Bitmain’s Financial Figures Exposed ahead of U.S. IPO: Lost $310 Million in Q1, Expects Sales Explosion in H2 2019
Chinese bitcoin mining giant Bitmain has reported losses of $625 million in the first two months of 2019, but the company turned a profit in March with a net profit standing at $315 million and has seen great growth in miner sales since then, according to a report by a local WeMedia (publications launched on social media platform WeChat) focusing on first-hand IPO news on August 2.
The crypto-miner mega-seller was previously reported to be considering an IPO attempt in the U.S. likely occurring in July, while no filings have been seen so far as it’s already August.
Profit $315 million this March
The report claimed it has obtained the Q1 financial figures of Bitmain from reliable sources who also disclosed that Bitmain was aiming to raise an estimated $1 billion – $1.5 billion in the U.S. IPO based on the company’s valuation at the $13 billion – $15 billion range. According to a Bloomberg report in June citing “people with knowledge of the matter”, the company was considering lowering its fundraising target to around $300 million -$400 million in the U.S. offering from the aim of $3 billion via the Hong Kong IPO.
The revealed financial information showed that Bitmain’s total revenue in Q1 of 2019 stood at $1.082 billion, specifically, $253 million in January, $253 million in February and $578 million in March, with the gross profit of $7.91 million, $14.7 million, $25.21 million, respectively.
The company has finally clawed itself out of the red and into the black since entering March. It booked a net profit of $315 million in March, following losses of $345 million in January and $280 million in February, so the company actually lost $310 million in the first three months of 2019. By contrast, the company revenued $2.84 billion and net in $743 million in the first half of 2018.
In regards to its assets and liabilities, the report indicated that Bitmain registered a total of $1 billion in assets, and the debt ratio marked 16% (debt ratio = total debt/total assets, generally, a ratio of 0.4–40% or lower is considered a good debt ratio) with preferred shares excluded.
H2 financial figures to be impressive
While the viewpoint within the company believed that the sales of latest 7nm miners would push its gross profit margin up since this April (the gross margin of April was estimated to be 30%), as the inventory had been sold out, especially those outdated 16nm miners sold at low prices in Q1.
Apart from that, Bitmain is expecting explosive sales growth in Q4, given that bitcoin mining machines are futures products and the company has placed an order of 30,000 7nm wafers from Taiwan Semiconductor Manufacturing Company.
Observing from the financial information of the company in 2017, the main contribution of annual revenue clearly depends more on the performance in the second half. Its H1 revenue, gross profit and after-tax profit were $274 million, $134 million and $83 million, respectively; while its annual revenue, gross profit and after-tax profit in 2017 were $2.518 billion, $1.213 billion and $701 million respectively, according to its prospectus filed to HKEX.
Taking all these into consideration, Bitmain predicts that it will have a strong cash flow in Q3 due to clients’ advance payment for its mining machines, and Q4 will be the time for major shipment as TSMC needs 3-4 months to mass produce its ordered 7nm chips.
Aside from the 7nm miners, AI products are also a major focus of Bitmain this year. The report pointed out that the company had launched three products equipped with cloud chip BM1684, which had revenued nearly 32 million yuan ($4.61 million) in Q1 2019.