Chinese mining machine giant Ebang applies for US listing, plans to raise $100 million

Ebang International, one of the world's largest Bitcoin mining machine manufacturers, has just officially applied for an IPO (initial public offering) in the United States.

According to an application disclosed by the U.S. Securities and Exchange Commission (SEC) on Friday, Ebang plans to raise up to $100 million through the IPO. The company intends to sell Class A common shares with a par value of HK$0.001 (US$0.00013) per share.

China's Ebang plans to list on the New York Stock Exchange or Nasdaq Global Market under the ticker symbol "EBON".

Ebang is one of the top ASIC chip designers for the bitcoin mining industry. 82% of the company's revenue in 2019 came from making these chips for bitcoin mining.

However, Ebang’s revenue fell from $319 million in 2018 to $109.1 million in 2019. The company’s total loss in 2019 was $30.6 million, compared to a total profit of $24.4 million in 2018.

(Comparison of Yibang’s revenue in 2018 and 2019)

Income

The Bitcoin mining machine produced by Ebang is Ebit, and most of its revenue in 2019 came from the sales of E12 series mining machines, followed by the E10 series.

It’s also worth noting that both Ebang’s chip quantity and average selling price declined in 2019 compared to the previous year. In 2018, Ebang sold 415,930 mining chips at an average price of $737, while in 2019, it sold 289,953 chips at an average price of $304.

Yibang said:

“The decline in Bitcoin prices in 2018 and the first quarter of 2019 resulted in a significant decline in our sales volume and average selling price of Bitcoin mining machines. Although Bitcoin prices began to recover in the second quarter of 2019, our operations generally lagged behind the rise in Bitcoin prices, and we earned $109.1 million in revenue in 2019.”

Risk factors

Ebang said its business depends largely on the price of bitcoin.

“Our operating results have been and will continue to be significantly impacted by the volatility of the price of Bitcoin, and in particular, have been negatively impacted by significant declines in the price of Bitcoin.”

“The price of Bitcoin tends to directly affect the market demand for our Bitcoin mining machines, both in terms of price and quantity, and we expect this trend to continue.”

The coronavirus pandemic has had a "negative impact" on Bitcoin prices, and Ebang said lower prices "may continue in the short term and have a negative impact on our business operations and financial condition."

"The quarantine measures taken to prevent the spread of the epidemic have caused us and our customers to experience significant business interruptions and shutdowns, which may result in shortages of raw materials and reduce our production capacity. The possibility of default by our customers has also increased, and product delivery may be delayed."

Second application

This is the second attempt by Ebang to go public. In June 2018, the company applied for an IPO in Hong Kong but failed. In December last year, it was reported that Ebang was planning an IPO in the United States.

Ebang's competitor Canaan Creative, also from China, went public in the U.S. last year. The company went public on the Nasdaq in November last year, raising $90 million. But the company's stock price has been hit hard, falling 53% since its listing.

(Canaan Creative's stock price trend)

Bitmain, a rival of Ebang and Canaan, also tried unsuccessfully to list in Hong Kong, and late last year there were reports that Bitmain was also considering filing for an IPO in the United States.

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