Cryptocurrency Mining Giant Bitmain Reportedly Eyeing $3B Hong Kong IPO

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Beijing-based Bitmain Technologies Ltd. is seeking to raise up to $3 billion in a Hong Kong initial public offering, Bloomberg reports citing people familiar with the matter.

The company mines bitcoin and is also the largest maker of cryptocurrency Application-Specific Integrated Circuit (ASIC) chips in the world.

It is currently valued at $12 billion in private markets after raising $450 million from investors during its last funding round two months ago. Bitmain has made profits of $2.3 billion in the last three years, according to an article on Coindesk website.

It earned a total of $1.1 billion in profits last year, as cryptocurrency markets experienced a surge in prices.

Bitmain hopes to report a total of $2 billion in revenues by the end of fiscal 2018. Bernstein Research analysts have estimated that the company might be making as much as $3 billion per year in profits.

According to the Bloomberg report, Bitmain is currently in the process of filing a listing application on the Hong Kong Stock Exchange. Industry analysts see the IPO as a huge test for cryptocurrency companies as they seek to court investors.

Details of the offering also come at a time when prices of bitcoin and other digital currencies continue to show uncertainty signs.  

If approved, ABC Capital Management will underwrite the offering and shares will begin trading in September, or early next year. Proceeds of the offering are expected to give the company the extra public profile and funding it requires to take on its competitors.

In May this year, Bitmain co-founder Jihan Wu quoted said that the challenge the company faces is advancing its technology past what it has already achieved. Bitmain sells its cryptocurrency mining equipment to end customers located in more than 100 countries worldwide.

It commands over 80% of the crypto mining equipment market. However, its massive control has triggered criticism from some cryptocurrency purists that are against the idea of power concentration within the industry.

Canaan Creative and Ebang International Holdings are the other two virtual-currency equipment producers seeking to list on the Hong Kong Stock Exchange.

About Bitmain Technologies Ltd

Bitmain was founded in 2013 by Micree Zhan and Jihan Wu and also has presence in the US, Switzerland, Israel, Hong Kong, Fuzhou, Shenzhen, Netherlands, Shanghai, and Chengdu.

Before founding the company, Wu was a private equity fund manager while Zhan ran a television streaming service known as DivaIP. Together, they own a stake of about 60% of the company.

Majority of the engineers that work for the company are mainly from the US and China. Aside from producing high performance ASIC chips, the firm offers custom blockchain application solutions and cloud hashing services.

Bitmain is also the parent company of other highly ranked brands, such as Hashnest, Antminer, and Antpool. –Bitmain