As the Chinese cryptocurrency mining giant Bitmain has finally filed an application to go public on the Hong Kong Stock Exchange (HKEX), some ‘top secrets’ also emerge from the public financial statements.
There are 10 inconspicuous secrets hiding behind the statement. We have discussed 3 of them in yesterday’s article, including the unbalanced salaries, shareholding issue and the mining equipment sales revenue.
Today we are going to discuss another 3 secrets of Bitmain.
1.The firm’s finance department exchanges the cryptocurrencies for fiat money regularly due to the large impact of the cryptocurrency prices.
According to the public financial statement, for the years ended December 31, 2015, 2016, 2017 and the first half year of 2018, Bitmain has about 9.9%, 25.0%, 30.1% and 28.0% of its assets in cryptocurrencies.
As of June 30, 2018, Bitmain holds $872.58 million worth of cryprocurrencies. Mainly consisted by Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC) and Dash (DASH).
Meanwhile, Bitmain admits that their business and financial situation are highly correlated with the fluctuations in cryptocurrency prices.
In order to minimize the cryptocurrency price related risks, Bitmain has taken a number of measures. For example, its finance department monitors the total amount of their cryptocurrencies and price fluctuations on a daily basis; and exchange the cryptocurrencies into fiat money based on the company’s funding needs.
2.Over 50% of Bitmain’s revenue is from overseas market, 27% of the mining equipment sales is paid in cryptocurrencies.
In 2015, 2016, and 2017, Bitmain generated approximately 65.3%, 51.0% and 51.8% of their revenue from overseas market.
In 2017, 27% of Bitmain miner sales is paid in cryptocurrencies, in the meantime, they also acquire cryptocurrencies from their own mining pools, as thus Bitmain’s cryptocurencies holdings becomes spectacular.
According to the financial statement, in 2017 and the first half year of 2018, the revenue of mining equipment sales increased by 10x from $220.9 million to $2.38 billion, mainly due to the increase in selling amount and selling prices.
3.Operates 11 mining farms in China, planing to generate mining farms overseas
Bitmain operates 11 mining farms in China, mainly centered in Sichuan, Xinjiang and Inner Mongolia. Its largest mining farm located in Inner Mongolia that can accommodate approximately 60,000 mining machines with a total power capacity of approximately 90 MW.
According to the financial data, the proprietary mining revenue increased gradually from 2015 to June 30, 2018, mainly due to the bull market and increase amount in proprietary miners.
Meanwhile, Bitmain is generating new mining farms in the United States and Canada for their low energy prices and cold weather.
Bitmain is building three mining farms in the United States, located in Washington, Texas and Tennessee. These mining farms is expected to be operational by the first quarter of 2019.
Bitmain is also planing set a mining farm in Quebec Canada, due to its low-cost hydropower supply.
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