The world’s second-largest bitcoin mining hardware manufacturer, Canaan Inc, has filed for a billion dollar IPO and submitted a listing application to the Hong Kong stock exchange.
Bloomberg reports that Canaan aims to start trading in July, and that the proposal is sponsored by Morgan Stanley, Deutsche Bank AG, CMB International Capital Ltd, and Credit Suisse Group AG.
The company filed for an IPO in 2016 in mainland China but had to cancel the plans due to a regulatory deadlock. Canaan also considered listing on the National Equities Exchange and Quotations OTC market known as the New Third Board before scrapping the plans in favor of the Hong Kong ICO.
Founded in 2013, Canaan is based in Hong Kong and reported a revenue of $205 million last year, while net income saw a sixfold increase to over $56 million. A successful listing would make Canaan the first Hong Kong IPO in cryptocurrency.
A February report from Sanford C. Bernstein & Co. indicates that Canaan has around 15 percent of the global bitcoin mining hardware market, including chips and computer equipment, with rival company Bitmain reportedly controlling 70 percent. A third competitor is “Bitfury” based in the US. China introduced tax breaks for microchip manufacturers in March to reduce dependence on foreign semiconductors amid trade tensions with the US, leading to a spike in overseas acquisitions bby Chinese chipmakers.
Canaan has 200 employees in Beijing and Hangzhou – th company sells ASIC mining chips and other equipment under the “Avalon” brand. Co-Chairman Jianping Kong stated in April that much of the company hardware is sold for use in electricity-rich areas in China and inner Mongolia where some of the world’s largest Bitcoin mines can be found.
The company is developing AI chips and considering expanding their operations to mine other currrencies as well, such as Litecoin. Canaan is also looking into new products to add to their arsenal, such as home appliances such as televisions with bitcoin mining capabilities to allow customers to use them for household purposes during the day only for them to mine cryptocurrencies “while you sleep” as well.
Shandong Luyitong Intelligent Electric Plc sought to acquire Canaan in 2016, but the deal was cancelled due to “great uncertainties” regarding China’s regulatory policies regarding cryptocurrencies and securities. In China the ASIC-based blockchain hardware market has increased from $7.8 million in 2013 to $1.1 billion last year. Frost&Sullivan consultants predict that it will reach over $4.4 billion by 2020 based on the current growth trends.
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