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At Last! Bitmain Officially Filed IPO Application

Bitmain, world’s dominant cryptocurrency mining giant based in China, has finally filed its long-awaited IPO application to Hong Kong Stock Exchange (HKEX).

The release of its 438-page initial public offering (IPO) prospectus on Wednesday September 26, though still in draft and waiting for further listing hearings from the HKEX, has lifted the veil of the 5-year-old company’s financial standing as well as business mode and risks it faces.

Rumors of Bitmain’s financial standing has abounded since the company claimed to seek to go public this August.

Some of those unfounded claims were eventually dispelled upon the publishing of the prospectus, like Coingeek’s founder Calvin Ayre tweeted last week that Bitmain would kill the IPO. Apart from these discredits, big investors like Japanese telecom giant Softbank, Chinese internet conglomerate Tencent and Singaporean financial powerhouse Temasek also denied their involvement in its pre-IPO funding. While the prospectus shows that Temasek has actually invested in the mining behemoth through two companies beneficially owned by it.

Revenue and profit

As per the filing, the company made a total of $2,517,719,000 in revenue in 2017, growing by nearly 250% from the $277,612,000 of 2016, and approximately $137mln in 2015, surging substantially year-on-year. As of June 30 this year, Bitmain has made $2,845,467,000 in revenue, significantly exceeded the full-year revenue in 2017.

Of that revenue, Bitmain grossed profits of $1,030,151,000 for the first half of 2018 and $1,212,750,000 in 2017, up from $151,351,000 of 2016. Before taxation, the number ($907,792,000) of the first half of 2018 has surpassed that ($897,376,000) of the course in 2017.

revenue and profit

As the prospectus states, mining hardware sales is a major contributor to its revenue. For the first half of 2018, Bitmain made about $2.6 billion, a half-billion increase over 2017’s $2.26 billion. The remarkable numbers enabled Bitmain to be the largest global ASIC-based cryptocurrency mining hardware company in 2017 with a market share of 74.5%, and also China’s second largest and one of world’s top 10 fabless IC design companies.

AI deployment

Apart from the expertise in ASIC chip design, Bitmain has extended its push in the field of artificial intelligence (AI) and launched the second-generation AI chip BM1682 in the first quarter of 2018, which could provide tensor accelerated processors for deep learning, suitable for artificial neural network training or inference.

Mining farm and mining pool

The company manages mining farms which offer custodian services for mining hardware, and operates mining pools where miners could contribute their computing power and split mining rewards.

As of June 30 2018, it had opened 11 mining farms in Sichuan, Xinjiang and Inner Mongolia in China, with an aggregate capacity to store 200,000 sets of mining hardware.

Bitmain is also planning to launch overseas mining operations, adding it has selected sites in the U.S. states of Washington, Tennessee and Texas, as well as in the Canadian province of Quebec where hydro-power energy is cheap, to mine cryptocurrencies. Mining farms in American and Canadian are expected to open in Q1 2019.

The two mining pools owned by Bitmain – and Antpool, are currently the world’s largest and second largest bitcoin mining pools in terms of hashrate, together contributing approximately 37.1% of the total hashrate of the bitcoin network.


The 24H hashrate distribution as of September 27 2018

Mining hardware sale

During the period of 2015-2017, the mining hardware sets sold by Bitmain were 227k, 262k, 1.62mln respectively, with averaged selling price up from $463 per unit in 2015 to $1,333 in 2017.

miner sales

Clients and employees

Its client number has spiked from 6,000 in 2015 to 46,000 in 2017, and over 80,000 in the first half of 2018, most of which are from China, U.S., Asia (excluding China) and Europe. In 2015-2017, earnings from overseas sales market contributed respectively 65.3%, 51% and 51.8% of the total in that year.

miner sales 2

It is notable that these remarkable sales numbers were achieved by 74 sales and marketing staff, accounting for only 2.85% of the total 2,594 employees in the company.

Company shares

Bitmain adopts a WVR structure, under which the company’s share capital comprises Class A Shares and Class B Shares. Each Class A Share entitles the holder to exercise one vote, and each Class B Share entitles the holder to exercise ten votes. The company’s actual controllers, co-founder Micree/Ketuan Zhan (39-years-old), also its technology backbone, holds 3,988,768,187 Class B shares and co-founder Jinhan Wu (32-years-old) owns 2,243,331,244 Class B Shares. More specific details about their shareholding ratio remain redacted.

Cryptocurrency asset

The company reported an $886.9 million balance of cryptocurrencies denominated in bitcoin, bitcoin cash, ether, litecoin and dash as of June 30, mainly from customer payment for mining hardware sales and proprietary mining activities. The last 6 months saw an impairment loss of $102.7 million in its crypto assets out of the fluctuation in the crypto prices, more than 10 times the net losses on previous years of holdings.

The crypto assets accounted for 28% of its total assets so far this year, the document stated without breaking down a coin-by-coin allocation. It is stated in the prospectus that the company’s business and financial condition correlated closely with the market price of cryptocurrencies. But it continued that they account for cryptocurrency assets at cost; they only recognize impairment from crypto assets, and do not recognize any increase in value from the appreciation of cryptocurrency assets


Bitmain had raised around 785 million in its three funding rounds since its inception, most happened in 2017 and 2018.


The company did not disclose a target valuation or how much it wants to raise from the IPO. The timeline for the public offer also remains unknown. We’ll keep you updated with more upcoming details.

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