Chinese bitcoin mining hardware maker Canaan Creative is planning to seek an initial public offering in Hong Kong instead of US, the South China Morning Post reported, citing people familiar with the matter. The company plans to raise as much as $1 billion in its IPO. The IPO, if successful, would be the first from a blockchain-related company on the city’s market.
Hangzhou-based Canaan reportedly had said earlier that it was considering both Hong Kong and the US for a share sale. A final decision is yet to be made.
Canaan, founded in 2013, designs and sells high-performance integrated circuits. It is behind the Avalon series of bitcoin mining machines. In 2017, the company is said to generate net income of 410 million yuan or $64 million, a growth of 600 percent from the previous year. Canaan’s majority of clients are from China, which has long been a crypto mining superpower with cheap electricity supply.
In 2016, Canaan tried to gain a listing in China through the purchase of electric equipment maker Luyitong, but the plan was canceled after regulators opposed the deal for being overvalued.
In 2017 too, Canaan tried to apply for a listing in China’s New Third Board market amid the country’s ban on trading cryptocurrencies and initial coin offerings or ICOs, but fell through, the report said.
In China, crypto miners are facing strict restrictions with toughened regulatory crackdown by Chinese authorities, even as the country is reported to have filed for the most patent filings for blockchain technology globally in 2017. The country reportedly accounted for 50 to 70 percent of BTC mining last year.
Cryptocurrencies, like bitcoin, are mined by solving complex mathematical problems, and the owners of the computers involved in mining are rewarded with new digital tokens or coins. The mining can be done with any processor, but application-specific integrated circuits or ASICs are used by serious miners for its speed benefits.
Canaan Creative and Bitmain buy specially built ASIC chips from Taiwanese chip maker Taiwan Semiconductor Manufacturing Company or TSMC.
Canaan Creative co-chairman Kong Jianping said recently that the company pans to expand into the software business besides producing chips.