Business 26 December 2018

Ed Drake

Crypto miner maker Ebang reports profit drop in latest IPO attempt

Cryptocurrency mining equipment manufacturer Ebang has reported “significant decreases” in both revenues and gross profit over the third quarter of the year, in a refiling of its draft IPO prospectus with the Hong Kong Stock Exchange.

The revised prospectus was filed December 20, containing updated financial disclosures to the end of June. The revised filing follows on from its lapsed initial application to sell securities on the exchange.

The updated figures show a year of two halves, with revenue in the first six months some eight times greater than the same period on the previous year, topping $304 million. Profit for the same period was some 16 times greater than the year before, at $135 million.

However, the filing notes a significant drop in both revenue and gross profit for the third quarter.

According to Ebang, “We experienced significant decreases in revenue and gross profit for the three months ended September 30, 2018 compared to the preceding three months ended June 30, 2018.”

However, Ebang stopped short of revealing fully detailed figures for Q3, which coincides with the most significant collapse in crypto markets. This has previously been flagged as an issue by the exchange in the case of the Bitmain IPO filing, which also failed to adequately detail performance over this challenging period for crypto mining businesses.

The lack of sufficient detail will be a particular concern in light of the difficulties faced by other mining firms, with several large miners going bust or significantly winding down operations in light of the decline in crypto prices and, therefore, the demand for mining equipment.

Due to filing rules, both Bitmain and Ebang were able to submit figures up to the end of Q2 without detail. However, both will be required to submit numbers for Q3 early in 2019 in order to maintain the progress of their listing applications.

For the time being, it remains unclear how much Ebang is looking to raise from its IPO. However, according to sources close to the firm, expectations have now been reduced by “more than half.” Back in May, a report by Reuters suggested the firm had been looking to raise up to $1 billion.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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