(Yicai Global) May 16 -- Canaan Inc., the world’s second-biggest bitcoin mining rig maker, has applied to go public in Hong Kong and may become the first listed company of its kind.
The Hong Kong Stock Exchange published the application proof yesterday but did not disclose the listing timetable or price, though Bloomberg cited unidentified sources as saying it could tip USD1 billion. Morgan Stanley, Deutsche Bank, Credit Suisse and CMB International are sponsoring the offering.
The Cayman Islands-registered company, best known for its AvalonMiner brand, has enjoyed booming success in recent years thanks to the rising value of bitcoin, with revenue topping CNY1.3 billion (USD205 million) last year, up from CNY316 million the year before and CNY48 million (USD7.5 million) in 2015.
But as bitcoin is still in its infancy and most Canaan products are geared toward it, a rocky future for the cryptocurrency could spell trouble for the firm, it warned. The company raised CNY300 million in its A-round funding last year to branch out into developing application-specific integrated circuits for use in artificial intelligence and hopes to star mass producing the chips this year.
The domestic chip market has been a top focus amid ongoing trade frictions with the United States, mostly due to Department of Commerce’s seven-year ban preventing telecoms equipment maker ZTE Corp. from buying American technology and parts, though US President Donald Trump’s about-face on the topic may have thrown it a lifeline after it announced it had closed for business.
“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” Trump wrote on Twitter on May 13. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”
Chinese Vice Premier Liu He lands in Washington today to discuss economic and trade relations with Treasury Secretary Steven Mnuchin, and push for the US to lift the ban.
The application isn’t Canaan’s first shot at an initial public offering. It tried to backdoor list on the mainland for CNY3 billion in June 2016 via Shandong Luyitong Intelligent Electric Plc, but withdrew in September that year due to tightened regulation over China’s stock markets. It also sought to list on the Nasdaq-style National Equities Exchange and Quotations, or the New Third Board, in August last year, but pulled out to pursue an offshore listing in March.
Editor: James Boynton