Crypto miner maker Ebang Communication joins IPO frenzy

Getting your Trinity Audio player ready...

Another China-based cryptocurrency mining hardware marker has reportedly submitted a prospectus for an initial public offering (IPO). This is quite an innovative step for such a company since there have been a lot of restrictions in China with regards to cryptocurrency mining.

According to regional industry publication 8btc, Ebang Communication filed the application with the Hong Kong Stock Exchange on Monday. Ebang is considered to be the third largest producer of application-specific integrated circuits (ASIC) chips for cryptocurrency mining.

Documents obtained by 8btc showed Ebang has a considerable turnover but wants to expand further and is looking at this Hong Kong IPO to raise capital. Reuters previously reported that Ebang had been eyeing to raise $1 billion via an IPO, but these plans were not confirmed until the prospectus surfaced in the media.

The company claims to have an 11% market share of the Bitcoin ASIC market, which it hopes to increase with the planned rollout of its 7nm chips. Japan-based GMO Internet has already unveiled 7nm chips, which are more efficient than the current market-leading 10nm chips.

In its prospectus, Ebang claims to have experienced 30-fold revenue growth over the past three years. In 2017, Ebang brought in RMB925.4 million (US$142 million), up from RMB29.2 million (US$4.5 million) in 2015. The firm’s profits came in at RMB385 million (US$59 million) in 2017, up from the RMB11.1 million (US$1.7 million) posted in the prior-year period.

Ebang is the second major crypto mining firm to file to go public in Hong Kong. Canaan Creative, considered to be the second-largest crypt mining manufacturer, filed for an IPO before the HKEX in May. The firm, which claims to have a market share as high as 25 percent, also hopes to raise $1 billion or more during its public offering.

Canaan Creative and Ebang’s IPOs, however, could be eclipsed by that of a much larger competitor—Bitmain. The China-based firm, believed to have control of some 80% of the ASIC manufacturing market, has reportedly been laying the groundwork for its own IPO.

Some analysts have suggested $8.8 billion to be a price more reflective of the firm’s value, based on multiples from loosely equivalent businesses. As one of the largest operators in the cryptocurrency mining market, which currently has a distinct lack of publicly listed companies, Bitmain shares are also expected to trade at a significant premium over value, creating the potential for a strong debut for any initial equity.