China’s second-largest Bitcoin mining hardware manufacture Canaan Creative is planning for an initial public offering (IPO) and is seeking to list itself in Hong Kong-based stock exchange rather than the lucrative US market, according to a report by the South China Morning Post.
Earlier, the hardware manufacturer revealed that it was considering both Hong Kong and the US to list its stocks, but the recent report showed that the firm had already eliminated the second option from its list. However, Canaan did not make any official announcement yet.
Moreover, the anonymous sources told the Chinese daily that the firm is aiming to raise as much as $1 billion with the IPO.
Profits on rise
Canaan Creative was established in 2013 amid the hype of Bitcoin mining. It designs and manufactures high-performance ASIC-based miners for Bitcoin mining and is well know for the Avalon series of bitcoin mining machines. Earlier in January, the firm released its income report where it showed a profit of $64 million (410 million yuan) for 2017 alone – an appreciation of 600 percent from the previous year – however, the report was unaudited.
The Hangzhou-based firm had earlier tried to list itself in multiple exchanges in China. However, all its attempts failed. In 2016, it tried to gain a listing in China’s yuan-denominated A-share market by buying Shandong-based electric equipment maker Luyitong. However, the plan went awry as the regulators raised questions on the valuation of the deal.
That followed Canaan’s attempt for listing in China’s “New Third Board” market, which primarily caters to startups with its less stringent listing requirements. That also failed, but the company did not reveal the reasons publically.
Despite the profits of the firm, experts are concerned about the future of the firm as most of its clients are based in China. Earlier this year, many reports showed that the Chinese government is trying to systematically curb the booming crypto mining industry in the country citing no addition from them to its real economy. If the government, like last year, take any stance step, the business of Canaan will fall drastically.