeng and his team began to design the first generation of AI chips, which is equivalent to applying the computing technology accumulated in the blockchain field to the research and development of AI chips. He emphasized that "the chip industry has no shortcuts to accumulate teams and technologies. It is iterated from generation to generation and piled up wafer by wafer."
In an interview with "Chinese Entrepreneur", Zhang Nangeng once analyzed that the chip is the foundation of the computing platform, and the software and algorithms at the upper level are sustainable services, and the higher level is the customer, and the customer may have more needs. For example, platforms that need to provide cloud services, equipment for customer flow analysis, data statistics platforms, etc., these are actually very Internet-oriented. After such a complete set, it is no longer necessary to make money from selling hardware, but to provide Internet-based services for customers. services.
Zhang Nangeng believes that AI chips will bring great opportunities to Canaan. On the one hand, from a technical point of view, AI chips will greatly impact the traditional computer architecture; secondly, the breakthrough of 5G technology will provide a good technical foundation for the development of the end-side AI market.
In fact, although the output of Canaan’s chip sector contributed little to the company’s overall performance, Canaan’s investment in chips has not been wasted. From the research and development of the first generation of chips in 2013 to the present; from 110nm to 55nm, 40nm, 28nm, 16nm, 7nm, and 28nm AI chips. Especially in 2018, Canaan successfully designed and mass-produced the world's first 7nm chip, mass-produced and released the world's first commercial edge intelligent computing chip based on RISC-V architecture and self-developed neural network accelerator. This chip has a wide range of application scenarios in the fields of smart home, smart building, new retail and smart manufacturing, and is one of the pioneers of domestic AIoT chips.
Interestingly, on July 20 this year, the 60th anniversary of the first moon landing, Zhang Nangeng published an internal letter to encourage employees that the future of the digital world will be a silicon-based civilization, and Canaan has become one of the leaders in this expedition .
