In advance of Bitmain’s U.S. IPO, Financial Results Get Revealed

Chinese manufacturer of application-specific integrated circuit chips, used for bitcoin mining, Bitmain has had an interesting financial year so far. While they lost $625 million in the first two months of 2019, the company did a net profit of $315 million in March and, according to a report by the Chinese WeMedia, they’ve been seeing good results in miner sales ever since.   

Bitmain was said to consider an IPO bid in the United States which had to occur in July, but we are already in August and still no filings have been made.

Q1 financial figures

The numbers and statistics cited in the report were obtained from reliable sources, according to the report’s author. The same ‘reliable sources’ revealed that, based on the company’s assessment of between $13 billion and $15 billion, Bitmain anticipated raising approximately $1 billion – $1.5 billion in the United States IPO.

Of course, this information cannot be considered as the ultimate and only truth as there was a Bloomberg report in June, quoting “people with knowledge of the matter”, that Bitmain was looking upon lowering its Initial Public Offering aim to $300-$400 million in the U.S. from the target of $3 billion from the Hong Kong IPO.

If we return to the recent report, Bitmain’s 2019 Q1 revenue was $1.082 billion and specifically:

  • January – $253 million with $7.91 million gross profit
  • February – $253 million with $14.7 million gross profit
  • March – $578 million with $25.21 million gross profit

It was exactly March when the company finally climbed out of the red zone. If we compare 2019 with the previous year, Bitmain lost $310 million in the first quarter of the year, where in the first half of 2018 their revenue was $2.84 billion with a net profit of $743 million.  

The recent report included information about Bitmain’s assets and liabilities as well. The company registered $1 billion in assets totally, while the debt ratio showed 16%, excluding preferred shares.

Bitmain’s future figures should be superb

The company is forecasting remarkable sales growth in Q4, as they’re actively working on bitcoin mining machines and placed an order for 30,000 7nm wafers from Taiwan Semiconductor Manufacturing Company.

When examining Bitmain’s 2017 financial information, one can clearly see that the main contribution of their yearly revenue obviously relies on their second half results. We can see this regularity when comparing their H1 figures with the annual ones (2017) from their prospectus filed to HKEX:

  Revenue Gross profit After-tax profit
H1 $274 million $134 million $83 million
Annual – 2017 $2.518 billion $1.213 billion $701 million

With respect to all these findings and regularities, Bitmain is expecting serious income in Q3 as a result of their customers’ advance payments for mining machines. Q4 will be a period for huge shipments as the Taiwan Semiconductor Manufacturing Company is expected to produce a huge amount of 7nm chips for 3-4 months from the order placement.

This year Bitmain is also focusing on AI products, aside from 7nm miners. According to the report, the three products that are equipped with the cloud chip BM1684 made revenue of $4.61 million in 2019’s Q1.  

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