Canaan Creative submitted an application for listing in the United States after failing to list in the A-share and Hong Kong stock markets

According to IPO Early News, Canaan Creative, the world's second largest Bitcoin mining machine manufacturer, has reportedly secretly submitted an application for listing to the U.S. Securities and Exchange Commission (SEC) to raise US$200 million.

Source | This article is compiled and written by IPO Zaozhidao (ID: ipozaozhidao). The views in this article are for reference only.

This also means that Canaan Creative has become the first "mining machine giant" among the three major domestic mining machine manufacturers (the other two are Bitmain and Ebang International) to officially go public in the United States.

Public information shows that Canaan Creative is a fabless IC design company that provides advanced semiconductor solutions for complex computing problems. It mainly supplies and sells system products designed for Bitcoin mining under the AvalonMiner brand.

Canaan Creative's road to listing was quite bumpy, and it had previously tried various channels to enter the capital market.

First, in 2016, it attempted to list on the A-share market through a "reverse shell" approach.

In June 2016, Luyitong Electric, a company listed on the Shenzhen Stock Exchange's Growth Enterprise Market, announced plans for a major asset restructuring, intending to purchase all equity from Canaan Creative's 14 existing shareholders for a total of 3.06 billion yuan (1.061 billion yuan in cash and 1.999 billion yuan in share issuance). The transaction was later halted by the Shenzhen Stock Exchange due to suspicion of "backdoor listing".

In August 2017, Canaan again sought to be listed on the New Third Board. Unfortunately, in September of that year, the relevant government departments began to ban all cryptocurrency transactions and ICOs in the country. Canaan also received four consecutive inquiries from the stock transfer company in October and November of that year, asking about the impact of the policy environment and the company's ability to continue operating. Canaan finally gave up the listing in March of the following year.

In May 2018, Canaan Creative made a comeback, this time choosing the Hong Kong market. On May 15, Canaan Creative formally submitted its IPO application to the Hong Kong Stock Exchange, intending to list on the Hong Kong Main Board in the form of red chips, with Morgan Stanley, Deutsche Securities, Credit Suisse and CMB International acting as joint sponsors. Six months later, the Hong Kong Stock Exchange's official website classified Canaan Creative's listing application as "invalid", and its road to listing was once again frustrated.

According to the prospectus, Canaan Creative's revenue in 2015, 2016 and 2017 was RMB 48 million, RMB 316 million and RMB 1.308 billion respectively; gross profit was RMB 14 million, RMB 132 million and RMB 604 million respectively; gross profit margin was 29.1%, 41.7% and 46.2% respectively; and after-tax profit was RMB 2 million, RMB 53 million and RMB 361 million respectively.

The prospectus also shows that as of that time, the three founding team members of Canaan Creative held more than 50% of the shares and the distribution was relatively even: founder and CEO Zhang Nanxian held 17.60%, co-founder and CFO Li Jiaxuan held 17.20%, and co-founder (mainly responsible for technology) Liu Xiangfu held 17.61%.

However, in February this year, Canaan Creative's business information changed, and Liu Xiangfu no longer served as a senior executive of the company. According to the foreign blockchain information website Coindesk, citing an insider, Liu Xiangfu has left his daily management position and is no longer a member of the executive board; Canaan Creative denied this. Other media reported that Liu Xiangfu left because of a disagreement with the company's overall strategy.

On March 11 this year, Canaan Creative announced that it had completed a new round of financing of hundreds of millions of dollars, with a post-investment valuation of billions of dollars.

Regarding this round of financing whose details are unknown, Coindesk once again revealed that there were no new investors in this round of financing, and all investments were additional investments from old shareholders .

In addition to this round of financing in March this year, Canaan Creative's most watched round of financing was in May 2017, when it received nearly RMB 300 million (US$43 million) in investment from Jinjiang Group, Bopu Investment, Tunlan Capital, etc., with a post-investment valuation of nearly RMB 3.3 billion . The "2018 Hurun Greater China Unicorn Index" released by Hurun Research Institute in January this year showed that Canaan Creative's valuation was RMB 15 billion.

On June 21 this year, the listing progress of the other two "mining machine giants" coincidentally had completely opposite latest developments on the same day. Among them, Bitmain was exposed by Bloomberg to resume its IPO plan to go public in the United States; and Ebang International's Hong Kong listing application was officially listed as invalid by the Hong Kong Stock Exchange. According to the news that Uncle C later received, Ebang International has also considered going public in the United States.

According to Bloomberg, Bitmain is expected to formally submit an IPO application in the near future. Who will become the first mining machine giant in China to be listed in the United States, and whether the capital market will accept this type of enterprise, Uncle C will continue to pay attention.

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