Billion International Hong Kong failed to list: a new round of bitcoin rose failed to rescue the third largest miner

Source: IPO knows the original title: "Establishment of the Hong Kong listing in Hong Kong: a new round of bitcoin failed to rescue the third largest miner"

According to the IPO, the prospectus submitted by Yibang International on the Hong Kong Stock Exchange has been shown to be invalid , which means that the second listing of the Hong Kong Stock Exchange will be terminated. Yibang International submitted a prospectus to the Hong Kong Stock Exchange in June and December last year.

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Yibang International is one of the world's three largest bitcoin mining BPU manufacturers (the other two are Bitland and Jianan Zhizhi), and is the leading blockchain technology company with ASIC chip design capabilities. In 2014, Yibang International entered the blockchain business field with its professional skills and experience in communication IC technology, and later became the earliest manufacturer of bitcoin mining BPU contracts in China.

The main business of Billion International is mining machine production and related work, specifically including the development of products and solutions for BPU, artificial intelligence data processors and other non-cryptocurrency blockchain applications for cryptocurrency mining. In addition, Yibang International is also engaged in research and development of communication technology applications, including 5G technology network access, exclusive network access and the most advanced broadband technology.

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According to the prospectus submitted in December last year, Yibang International's revenue for the first half of 2018 was 2.138 billion yuan, and its operating profit was 1.089 billion yuan. The profit for the period was 931 million yuan, an increase of 43.93% over the same period of 2017.

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Its revenue is mainly from the BPU mining business. In the first half of the year, the sales volume of Yibang International Mining Machinery was 309,000 units, which was doubled compared with 158,800 units in the same period last year. Mining machine revenue was 2.115 billion yuan, accounting for 98.9%, compared with 202 million yuan in the same period last year, accounting for 85.1%, while its telecommunications business revenue ratio fell from 11.3% to 0.7%, and Yibang International fully transformed into A mining machine manufacturer.

As for the financial situation as of June 2018, the performance of Yibang International is very bright, but its undisclosed financial situation in the third quarter of 2018 is not good. In the “significant adverse changes” section of the prospectus, Billion International honestly stated that the average monthly sales orders of the mining machine decreased significantly in the third quarter. “In the three months ended September 30, 2018, our revenue and gross profit decreased significantly from the first three months ended June 30, 2018.” The specific reason is that the industry entered the bear market and was shown at 2018. In the second half of the year, bitcoin prices fell sharply from $8,000 to $4,000.

Constant winds

On July 18, 2018, Yindou.com, the Internet financial platform, announced that due to the loss of the company’s actual controller, Li Yonggang, the funds could not be redeemed, and Yindou.com will cease operations. The company's official website shows that the cumulative transaction volume of Yindou.com exceeded 10.6 billion yuan. As of June 30, 2018, the platform still had a loan balance of about 4.4 billion yuan, and more than 20,000 borrowers were waiting to be received.

Some investors who suffered losses collected materials and found that a large amount of funds from Yindou.com flowed into “Zhejiang Yibang Communication Technology Co., Ltd.” (hereinafter referred to as “Yibang Communication”), and several of them were transferred through private accounts. . Billion State Communications is actually the mainstay of Yibang International. According to the prospectus, from 2015 to 2017, Yibang International achieved revenues of RMB 92 million, RMB 120 million and RMB 978 million respectively, of which 2017 revenue surged by 878%. The victim suspected that the surge in income is likely to be caused by the inflow of funds from Yindou. Ibn International is suspected of inflating sales revenue.

In this regard, Yibang International denied it and interpreted it as “benefiting the rapid development of bitcoin transactions”. This is not entirely unfounded. From the industry data in the same period, the other two major mining giants, Bit Continental and Jianan Zhizhi, also achieved substantial revenue growth in 2017, and the growth rate of Bitland was as high as 80.72%.

In addition, the victim pointed out that between December 2017 and February 2018, Cui Hongwei, the wife of Li Yonggang, the real controller of Yindou.com, transferred RMB 525 million to Yibang International. In the period from March to April 2018, Yibang International transferred 380 million yuan to Cui Hongwei, and the remaining 145 million yuan of funds went unclear. After that, in the shareholding change record of Yibang International parent company “Hangzhou Yibang Hongfa Technology Co., Ltd.”, the name of Yindouwang Finance Zhu Xiaolin appeared, and there is reason to suspect that the relationship between Yibang International and Yindou.com is not simple. .

In January of this year, Yindouwang suspects Li Yonggang and Wang Pengcheng were suspected of raising funds for fraud and the suspects Dai Yu, Guo Xu, Guo Xiaoxi, Jiao Wei and Zhao Yan were suspected of illegally absorbing public deposits. The first branch of the People's Procuratorate reviewed and prosecuted.

The “debt collection” is not the only trouble for Yibang International . Since the second half of last year, the company has been involved in litigation of quality problems. A number of mining machine consumers took Yibang International to court and demanded huge compensation. According to the prospectus, in December 2017, Yibang International sold a 13 million yuan mining machine to a customer. However, due to the inconsistent delivery time, product performance and product specifications, the company was sued by the customer for a litigation amount of 53.9 million yuan.

Debt rights protection and litigation disputes have undoubtedly created a lot of gloom for the road to the listing of Yibang International, which has led to the stranding of IPO to some extent.

What is the concern of the Hong Kong Stock Exchange?

The failure of the listing of Yibang International was partly due to its own collection, including the debt collection and protection rights and litigation disputes mentioned above. However, in view of the fact that Hong Kong's IPOs have been rejected by the three largest miners in China (Bituan, Jianan, and Yibang International), specifically, on November 14, 2018, Jianan Zhizhi's Hong Kong IPO application was submitted. After 6 months, the IPO application of Bitcoin expired on March 26, 2019. I want to see all the considerations of the Hong Kong Stock Exchange. Li Xiaojia, the president of the Hong Kong Stock Exchange, said that the three cryptocurrency mining machine manufacturers could not meet the listing. Adaptability."

So what is market adaptability? Li Xiaojia explained in an interview with the media:

"For IPO, the core principle of HKEx is market adaptability. Is the business model proposed by listed companies to investors suitable for listing? For example, in the past, they have earned billions of dollars through A business, but suddenly said that they will do B in the future. Business, but there is no performance. Or B's business model is better, then I feel that the A business model that you brought to the market is not sustainable. There is no supervision before, then the supervision is started, then Can you still do this business, can you make this money?"

Obviously, Li Xiaojia said that the A business is a mining machine business and the B business is an AI business . This passage tells the embarrassment of the mining giants. Before mid-2018, the financial statements of the three major mining giants, Bitian, Jianan, and Yibang International, were very beautiful.

However, with the arrival of the bear market and the strengthening of supervision, the mines and businesses with the strongest gold absorption have experienced a serious decline in performance. Therefore, the mining giants have transformed AI chips, but in the field of artificial intelligence chips, there are already a large number of giants in the industry occupying a favorable position. As a latecomer, the mining giants can still get a piece of the pie.

At the macro level, since the second half of last year, the mining industry's enthusiasm has gradually receded, cryptocurrency prices have plummeted, miners' profits have gradually narrowed, and mining machine manufacturers' sales have also faced a tense situation. In order to avoid risks, many investment institutions have publicly stated that they will not participate in relevant IPOs. From this point of view, the consideration of the Hong Kong Stock Exchange is also reasonable, and the road to listing in the future is also a lot of resistance.