The end of the road for the mining machine giant to go public? Yibang has filed a case against P2P

It is said that 2018 is the first year of blockchain, but I think the most interesting thing this year is not the blockchain circle, but the mining machine bosses.

Not long after Bitmain submitted its prospectus to the Hong Kong Stock Exchange, the IPO journey of Ebang International, the world's third largest mining machine company, may be coming to an end.

It is said that 2018 is the first year of blockchain, but I think the most interesting thing this year is not the blockchain circle, but the mining machine bosses.

In addition to seeking new business directions, or perhaps because financing in the cryptocurrency industry is not as good as before in the bear market, the three major mining machine manufacturers all chose to go public in Hong Kong this year.

However, once the drama of mining machine manufacturers going public begins, it will not be so easy to back off.

Two days ago, Sanyanjun translated an article published by Coindesk accusing Bitmain of fabricating news to fool investors. Coindesk stated that Bitmain was suspected of misleading investors by saying that it had received investment from DST and GIC. In fact, both companies denied investing in Bitmain.

Although Bitmain said that the information Coindesk mentioned was false , it is enough to show that it is not easy for mining machine manufacturers to go public. However, before the news that Bitmain was suspected of falsifying investment information was outdated, Ebang International, one of the three major mining machine manufacturers, ran into problems on its way to listing.

Yibang International and the P2P platform that collapsed were involved in huge unknown transactions

On the 27th, according to a report by China Business News, the world's third largest mining machine manufacturer, Ebang International Holdings Co., Ltd. (hereinafter referred to as "Ebang International"), had large financial transactions with Yindou.com, and pointed out that Ebang International suspected of using more than 500 million yuan of funds from Yindou.com to inflate sales revenue. In addition, according to China Business News, relevant regulators said:

"The Beijing police have filed a case on Yindou.com. Whether it is 300 million or 100 million of the 500 million between Yibang International and Yindou.com, it is the same thing. Whether these transactions are normal business transactions or of another nature, whether they are included in the scope of case tracking, and how to characterize them, this needs to be asked to the Beijing police who have the power of investigation."

According to this news, if the money received by Yibang International is indeed "illegally obtained", it may mean that its journey to IPO in Hong Kong will be declared over.

What exactly happened between Yibang International and Yindou.com?

To understand the ins and outs of this matter, we must first talk about Yindou.com. Yindou.com is a P2C (business-to-consumer) investment and financial management website for individual investors. By purchasing corporate debt, individuals inject funds into enterprises, solving the financing needs of enterprises and obtaining safe and high-yield financial management income.

To put it bluntly, it is a P2P business. There are many P2P "explosions" these days, and Yindou.com has also fallen into the trap. On July 18, 2018, Yindou.com issued an "Announcement on the Suspension of Yindou.com Operations", stating that Li Yonggang, the actual controller of Yindou.com, has lost contact, funds cannot be redeemed for the time being, and Yindou.com has ceased operations.

Announcement on the suspension of Yindou.com

Statement from Yindou.com CEO

A copy of the ID card of Li Yonggang, the actual controller, published by Yindou.com

After the announcement was issued, investors who suffered losses traced the case layer by layer, and a transaction worth 520 million yuan between the actual controller of Yindou.com and Yibang International was uncovered.

According to investor surveys, from the beginning of 2017 to February 2018, Cui Hongwei, the wife of Li Yonggang, the actual controller of Yindou.com, transferred 520 million yuan to Ebang International. From March to April 2018, Ebang International transferred 380 million yuan back to Cui Hongwei, but the whereabouts of 150 million yuan of the funds remains a mystery .

In addition, some media reported that Zhu Xiaolin, the financial officer of Yindou.com, was also suspected of helping Yibang International to inflate its sales revenue. Sanyan Finance found through Tianyancha that there was indeed a change record named Zhu Xiaolin in the equity change record of Yibang International.

Ebang International Equity Change Record

According to media reports, Ebang International responded that the 150 million yuan was a normal business transaction between Yindou.com and Ebang International, and was used to purchase cloud computing server equipment. According to another Ebang International executive, the 150 million yuan was for equipment purchase and was a normal contract payment.

Yibang may be unable to clear its name for false sales, mining machine manufacturers face a difficult IPO road

However, Yindou.com investors believe that this transaction is a "failed" investment project for Yindou.com and is the main reason for the "explosion" of Yindou.com. Yindou.com originally intended to make profits by investing in mining machines, but due to the bear market in the cryptocurrency circle, the income from mining machines dropped sharply, leading to the failure of the investment. 150 million yuan was wasted and the investment could not be recovered, causing the actual controller of Yindou.com to run away.

For Yibang International, even without counting the 380 million yuan returned, the 150 million yuan alone can boost its sales by as much as 17%.

Sanyan Finance consulted the prospectus of Ebang International and calculated based on its sales in 2017 that if the 150 million yuan was all used to purchase mining machines, it would be equivalent to 17% of Ebang International's Yibit mining machine sales in 2017.

Ebang International Mining Machinery Sales in 2017

Yibang International submitted its IPO prospectus in June 2018, and the 520 million transaction took place at the end of 2017, a critical time for Yibang International's annual financial audit. Therefore, it is difficult for Yibang International to clear itself of the suspicion of inflating its sales.

But this incident also shows that it may not be easy for mining machine manufacturers to go public . Putting aside the encryption policy of the place where they are listed, mining machine manufacturers face serious problems such as a single product structure and susceptibility to market fluctuations.

For Ebang International, the situation is even worse . Although the situation of the three giants dividing the mining machine market has been formed, Bitmain has a market share of up to 70%. In comparison, the strength of Ebang International, the third place in the mining machine industry, is not conspicuous .

Therefore, Yibang International does have the motive to inflate its sales in order to successfully go public.

At present, the answer to whether Yibang International can successfully go public is becoming increasingly unclear. According to China Business News , an investor of Yindou.com has submitted an application to the Hong Kong Stock Exchange to stop Yibang International's listing.

The three major mining machine manufacturers are currently in the "silent period" of IPO. Although they cannot actively provide any information, Sanyanjun will continue to quietly pay attention to the listing path of the mining machine giants.

Source: Sanyan Finance

Author: Xie Yulin