Bitcoin Miner Maker Ebang Wins 369 Million Yuan China Telecom Contracts
Ebang International, the newly Nasdaq listed bitcoin miner manufacturer, has recently won the bid for China Telecom’s government procurement projects involving 5G edge computing.
The company was awarded 369 million yuan (roughly $53 million) worth contracts by the country’s third largest mobile telecommunication provider. Other heavyweight bid winners include telecoms giants Huawei and ZTE.
It still remains unknown the portion Ebang was granted in the centralized procurement projects. According to China Telecom, Ebang ranked fifth in the bid evaluation, ahead of the country’s telecom giant ZTE.
This June, Ebang has been listed on the Nasdaq market under the ticker EBON. The company priced its initial public offering of 19,264,337 Class A ordinary shares at $5.23/share for a total offering size of ~$100.75M.
Ebang International was started in 2010 to sell communications network access devices and related equipment. In 2014, it entered the crypto scene and began selling its own brand of mining equipment Ebit miners in 2016.
The company’s business thus mainly falls into two parts. The first one is the telecommunication services involved in data communication, fiber optics and 4G/5G wireless communication. Primary customers include China Mobile, China Telecom and China Unicom.
Its other main business is blockchain business of manufacturing and selling ASICs for bitcoin mining, which has made Ebang one of the world’s largest crypto mining equipment manufacturers after Bitmain, MicroBT and Canaan.
The past three years have seen the company’s revenue from the telecom segment keep continuous decline. In 2019, the product sales from telecommunications make up less than 3% of Ebang’s total revenue, as was disclosed in its SEC filing.
Its latest order from China Telecom – 368 million yuan, or $53 million – would be larger than the company’s telecom-related revenues of the last five years combined. Following the news, the company’s stock price has soared by nearly 45% in the day. As of press time, it has climbed over 5% from its IPO price of $5.23, currently standing at $5.5.
According to financials disclosed in its SEC filing, the company’s revenue, largely depending on mining equipment sales, has been falling for the past two years for the great volatility of the crypto market. The available statistics for this year remain flat as a result of the coronavirus impact and bitcoin halving.
Regarding this, Ebang says it aims to double its revenue by expanding its business, including setting up a crypto trading platform and its own mining farms. Apparently, the company is picking up its telecom business and also actively growing its business in this segment.