Bitmain, the world's largest cryptocurrency mining equipment manufacturer, has officially filed for an initial public offering (IPO) with the Stock Exchange of Hong Kong.
Bitmain, the dominant force in the Bitcoin mining industry, has yet to disclose a target valuation. Analysts have determined that the success of Bitmain's IPO will represent cryptocurrency market demand for institutional and retail investors in the Hong Kong marketplace.
Bitmain's official IPO document explicitly emphasizes the company's market share exceeding 74.5%, which accounts for the vast majority of cryptocurrency mining equipment shipments globally.
“According to Frost & Sullivan, we are the largest global ASIC-based cryptocurrency mining hardware company in terms of sales revenue in 2017, accounting for a market share of 74.5%. We offer a variety of mining hardware equipped with proprietary ASIC chips under our Antminer brand,” read the IPO filing.
A solid selling point for investors is the dominance Bitmain already has over the cryptocurrency mining sector. Bitmain has seen an impressive yearly revenue growth of 328.2% yearly since 2015, as its revenue has grown from $137.3 million in 2015 to $2.5 billion in 2017.
The mining giant compared to the profit of Nvidia, the largest manufactuer of graphics processors in the technology sector, generated more than $1.1 billion in early 2018. This demonstrated a profit margin double that of Nvidia which reported a quarterly profit of $550 million.
As well as being the dominant force in manufacturing mining equipment, Bitmain operates two major mining pools on BTC.com and Antpool, as well as 11 mining centers in China. BTC.com and Antpool account for 37.1% of the Bitcoin global hashrate according to the IPO document.
“As of June 30, 2018, we had opened 11 mining farms in the PRC, located in Sichuan Province, Xinjiang and Inner Mongolia, with an aggregate capacity to store approximately 200,000 sets of mining hardware. We also primarily operate two mining pools, BTC.com and Antpool, currently the world’s largest and second largest Bitcoin mining pools in terms of computing power,” the document read.
Several research groups, including BitMEX Research, have revealed that Bitmain has lowered its profit margin with the intention of placing pressure on their competition. This means that Bitmain could redirect its focus to maximize venture profitability that may lead to higher profit margins and revenues.