Crypto mining losses wipe 90% off Chinese construction firm’s value

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A listed construction firm in China has been exposed as operating a secret crypto mining business, after it was reportedly sold at a heavy discount after substantial losses.

According to an 8BTC report, construction firm Huatie HengAn was sold for RMB12 million, approximately $2 million. Twelve months earlier, the construction-cum-crypto miner was valued at RMB170 million, roughly $25 million.

The company had claimed that it had been engaged in “cloud computing,” despite figures showing the purchase of 36,500 units described as “servers” from crypto mining firms Ebang and Avalon-maker Canaan Creative.

Both notable names in crypto mining in their own right, neither firm sells servers, confirming suspicions Huatie HengAn was indeed running a discreet crypto mining operation.

The firm reported a net loss of RMB158 million to February, with no sign of a reversal on the horizon.

There have even been reports that large mining farms in Sichuan are still struggling to fill capacity ahead of the rainy-season, at a time when cheaper hydroelectric energy should theoretically make mining more viable.

While the firm nevertheless operates under the banner of cloud computing, its fortunes have been widely interpreted as the first example of a listed crypto mining firm in China.

Unsurprisingly, the company has struggled in recent months, in line with similar developments right across the crypto mining sector.

Firms that once planned expansion have been forced to cut back on staff, sell off their hardware and close facilities, as ongoing bearish pressures weigh on the crypto markets.

Three of the market leaders, Canaan, Ebang and Bitmain have also been subject to failed IPO attempts in recent months, as a direct result of the bear market and the lack of appetite from investors at a time of deep uncertainty for the sector.

The Chinese government is also reported to be considering outlawing crypto mining within its jurisdiction, in what could be a final and fatal blow to the sector.

Fueled by the collapse of Bitcoin Core (BTC), the cut-price valuation of Huatie HengAn is reflective of the wider trend for struggling mining firms in recent times, both in China and beyond.