Bitmain, the mining giant of cryptocurrencies based in Beijing, has officially submitted a request for listing on the Hong Kong stock exchange (HKEX).
Published on Wednesday, the long-awaited prospectus of IPO (initial public offering) of Bitmain follows various news that the mining giant is mulling a listing of Hong Kong for a collection of public funds of several billion dollars. The process was not without controversy, with large companies that denied their role in a pre-IPO financing phase in a development that questioned the company.
Since the application is still in draft and awaiting further listing hearings from HKEX, it is not clear to what extent the company will be assessed. As shown in the published application, some details are kept, including the number of shares that will be offered and the calendar for the public offering.
However, the prospectus provides information on Bitmain's financial position as well as the structure of the company and its internal mechanisms.
According to the deposit, the company achieved a total of $ 2,517,719,000 in revenue in 2017, a significant increase compared to $ 277,612,000 in revenue generated in 2016. Starting June 30 of this & # 39; year, Bitmain earned $ 2,845,467,000.
Of these revenues, Bitmain earned $ 1,212,750,000 in profits last year and $ 1,030,151,000 for the first half of 2018, compared to $ 151,351,000 in 2016. Prior to taxes, the numbers were $ 137,750. 000 in 2016, $ 897.376 million in 2017 and $ 907.792 million in the first half of 2018.
CoinDesk previously reported that Bitmain's profits have increased significantly year-on-year, from $ 100 million in 2016 to $ 1.1 billion in 2017 and $ 1.1 billion in Q1 2018, based on the documents obtained by CoinDesk.
The statement states that after adjusting costs and expenses, Bitmain's net profits were $ 48.6 million in 2015, $ 113.5 million in 2016, $ 952.5 million in 2017 and $ 952.1 million in Q2 2018.
Bitmain also reported a balance of $ 886.9 million of cryptocurrencies denominated in bitcoin, bitcoin liquidity, ether, litecoin and indents starting June 30, after accounting for a net loss of $ 102.7 million in the last 6 months, over 10 times the net losses of previous years of companies.
This accounted for 28 percent of total assets so far this year, the document said without breaking down a coin allocation per currency. Holdings in cryptocurrency had previously been valued at $ 56.3 million and $ 872.6 million, or 30% of assets, by the end of 2016 and 2017, respectively.
Boom of hardware sales
Bitmain has seen a huge increase in its sales of mining hardware between 2015 and the first half of this year, according to the filing. In 2015, Bitmain generated revenues of approximately $ 107.8 million from its ASICs. For the first half of 2018, Bitmain made about $ 2.6 billion, marking an increase of half a billion compared to $ 2.26 billion in 2017.
The number of hardware products sold has increased in line with their revenue. Bitmain sold 230,000 miners in 2015, 260,000 miners in 2016, 1.62 million miners in 2017 and, starting from the second quarter of 2018, 2.56 million miners. For 2017, 27 percent of the funds received from customers of mining hardware came in the form of cryptocurrency.
The table also shows that Bitmain's mining products have diversified over the years. For example, in 2015, all of its hardware was bitcoin oriented but, by the first half of this year, 73.2% of its miners could be used to extract bitcoins or bitcoin money (this figure it has fallen below 70% for 2017).
However, Bitmain wrote that since it envisaged "strong growth in the market for mining cryptocurrency hardware" around 2018, a large order for new hardware was assigned to its production partners only to be slowed by the market downturn. cryptocurrency, leading to an excess inventory offer in the first half of 2018.
Grab the earth
Bitmain is digging up land in China to build domestic cryptocurrency mining sites. The deposit claims that Bitmain owns two parcels of land in Inner Mongolia with dimensions of 31,045 square meters and 45,345 square meters, a third parcel in Ningxia of 33,335 square meters and a quarter in Sichuan of 9,338 square meters.
In terms of leased areas, Bitmain has rented 15,200 square meters of land in 5 locations and 50 properties for a total of 99,700 square meters, the statement said.
Bitmain is also planning to start mining operations abroad, adding that it has selected sites in the United States of Washington, Tennessee and Texas, as well as in the Canadian province of Quebec, where hydropower is cheap, to extract cryptocurrencies. .
It is said that construction is underway and that American and Canadian agricultural mines will open in Q1 2019.
In addition to real mining sites, Bitmain claimed to maintain additional space for international commercial operations, including offices and warehouses, in Hong Kong, the United States, Canada, Brazil, Georgia, Israel, Kyrgyzstan, Malaysia, the Netherlands, Russia, Singapore and Switzerland.
CoinDesk previously reported that Bitmain had collected three rounds of financing from investors in Asia and the United States, but the company has closely protected the investors and numbers involved in these agreements so far.
In a $ 50 million Series A investment round on August 8, 2017, Bitmain received $ 18.75 million from SCC Venture, $ 12.5 million from Richway Investment, $ 12.5 million from Sinovation, $ 4.25 million from Blue Lighthouse, $ 1.2 million from IDG China and $ 0.80 million from the Beijing Integrated Circuit, a cap table in the prospect's performances.
SCC Venture, the biggest contributor to the Series A, also led the Series B round, with funding of over $ 128.95 million.
The series B round ended $ 292.7 million on June 19th of this year. SC GGFIII ($ 49.98 million), China Taijia ($ 29.99 million), Blue Lighthouse ($ 25.99 million), Coatue ($ 17.49 million), EDBI ($ 13.99 million), Rising Delight Enterprises ($ 7.99 million), FreeS Bit SPV Fund ($ 7.99 million), Richway Investment ($ 4.99 million), Han Guang Capital ($ 3.99 million) and FBH Partners ($ 0.99 million ) became part of SCC Venture, not long before Bitmain closed its post-Serie B series.
Group B post-series, pre-IPO collected $ 422.05 million and ended only last month on 7 August. Crimson contributes contributed ($ 149.09 million), as did Casmain ($ 43.01 million), CICFH Entertainment Opportunity ($ 40.01 million), Lioness Capital ($ 33.01 million), Bluebell Global Holdings ( $ 30 million), Gortane Avatar Investments ($ 30 million), Palace Investments ($ 30 million), Jumbo Sheen Amber LP ($ 30 million), Temasek & # 39; s Pavilion Capital ($ 20 million), Xin BM Investment ($ 20 million), Newegg Technology ($ 15 million) and Shanghai Investment Corporation ($ 12 million).
Company structure and relationships
In addition to accounting statistics, the Bitmain prospectus includes a number of information on the company itself. For example, in the first half of 2018, Bitmain employed 2,594 people. 840 were dedicated to research, 701 to product management, 535 to maintenance and management of mines, 235 to management, 209 to customer service and 74 to sales and marketing.
Emphasizing the companies that worked and provided advice on the IPO offer, the prospectus also listed China International Capital Corporation, Hong Kong Securities Limited (the sole sponsor of the offer) and the commercial and financial law on the financial side of the public offering. Maples and Calder of Hong Kong, KPMG and Frost & Sullivan provide auditing, legal and consulting services.
The acquisitions not disclosed publicly have been revealed. Bitmain owns a 3% share in the Opera Internet browser after investing $ 50 million in its company entity Opera Limited. Global Digital Mercantile Ltd., described as a cryptocurrency financier, received $ 1 million from Bitmain in exchange for a 5 percent stake in the company.
This story is ongoing and will be updated as needed.