Losing 370 million in two years, preparing to open an exchange, and Ebang International moving to US stocks is hanging by a thread?
Editor's Note: This article comes fromInterchain Pulse (ID: HiveEcon), Author: Liangshan Huarong, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Interchain Pulse (ID: HiveEcon)
, Author: Liangshan Huarong, reproduced by Odaily with authorization.
On April 24, Ebang International formally submitted an IPO application to the US SEC, planning to list on the New York Stock Exchange or Nasdaq, and planned to raise US$100 million.
This is the third time that Yibang International has launched an impact on the capital market. Previously, Ebang International had failed the Hong Kong Stock Exchange twice because it did not comply with the "principle of listing adaptability" and was entangled in many lawsuits.
But this time, under the circumstances that friend business Canaan Yunzhi is being "accused of fraud" by short-selling agencies and Chinese concept stocks are facing a crisis of confidence, Ebang International has chosen to insist on listing in the United States at this moment, or the future is also uncertain.
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Why is Yibang eager to go public?
Under the current harsh environment, it is the worst time to go to the United States for an IPO.
However, Ebang International's hard work has a last resort - it is very short of money.
Its prospectus shows that in 2018 and 2019, Ebang International's revenue was US$319 million and US$109 million, respectively, and its net profit was a loss of US$11.81 million and US$41.07 million, respectively. Compared with its peer Canaan, Ebang International's operating income in 2019 was only half of that.
Moreover, Yibang International's cash flow is not sufficient. The prospectus shows that in 2018, the company achieved net cash flow from operating activities of -108 million yuan, and in 2019 achieved net cash flow from operating activities of -13 million yuan.
Not only that, as of December 31, 2019, Ebang International had other payables of US$13.74 million and accounts payable of US$11.83 million on its books.
According to the disclosure in the prospectus, in the past, Ebang International mainly met its working capital needs through net cash generated from operating activities, capital contributions from shareholders and bank loans.
The current situation of declining profitability and tight cash flow makes it difficult for Ebang International to meet its development needs with cash resources.
Interchain Pulse observed that Canaan has not released a new mining machine product for nearly a year, and its latest Ebit E12 series mining machine was released in May last year.
But on the other hand, Bitmain, Whatsminer and Canaan have launched the 7nm mining machine Antminer S19 series, 8nm mining machine Whatsminer M30S and Avalon A11 series high-power mining machines in the past half a year. , and the power consumption ratio is lower.
Ebang International’s Ebit E12 series mining machine is still a 10nm mining machine with a computing power of 55T/s and an energy efficiency ratio of 57W/T, which can only be compared with Canaan’s previous generation mining machine A1066 Pro.
Although Yibang International pointed out in the prospectus that its latest 8nm and 7nm chip mining machines were designed in 2019, they have not been released to the public.
According to the prospectus, Ebang International’s research and development expenses in 2018 and 2019 were US$43.5 million and US$13.4 million respectively, and its R&D investment in 2019 decreased by 69.2% year-on-year.
Due to the sharp drop in research and development investment, the performance of mining machine products lags behind that of peers, making Ebang International's mining machine products "not priced".
Not only that, Yibang International's mining machine sales have also declined sharply. The data shows that in 2018, Ebang International sold about 416,000 mining machines, but in 2019 its sales dropped to 290,000; the average selling price of a single mining machine also dropped from $737 to $304.
The sharp decline in the main business income has made Ebang International start to look for new business growth points. Unlike Bitmain and Canaan Zhizhi's AI business, Ebang International has set its sights on the cryptocurrency exchange business that brings in quick money.
In the prospectus, Ebang International stated that it intends to establish a cryptocurrency exchange outside of China to provide services related to cryptocurrency transactions for the cryptocurrency community.
In the current situation where the U.S. and China’s regulatory policies on cryptocurrency transactions are still unclear, Ebang International’s hastily deploying the exchange business is undoubtedly a risky move, and this also adds more uncertainty to whether it can successfully break through the IPO sex.
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Switching to US stocks or hanging by a thread
Compared with the cryptocurrency exchange business, Ebang International's listing in the United States faces greater uncertainty because the numerous prosecution cases it has encountered before have not been effectively resolved.
For example, in September 2018, Ebang International was involved in the "Yindou.com P2P Thunderstorm" case. There was an unidentified fund transaction of up to 520 million yuan between Ebang International and the actual controller of Yindou.com, and some victims questioned this. is the transfer of assets.
In the same year, Ebang International was sued by Ma Xiaoyun, a miner customer. The 500 Ebit E10 mining machines purchased by Ma Xiaoyun for 13 million yuan suffered frequent failures, and the number of repairs reached 873 times within 3 months. The lawsuit between the two parties has not yet been resolved.
