China’s second-largest Bitcoin mining equipment maker, Canaan Creative, plans to seek an initial public offering (IPO) on the Hong Kong Stock Exchange, South China Morning Post has reported.
According to the report, published earlier today, the Hangzhou-based company wants to conduct an IPO in Hong Kong instead of in the US, though the final decision has not yet been made. Canaan had previously been considering both Hong Kong and the US for a share sale, the newspaper said, citing unnamed sources familiar with the matter. The sources also said that the company was seeking to raise $1 billion through the IPO.
If successful, the move would make Canaan the first blockchain related business to be listed on the Hong Kong Stock Exchange. As noted by SCMP, the company has previously made several attempts to launch an IPO. In 2016, Canaan attempted to gain a listing in China’s yuan-denominated A-share market through buying Shandong-based electric equipment maker Luyitong, but the fell through after Chinese regulator questioned the deal for being overvalued. Last year, Canaan tried again to apply for a listing in China’s “New Third Board” market, known for its less stringent listing requirements that make it better suited for start-ups. That move also failed, but the company did not disclose the reasons why, SCMP notes.
In January Canaan published unaudited results, showing that its annual net income had increased by a whopping 600% in 2017 to 410 million yuan (US$64 million). However, China’s clampdown on cryptocurrencies, including the September bans on initial coin offerings and domestic crypto exchanges, could hurt the company’s ability to maintain the same level of growth, given that it does most of its business in the People’s Republic.
Canaan Creative co-chairman Kong Jianping indicated in April that the company planned to expand to into the software business.