An Avalon miner was once hyped up to 20,000-30,000 yuan ($3,129 – $4,693) when bitcoin was climbing the peak. While according to the prospectus of Canaan, the ex-factory price of an Avalon miner is ranging from 3,122 to 4,402 yuan ($488 – $689), and its unit cost is somewhat between 2,354 to 2,600 yuan ($368 – $407), with net profit rate as high as 46.2%.

Canaan Creative, found by Zhang Nangeng (NG Zhang) in 2013, has been one of the world’s largest bitcoin mining machine maker. Canaan has recently submitted listing application outside mainland China in Hong Kong Stock Exchange, planning to raise $1 billion. Prior to that, it has given up listing on domestic stock market (NEEQ) in late March.

Outsiders now could have a glance of its lucrative miner business via its prospectus submitted on May 15th.

The past three years sees its revenue spike from 47.69 million ($7.5Mn) in 2015 to over 1.3 billion yuan (around $204Mn) for year 2017 at the annual growth rate of 423.7%. Canaan’s net profit was 2.24 million ($350K) for year 2015 and increased 125 times in two years to 300 million ($47Mn) in 2017, with net profit rate increasing from 29.1% to 46.2%.

The mania carries on. According to its prospectus, as of March 31, 2018, Canaan has received over 1.1 billion yuan ($172Mn) prepayment, and most of it is from the mining rig orders.

While on the other hand, bitcoin miner makers are comparably lightweight in the eye of chip foundries. They have to pay them a larger amount of advance to ensure the production capacity, which explains its large cash outflow. And the prospectus shows that Canaan is also making deployment on AI like its rival Bitmain.

Antminer or Avalon?

Canaan’s Avalon miners are the second best sellers among mining machines brands all over the world. A total of 294,500 mining machines from Canaan were shipped in 2017. It takes up 20.9% market share and ranks the second place in the bitcoin mining machine market; the champion, Bitmain, delivered 940,100 units of Antminer in the same year, taking the lion share (66.6%).

In Huaqiang North which is dubbed the country’s No.1 electronics street and world’s largest distribution center of cryptocurrency mining machines, almost all the stores there sell Bitmain’s Antminer, but Avalon miner retailers are relatively fewer.

A retailer said that Antminer operates more stably and has good after-sales service. For retailers, it frees them from lots of troubles, as an Antminer purchased within half a year could be replaced by brand new one if any problem occurs to it. Besides, the name of Antminer speaks itself, and most buyers come here for it. The Avalon 741 once was eagerly sought when the bitcoin price was climbing the peak, but soon the demand for it dropped.

Unit cost less than 3,000 yuan

Avalon 841, currently at the price of 6,000 yuan ($940), generates a return of $3.11 per day. Under this circumstance, its payback period would be around 300 days, according to data from a review.

A retailer said one of his fellows stocked up 8,000 Avalon 741 when it was hyped up to 30,000 yuan. And now, he has to bear the loss of 10,000 yuan at least per unit.

In effect, the ex-factory price of an Avalon miner ranges from 3,122 yuan ($488) to 4,402 yuan ($689), and its unit cost is somewhat between 2,354 to 2,600 yuan ($368 – $407).