After several setbacks, another miner entered the Nasdaq market, which is the second miner to successfully IPO after last year's listing of Jianan technology in the US stock market.But the company, called Yibang international, suffered from the cold reception of the market. After listing, it broke. After opening, the price fell all the way. It fell 27% at one time, reaching a minimum of $3.81. The final closing price was $5, down 4.4%.
In the digital money market as a whole depressed, mining machine unsalable, mining machine manufacturers performance is not good. For getting rid of the single dependence on mining machine business, the three major manufacturers are seeking transformation, hoping that listing can bring more abundant and stable funds, and increase investment in AI chips. But in the current environment, the once-leading bitland deep in the "palace fight ", the latter two can bring a new turn for the industry, but also a question mark.
Burst on IPO, down 4.4%
At 09:30 p.m. on June 26, Beijing time ," the second share of Bitcoin mining machine "Yibang International in Hangzhou ," Cloud Bell ", officially landed on Nasdaq, the stock symbol is EBON.. Yibang issued a total of 19.3236 million shares of A common stock in the IPO at $5.23 a share, raising about $100.75 million and a total market value of $685 million.
Yibang international opened prices all the way down, intraday fell 27%, the lowest hit $3.81. The final closing price was $5, or 4.4%, and fell below the offering price, with a market value of $655 million (4.635 billion yuan), temporarily above the market value of $296 million for Jiannan Technology.
At the end of last year, landing on NASDAQ, the head of the "first mining machine" Jia Nan Yunzhi, after the listing of the stock price "falling endlessly. Last November 21, Jia Nan Yun Zhi landed on the Nasdaq, open 10 million shares, the issue price of $9. On the opening day, Jia Nan Yunzhi rose to $13,44% higher than the opening price, began to decline, the day appeared a break, once fell to $8.21.
A month later, its shares halved and briefly returned above $8 on february 12th. Its share price hit $5.99 a share the day after half the bitcoin block bonus (may 13), but has since started to fall. It fell below $2 on June 12 and closed at $1.94 yesterday.
Frank, vice president of investment ParallelVC blockchain investment fund, told chinese journalists that it seems that there is no practical significance and value for mining machine manufacturers to go public. Because its own performance and earnings performance is not good, the market is not sought after, after listing the stock price all the way down. At the same time, its own business development also encountered a certain bottleneck, the original mine machine products have been backward, new products have not been out. If the performance is not good after listing, it will affect investors' understanding of the industry and may have a negative impact on other enterprises.
A sharp 30% reduction in shipments and a significant reduction in R & D costs
In terms of revenue, in 2018 and 2019, Yibang International's revenue was $319 million and $109.1 million, respectively, down 65.8%. The gross profit in 2018 was $24.446 million, and the gross loss in 2019 was $30.564 million. The net losses in 2018 and 2019 were US $11.814 million and US $41.073 million, respectively, and the net losses attributable to the IPO main company, Yibang International Holdings, were US $12.308 million and US $42.403 million.
In addition, the prospectus shows that in 2019, Yibang International's four models of mining machines, a total of 289950 sold. By contrast, in 2018, although only three models of mining machines were sold ,415900 units were sold, compared with a 30% drop in 2019 shipments.
The main products of Yibang International are wing bit E9、 wing bit E9 series, wing bit E10 series, wing bit E12.. Total sales of 415900 mining machines in 2018, wing bit E9、 wing bit E9 series accounted for the majority ;2019 mining machine sales fell to 290,000, although the new mining machine E12 sold nearly 50,000, but 2018 main model E9 series and E10 series still accounted for nearly 80% of shipments.
As for the decrease in sales of mining machines, Li Lianxuan, chief researcher of okiyun chain, told the securities company's Chinese reporter that the high sales of mining machines in 2018 was mainly due to the bull market of bitcoin at the end of 2017 and the beginning of 2018. At that time, the sales of mining machines were extremely hot, and many mining machines needed to be pre sold, so the shipment volume in 2018 was increased. Similarly, in the second half of 2018 and the first half of 2019, the bitcoin market was in a bear market, which was extremely depressed, resulting in unsalable mining machinery, so the volume of shipments was very low.
In the past two years, bitcoin market has been sluggish, and the price has been hovering between 7000-10000 US dollars for a long time, which has led to the weak demand and price of mining machine market. In 2019, the average selling price of mining machines dropped from $737 in 2018 to $304.
In terms of products, Yibang international seems to be less competitive than its peers. Yibang International's mining machine products yibite e 9 series, yibite e 10 series and yibite e 12 are all 10nm mining machines, while competitors have launched 7Nm mining machines. In particular, it is worth noting that the R & D cost of EBN international in 2019 dropped sharply, from 43.5 million US dollars in 2018 to 13.4 million US dollars in 2019.
All three mining machines have failed to go to Hong Kong for listing, and the "palace fight" in mainland China has never stopped
At present, two of the three miners have successfully landed in the capital market, but for the controversial miners, the way to go public is full of twists and turns. Hong Kong was their common first choice, but many applications failed, and finally landed from NASDAQ.
The fast-changing digital money market, represented by bitcoin, could wreak havoc on companies once the market falls into a long-term downturn and mines are unsalable. In addition, due to the increasing difficulty of mining, mining machine replacement quickly, the need for high R & D investment. Combined with various factors, if we can raise large-scale and more stable funds through listing, we will greatly improve our competitiveness.
The world's top three producers of digital currency mining machines are all in China, which is also its most important sales market. Take Yibang international as an example, in 2018, the proportion of customer revenue in China's market to the total revenue of Yibang international reached 91.4%. In 2019, the proportion decreased, but still reached 87.5%.
However, due to doubts about the compliance of digital money and related industries, the possibility of mining machine manufacturers listing in the domestic capital market is zero. Therefore, the three major mining companies have sought to list from Hong Kong. Yibang International first submitted the Hong Kong Stock Exchange listing application on June 24,2018, but the application expired in December of that year. On December 20,2018, Yibang International submitted a listing application to the HKEx for the second time, and on June 21,2019, the HKEx disclosed information that the Yibang International prospectus was invalidated again.
At the end of last year, "the first share of blockchain" listed on Nasdaq was full of twists and turns. In 2016, Lu Yitong proposed to pay 3.06 billion yuan to acquire 100% equity of Jianan Yunzhi. Jianan Yunzhi is expected to be listed on the back door. However, the asset restructuring was inquired by Shenzhen Stock Exchange three times and failed to succeed. In the middle of 2017, Jianan Yunzhi applied for listing on the new third board, and took the initiative to leave six months later. In November 2018, Jianan Yunzhi's IPO application in Hong Kong was invalid.
In the "second "," third" has successfully landed in the capital market, and as a mining machine "leader" of the mainland listing has failed. On September 26,2018, Bitland submitted its first prospectus to the Hong Kong Stock Exchange. At the time, founders jen ke tuan and wu jihan were major shareholders holding 36% and 20% shares respectively. At that time, Bitland planned to raise $1 billion, valued at $15 billion. The application was subsequently invalidated.
In addition to the mining machine business, bitcontinental is also involved in mining pools and other businesses. It is a well-known "mining bully" in the industry. Whether it is listed or not has always been concerned. Last year, it was rumored that bitcontinental had secretly filed an application for listing with the SEC, sponsored by Deutsche Bank. Later, bitland fell into an internal struggle. Wu Jihan and Zhan ketuan, the two founders who fought side by side, launched a "palace fight" to fight for the control of the company. So far, the conflict has not been resolved, and the listing is still pending.
The digital money market is depressed and the transformation of miners is difficult
As a way to get rid of the excessive dependence on the mining machine business, so that the company can cross the bull and bear cycle of the digital money market, the three major mining machine manufacturers of Bitland, Jiannan Yunzhi and Yibang Technology are also seeking to transform and expand their business to chip and AI. The most representative is the Bitcontinent, from the public information, the relevant attempts have been carried out.
According to the prospectus information, Yibang business transformation direction of the choice of "out of the circle" thinking. will expand the product range and plan to expand the business to the upstream and downstream markets of the value chain between blockchain technology and the virtual money industry to diversify the products, in addition to exploring the application of blockchain technology to non-virtual money industries, such as financial services and health care.
Jiannan technology is hoping to explore more on the chip. In May 2019, Zhang Nanzhi, founder of Jia Nan Yunzhi, said that Jia Nan Yunzhi's investment in AI chips and investment in mining machines are not much different. In 2019, Jia Nan Yunzhi's AI chip revenue is expected to be tens of millions of yuan. It is planned to take three years to achieve a 1:1 ratio of mining machines and AI business revenue, and said that they are very optimistic about the AI market.
However, according to the prospectus of Jianan Yunzhi, as of June 30, 2019, the revenue of AI products is 500000 yuan, accounting for only 0.17% of the product revenue, and the revenue of blockchain products (mainly the revenue of mining machinery) is 287.2 million yuan, accounting for about 99.83%. This is not only far from the goal mentioned by Zhang Nangeng.
Bitland is also seeking to move toward AI chip. Last year an internal letter revealed that the company will focus on digital money and artificial intelligence chips and products and services based on this; set up ant mining machine, feng chip, AI computing power, ant mining pool, BTC.COM、 self-computing power and other business lines. But the company's mining machine and AI business line imbalance, one side of the long-term "support" the other side of the rumors are quite a lot. The eight-month-long "palace fight ", an important reason is also the two business differences.
Li Lianxuan told China's brokers that the future of mining machinery manufacturers mainly depends on the bitcoin market and their own technological R & D strength. If the bitcoin market is in a bear market for a long time, there is no doubt that the operation of these mining machine manufacturers will be seriously affected; but on the other hand, as long as the chip developed by a mining machine manufacturer has advantages in power consumption and computing power, it can go through the bull bear cycle of bitcoin.
But whether the chip can be a life-saving miner, still have a question mark. "Since ASIC may not be able to develop into mainstream solutions for AI technologies and applications, we may not be able to leverage ASIC to achieve growth in the market for AI technologies and applications ," he said in his prospectus. If the AI market does not develop as currently expected and we can not penetrate into the new application market, our future revenues and profits may be significantly and adversely affected ".