Canaan Creative's total revenue in the third quarter was RMB 670 million, with mining machine revenue accounting for 98.3%

According to the official website of the U.S. Securities and Exchange Commission (SEC), after submitting the first primary prospectus on October 28, mining machine manufacturer Canaan Creative updated the second revised primary prospectus on November 5, and also submitted a registration of securities on November 6.

Compared with the prospectus published on October 28, the proposed maximum fundraising amount is still US$400 million, but the new consolidated financial statements have updated the previous financial situation in the first half of this year to the financial data for the nine months ending in September 2019. The revised prospectus is still an informal version of the prospectus, and the most anticipated IPO price per share has not been made public, and the issuance size is not the finalized number.

According to the latest financial data, Canaan's total revenue for the nine months ending September 30, 2019 was RMB 959.4 million (approximately US$134.2 million). In addition, the net loss for the nine months ending September 30, 2019 was RMB 236.3 million (approximately US$33.1 million).

Compared with the data for the first half of this year in the previous financial statements, the revenue for the six months ending June 30, 2019 was RMB 288.8 million (approximately US$42.1 million), a decrease of 85.2% from the total revenue of RMB 1.9471 billion (approximately US$278.7 million) for the six months ending June 30, 2018. And for the six months ending June 30, 2019, its net loss was RMB 330.9 million (approximately US$48.2 million).

It can be seen that in the three months of the third quarter of this year alone, Canaan's total revenue reached 670 million yuan (about 95.9 million US dollars).

Mining machine revenue is the main source of revenue for Canaan . In 2017, 2018 and the six months ending June 30, 2019, sales of Bitcoin mining machines and other Bitcoin mining machine parts and accessories accounted for 99.6%, 99.7% and 99.4% of total revenue, respectively. According to the latest updated data, in 2017, 2018 and the nine months ending September 30, 2019, Bitcoin mining machines accounted for 99.6%, 99.7% and 98.3% of total revenue, respectively. Mining machine revenue still accounts for a large proportion.

The decline in Bitcoin prices in 2018 led to a significant drop in the sales volume and average selling price of mining machines, which directly had a significant adverse impact on Canaan's operating performance and financial condition. According to data from Blockchain.info, the price of Bitcoin fell from $14,166 on December 31, 2017 to $3,792 on December 31, 2018. From January 1, 2019 to October 31, 2019, the highest price of Bitcoin reached $12,686.39 and the lowest price was $3,225.30.

The price of coins rebounded in the second quarter, and the mining machines were in short supply during the flood season. Since the third quarter, the revenue has indeed rebounded significantly compared with the first two quarters of this year. However, Chen Lei, Secretary General of Peking University Blockchain Club and founder of BitBlue Whale, said in an interview with Caijing.com Chain Finance that the current production capacity of mining machines is generally determined when the chip orders are placed by manufacturers three to six months ago, and the response of manufacturers' production capacity is generally delayed. And because the price of Bitcoin only began to recover in the second quarter of 2019, Canaan's revenue growth rate generally lags behind the increase in Bitcoin prices.

Therefore, although the total revenue in the third quarter was more than twice the combined revenue of the first two quarters of this year, Canaan's total revenue for the nine months ending September 30, 2019 was RMB 959.4 million (approximately US$134.2 million), which was still a decrease of about 60.5% compared with the total revenue of RMB 2.4276 billion (approximately US$339.5 million) for the nine months ending September 30, 2018.

We are now very close to the time when Canaan Creative will officially go public on the U.S. stock market. Today, a person close to Canaan Creative told Caijing.com.cn Chain Finance that Canaan Creative’s listing in mid-November this year has been basically confirmed.