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Nov. 22 (NBD) – Canaan Inc. (NASDAQ: CAN), the world's second largest bitcoin mining machine producers, debuted on Nasdaq on Thursday, becoming the first company in the blockchain field to successfully complete initial public offering (IPO).

Canaan stock started trading at 12.6 U.S. dollars, up 40 percent from the offering price of 9 U.S. dollars, but the share price then went down by 0.11 percent to close at 8.99 U.S. dollars, the valuation of the company standing at 1.42 billion U.S. dollars.

Canaan's going public indicates the recognition of an emerging industry from traditional financial markets and the "old money", and it is conducive to both Canaan itself and the blockchain sector, noted Sun Shuang, blockchain industry analyst at Guosheng Securities.

It is noted that Canaan's listing comes shortly after Chinese authorities passed a new law in late October to facilitate the development of cryptography-related technology, which is believed to bring benefits to firms engaged in blockchain business such as Canaan.

National Business Daily (NBD) found that the IPO also marked the Hangzhou-based company's big step forward after facing setbacks for initial public offering for three times.

Canaan, which was founded in 2013, designs and produces blockchain servers and ASIC microprocessor solutions used for bitcoin mining. It has made three attempts to get listed in mainland China and Hong Kong in the past four years. However all plans fell through since the regulators remained skeptical about Canaan's business model.

According to the filing from Canaan, as sales of bitcoin mining machines contribute more than 99 percent of the company's total revenue, the price fluctuation of bitcoin significantly affect the demands of bitcoin miners, hence Canaan's financial performance. Bitcoin prices ranged from approximately 14,166 U.S. dollars per coin as of December 31, 2017 to approximately 3,792 U.S. dollars per coin by the end of 2018, according to blockchain data provider Blockchain.info.

Due to the price decline in 2018 and the first quarter of this year, Canaan's revenue decreased to 288.8 million yuan in the first half year of 2019, a sharp fall of 85.2 percent year over year.

NBD noticed that in an effort to getting rid of the heavy reply on the bitcoin business, Canaan has been shifting its focus on new ASICs (Application Specific Integrated Circuits) providing blockchain and artificial intelligence (AI) solutions since last year.

Canaan introduced its first AI chip last September, yet reaped nearly no income from the products so far.

But the company said it will continue developing new-generation chips. The fund raised in IPO will be used for R&D into ASICs for blockchain and AI applications and for paying off debts, Canaan mentioned in the prospectus.


Email: gaohan@nbd.com.cn

Editor: Gao Han