The world's biggest maker of Bitcoin mining hardware wants to go public, but there are doubts over its profits

Hardware at retail store in Moscow selling cryptocurrency mining equipment by such brands as Bitmain and GPU. (Artyom Geodakyan via Getty Images)
  • Bitmain Technologies is the world’s largest manufacturer of chips used in the machines that mine Bitcoin.
  • The company filed to list on the Hong Kong stock exchange in September, with reported 2017 profits of $US701.4 million.
  • However, the FT reports that documents in previous funding rounds showed profit figures which were significantly higher than that.

Bitmain Technologies, the Beijing-based company which makes machines used to mine Bitcoin, wants to go public.

The company filed to list on the Hong Kong stock exchange at the end of September and aims to raise around $US500 million, the Financial Times reports.

If Bitmain raises the full amount, it would give the company an indicative valuation of $US18 billion.

That would represent a significant premium to September 2017, when Bitmain sold 5% of its equity for $US50 million in a Series A funding round, at an implied valuation of $US1 billion.

And according to documents seen by the FT, there are some discrepancies in the profit figures released by Bitmain in connection with recent capital raisings.

The IPO prospectus states that Bitmain’s net profit in 2017 was $US701.4 million.

But just a month earlier in August, the company released documents ahead of a pre-IPO funding round which said its 2017 profits were $US1.1 billion.

And in June this year, Bitmain reportedly closed a $US400 million Series B funding round. Documents circulated in connection with that capital raising said 2017 profits were $US1.25 billion.

Bitmain is the world’s largest manufacturer of ASIC (application-specific integrated circuit) chips used in the machines that mine Bitcoin.

According to the FT, the hardware produced by Bitmain is responsible for more than half of all the Bitcoin mined so far.

Also in the IPO prospectus, Bitmain said it owned cryptocurrency assets to the value of $US886.9 million, comprised of Bitcoin, Bitcoin Cash and Ether.

The company said it has received payments from some clients in cryptocurrency, and its crypto assets are reported at cost.

But some analysts have speculated that the actual amount of crypto assets owned is significantly less than the reported amount, given the sharp declines in crypto values since last December.

In addition to raising capital itself, Bitmain also led a $US110 funding round back in May for US-based crypto company Circle Financial.

There’s more at the FT here.

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