May 21 (NBD) -- Famous bitcoin mining machine manufacturer Canaan Inc. has submitted an application for initial public offering to the Hong Kong Exchanges and Clearing Limited.

The filing didn't disclose how much the company plans to raise, but said the funds raised will be poured into the R&D of chips for artificial intelligence algorithms and applications, chips for blockchain algorithms and applications, overseas strategic investment and business expansion, and optimization of supply chain.  

The fabless IC designer, founded in 2013 and headquartered in Hangzhou, eastern China's Zhejiang province, ranked the second around the world in 2017 in terms of hashrate, according to the prospectus. 

In the first quarter of this year, it sold 101,100 mining machines even though the bitcoin price began to show a downward trend in December 2017. 

Last year, the company delivered 295,000 mining machines and netted profits of 361 million yuan (56.5 million U.S. dollars) on a revenue of about 1.31 billion yuan (204.8 million U.S. dollars). 

The year 2016 witnessed the shipment of 9,727 units of mining equipment and generated 47.7 million yuan (7.5 million U.S. dollars) in revenue and 15.1 million yuan (2.4 million U.S. dollars) in net profit. In 2015, the sales of mining machines were 93,800 units, and the revenue reached 316 million yuan (49.5 million U.S. dollars) while the net profit came at 52.5 million yuan (8.2 million U.S. dollars). 

Juding from these figures, Canaan is growing at a fast pace, and the company yielded more than a 200-fold increase in net profit over the past three years. 

However, the great fluctuation in bitcoin prices and the market players' attitude towards bitcoins are big risks to Canaan, as mining machines are a strong contributor to the company's revenue. 

Canaan said its products still have a ready market due to increased economic gains from bitcoin mining. Even so, the company is ramping up its efforts to launch new products and expand its presence in overseas markets. 

The company, however, admitted that the development of the blockchain technology is still at its infancy and the new technology might not be widely accepted by the market in the future. The company's business performance would be largely affected if the bitcoin's status among cryptocurrencies and the way of mining changed.

In fact, there are always negative comments on bitcoins. 

At last week's World Intelligent Congress in Tianjin, Alibaba Chairman Jack Ma said that blockchain isn't a bubble, but bitcoin is. 

Not only so, some research institutions are also taking a bearish attitude towards bitcoin. Shanghai-based Orient Securities, for example, is just one of them. According to the company, it is possible to see bitcoin price slip to 1,000 U.S. dollars, but cryptocurrencies with platform and practical application scenarios will have a promising prospect, such as ripple designed to revolutionize cross-border payments.

Email: lansuying@nbd.com.cn