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Top Secrets of Bitmain that You May Not Know: Sales Earn Twice as much as the R&D Personnel (I)

Bitmain Technologies, the Chinese cryptocurrency mining giant has finally released its public financial statements on September 26.

In the financial statement, the world’s dominant bitcoin mining hardware maker shows its ambition to AI business and is trying to change its simplex profit model.

Bitmain also claimed that the IPO raising funds would be used in enhancing their research and development capabilities and expand the production output of ASIC chips, AI ASIC chips, blockchain and AI applications, as well as their global expansion and investing business strategies.

The statement also discloses 10 inconspicuous top secrets of Bitmain, today we will discuss 3 of them and the rest will be demonstrated in the following articles.

1.The average salary of sales is twice as much as the R&D personnel in Bitmain.

The statement disclosed that as of June 30, 2018, Bitmain has 2,594 full-time employees. The R&D personnel account for 32.38%, which is the largest department of Bitmain.

According to the financial information, the average salary of R&D personnel is US$48k per year (28k RMB/month) while the sales gets US$104k per year (58k RMB/month) which doubles the R&D average salary.

微信1微信22.Micree Zhan owns 36% of Bitmains stake, beats Jihan Wu in Shareholding.

Micree Zhan owns 36% of the company while Jihan Wu owns 20.25% of Bitmain’s stake. Bitmain achieved a $14.5 billion market cap after it completed its Series B+ round funding, according to the stake worth percentage they owned, Zhan’s net worth is much higher than Wu at around $5.2 billion while Wu’s sitting at $2.9 billion.

In addition, Bitmain’s employees hold 18.47% of the company through the shareholding platform Oceanic Summit Holdings Limited. This may be risky for its IPO investors as Bitmain’s compensation is not so competitive and staffs may sell their shareholdings for cash out.

3.Bitmain gets most of its revenue from mining equipment sales and the percentage is increasing year by year.

According to the financial data, Bitmain’s revenue highly relies on mining equipment sales. For the years ended December 31, 2015, 2016, 2017 and the first half year of 2018, the revenue of mining hardware sales are $107.88 million, $214.7 million, $2,263.24 million and $2,683.85 million. Which account for 78.6%, 77.3%, 89.9% and 94.3% of its total revenue.

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Notably, the revenue of BTC/BCH mining devices sales drops sharply to 73.2% as the rise of emerging new coins including the Ethereum, Litecoin and Dash may be the main reason for impact for the sales of bitcoin miners.

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