Bitmain Crypto Mining Giant Files for IPO

Bitmain, one of biggest cryptocurrency mining hardware designing companies in the world, has decided to go public. It filed an IPO application with the Hong Kong Stock Exchange (HKEX).

27 September 2018 – Bitmain, one of the largest cryptocurrency companies in the world, has officially applied to go public on the Hong Kong Stock Exchange (HKEX).

Bitmain Files for Initial Public Offering

Bitmain’s long-awaited Initial Public Offering (IPO) application has been published on Wednesday, 26 September. The application follows a number of online reports stating that the mining giant has been considering a listing in Hong Kong for a multi-billion dollar public fundraising.

The process saw a lot of controversy from market participants, with some of the entities denying their involvement in a pre-IPO funding phase with Bitmain.

As a matter of fact, the application from Bitmain is still in draft, as it is pending listing hearings from the HKEX. Therefore, it is still unclear how much the firm will be valued at. As it can be observed in the published application, some details remain redacted. These details include the number of shares that will be offered and the schedule for the upcoming public offering.
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Nevertheless, the prospectus for the IPO provides insights concerning Bitmain’s financial standing and the company’s inner operations and structure. According to the filing, the firm made a total of $2,517,719,000 in revenue back in 2017, which appeared as a major increase from the $277,612,000 in revenue it saw in 2016. As of June 30 this year, Bitmain has generated $2,845,467,000 in revenue.

The prospectus further stated that after adjusting expenses and costs, Bitmain’s net profits stood at $48.6 million in 2015, $113.5 million in 2016, $952.5 million in 2017 and $952.1 million in Q2 2018. The mining giant also reported an $886.9 million balance of cryptocurrencies denominated in Bitcoin, Bitcoin cash, Ether, Litecoin and Dash as of June 30.

Market Hardware Sales Slide

Bitmain experienced a huge spike in its mining hardware sales in the period between 2015 and the first half of the current year, says the filing. Back in 2015, Bitmain received around $107.8 million in revenue from its ASICs. For the first half of 2018, Bitmain managed to make around $2.6 billion, thus marking a half-billion surge over 2017's $2.26 billion.

The number of hardware products that were sold rose in line with Bitmain’s revenue. The company sold 230,000 miners in 2015, 260,000 miners in 2016, 1.62 million miners in 2017 and, as of Q2 2018, 2.56 million miners. For the previous year, 27 percent of the funds it generated from mining hardware customers came in cryptocurrency form. The IPO prospectus also indicated how Bitmain’s products have diversified over the years.

The company also stressed that because it expected a "strong market growth for cryptocurrency mining hardware" moving into 2018, it has placed a large order for new hardware to its partners only to find out that hardware sales have slowed down.

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