Crypto giant Bitmain reveals all in prospectus for Hong Kong IPO

  Bitcoin mining giant Bitmain published information about its books for the first time today, in a regulatory filing which also confirmed its intention to pursue a public listing on the Hong Kong stock exchange.

The statements revealed some heady growth for the world's largest mining firm as profits soared to $742.7m (£563.3m) in the first half of this year, a ninefold rise from the same period in 2017.

Revenue rose to more than $2.5bn last year, an almost tenfold jump above the $278m it posted for 2016. In the first six months of this year, that number has already surpassed $2.8bn.

Payments made by users for services and products in cryptocurrencies such as bitcoin do not appear in the revenue numbers but are listed as “investing cash flow”, for which Bitmain said it received $887m in the first six months of the year.

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Though the filing remains in draft stage and so does not hold a future valuation for the business, the news provides an end to months of speculation on whether Bitmain would be heading to market any time soon. Sources close to the deal, however, told Bloomberg the listing could raise as much as $3bn.

Sales of its Antminer device – a box filled with powerful chips which allows users to mine their own cryptocurrencies – accounted for 94 per cent of the firm's revenue so far this year. This percentage has steadily risen from 90 per cent in 2017 and 77 per cent in 2016, providing some insight into Bitmain's growth as cryptocurrencies such as bitcoin remain volatile after the price bubble popped earlier this year.

In fact, the filing reveals Bitmain was left with a $1bn surplus pile of inventory this year, after it overestimated the market demand for its devices based on the upward trend of crypto prices in the last quarter of 2017.

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Two other mining firms, Canaan and Ebang International Holdings, are also pursuing public offerings in Hong Kong.

Bitmain co-founder Jihan Wu said earlier this year that he expects non-cryptocurrency related sectors to play a large role in the firm’s future. For example, the Asic chips which fill Antminer devices could eventually be responsible for as much as 40 per cent of Bitmain’s revenue within the next five years.

Bitmain currently has more than 80,000 customers, with just shy of half of its sales in China. It has raised $784m in funding to date.