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[Bitmain].zh cn.en Slide 1 [Bitmain].zh cn.en Slide 2 [Bitmain].zh cn.en Slide 3 [Bitmain].zh cn.en Slide 4 [Bitmain].zh cn.en Slide 5 [Bitmain].zh cn.en Slide 6 [Bitmain].zh cn.en Slide 7 [Bitmain].zh cn.en Slide 8 [Bitmain].zh cn.en Slide 9 [Bitmain].zh cn.en Slide 10 [Bitmain].zh cn.en Slide 11 [Bitmain].zh cn.en Slide 12 [Bitmain].zh cn.en Slide 13 [Bitmain].zh cn.en Slide 14 [Bitmain].zh cn.en Slide 15 [Bitmain].zh cn.en Slide 16 [Bitmain].zh cn.en Slide 17 [Bitmain].zh cn.en Slide 18 [Bitmain].zh cn.en Slide 19 [Bitmain].zh cn.en Slide 20 [Bitmain].zh cn.en Slide 21 [Bitmain].zh cn.en Slide 22 [Bitmain].zh cn.en Slide 23 [Bitmain].zh cn.en Slide 24 [Bitmain].zh cn.en Slide 25 [Bitmain].zh cn.en Slide 26 [Bitmain].zh cn.en Slide 27 [Bitmain].zh cn.en Slide 28 [Bitmain].zh cn.en Slide 29 [Bitmain].zh cn.en Slide 30 [Bitmain].zh cn.en Slide 31
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  1. 1. Bit continent Project presentation materials encrypted file
  2. 2. Page Number: 2 Project Summary project name Positioning the company Financial situation Investment program Exit program Continental Technology Co., Ltd. Beijing bit (hereinafter referred to as "bit continent") Bit continent ( Bitmain )was founded in 2013 Late last year, is committed to providing high-speed, low-power computer chips, high-power,Bit continent ( Bitmain )was founded in 2013 Late last year, is committed to providing high-speed, low-power computer chips, high-power,Bit continent ( Bitmain )was founded in 2013 Late last year, is committed to providing high-speed, low-power computer chips, high-power,Bit continent ( Bitmain )was founded in 2013 Late last year, is committed to providing high-speed, low-power computer chips, high-power,Bit continent ( Bitmain )was founded in 2013 Late last year, is committed to providing high-speed, low-power computer chips, high-power, high-density computing servers and large-scale parallel computing software such as supercomputing chip, hardware and software products. Bits mainland products are widely used in digital currency worldwide customer production, mining machine's ant Antminer , Mineral pool BTC.com Aremainland products are widely used in digital currency worldwide customer production, mining machine's ant Antminer , Mineral pool BTC.com Aremainland products are widely used in digital currency worldwide customer production, mining machine's ant Antminer , Mineral pool BTC.com Aremainland products are widely used in digital currency worldwide customer production, mining machine's ant Antminer , Mineral pool BTC.com Aremainland products are widely used in digital currency worldwide customer production, mining machine's ant Antminer , Mineral pool BTC.com Are ranked first in the world, the global mining machinery market share of more than 70%ranked first in the world, the global mining machinery market share of more than 70% Bit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollarsBit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollarsBit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollarsBit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollarsBit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollarsBit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollarsBit continent 2017 Annual revenues of approximately 25 Billion, net profit of about 12.5 One hundred million U.S. dollars After participating in an investment in the form of financing 1 One hundred million U.S. dollarsAfter participating in an investment in the form of financing 1 One hundred million U.S. dollarsAfter participating in an investment in the form of financing 1 One hundred million U.S. dollars IPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong ListingIPO Exit: The company expects 2018 year 8 Submitted by the end of IPO material, 2018 The end of the Hong Kong Listing encrypted file Cooperation Agency ABC Capital
  3. 3. Page Number: 3 Deal Structure Bit continent ABC Capital LP1 LP2 LP ...... encrypted file
  4. 4. Page Number: 4 Investment background encrypted file • China is a bit of nature Chip design company The main R & D and manufacturing ASIC chip. With this kind of mining machine to provide chip production of "count force" to support mining andChina is a bit of nature Chip design company The main R & D and manufacturing ASIC chip. With this kind of mining machine to provide chip production of "count force" to support mining andChina is a bit of nature Chip design company The main R & D and manufacturing ASIC chip. With this kind of mining machine to provide chip production of "count force" to support mining andChina is a bit of nature Chip design company The main R & D and manufacturing ASIC chip. With this kind of mining machine to provide chip production of "count force" to support mining andChina is a bit of nature Chip design company The main R & D and manufacturing ASIC chip. With this kind of mining machine to provide chip production of "count force" to support mining and transaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC designtransaction based Bitcoin digital currency. 2017 Bit chip sales in mainland China reached twenty three Billion dollars, second only to Huawei Hass, China has become the second largest IC design company ;company ; • Chip and mining machines are block chain applications in the field of infrastructure , Based on the traditional way of doing business realized sales profits into legal tender mode, ItChip and mining machines are block chain applications in the field of infrastructure , Based on the traditional way of doing business realized sales profits into legal tender mode, ItChip and mining machines are block chain applications in the field of infrastructure , Based on the traditional way of doing business realized sales profits into legal tender mode, It does not involve digital currency trading and settlement and ICO , Compared to digital currency and the exchange itself, bit market volatility and less risk involved mainland policy;does not involve digital currency trading and settlement and ICO , Compared to digital currency and the exchange itself, bit market volatility and less risk involved mainland policy;does not involve digital currency trading and settlement and ICO , Compared to digital currency and the exchange itself, bit market volatility and less risk involved mainland policy; • The company currently mainly in the production of bitcoin mining machine mainly from the sales of the whole market, calculate force, mineral pool capacity and other indicators, bit continent possession Market share of more than 50% , Bitcoin mining machine is the world's absolute leading production company;possession Market share of more than 50% , Bitcoin mining machine is the world's absolute leading production company;possession Market share of more than 50% , Bitcoin mining machine is the world's absolute leading production company;possession Market share of more than 50% , Bitcoin mining machine is the world's absolute leading production company; • The company also for other digital currency (Ethernet Square / dishes special coins / currency of the world, etc.) to produce chips and Minerals, compared to competitors' products and more abundant; • The company is actively strengthening its AI Chip development and manufacture of integrated areas (especially the depth of machine learning), The current team of investmentThe company is actively strengthening its AI Chip development and manufacture of integrated areas (especially the depth of machine learning), The current team of investmentThe company is actively strengthening its AI Chip development and manufacture of integrated areas (especially the depth of machine learning), The current team of investmentThe company is actively strengthening its AI Chip development and manufacture of integrated areas (especially the depth of machine learning), The current team of investment research, technology development capabilities and funds accumulated through Bitcoin mining machine business allows the company in AI The highly competitive field of chip;research, technology development capabilities and funds accumulated through Bitcoin mining machine business allows the company in AI The highly competitive field of chip;research, technology development capabilities and funds accumulated through Bitcoin mining machine business allows the company in AI The highly competitive field of chip; • 2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ;2017 The company achieved 25.3 Billion US dollars revenue , 12.5 Billion dollars net profit ; • Company 3 After the valuation is expected to 300-400 One hundred million U.S. dollars ;Company 3 After the valuation is expected to 300-400 One hundred million U.S. dollars ;Company 3 After the valuation is expected to 300-400 One hundred million U.S. dollars ;Company 3 After the valuation is expected to 300-400 One hundred million U.S. dollars ;Company 3 After the valuation is expected to 300-400 One hundred million U.S. dollars ;Company 3 After the valuation is expected to 300-400 One hundred million U.S. dollars ; • Market exit path has opened up: the recent second largest Bitcoin mining machine manufacturers Jianan Yun Chi (market share of about 20 %) Filed a prospectus on the HKEx, will soonMarket exit path has opened up: the recent second largest Bitcoin mining machine manufacturers Jianan Yun Chi (market share of about 20 %) Filed a prospectus on the HKEx, will soonMarket exit path has opened up: the recent second largest Bitcoin mining machine manufacturers Jianan Yun Chi (market share of about 20 %) Filed a prospectus on the HKEx, will soon complete the listing.
  5. 5. Page Number: 5 Investment project won the famous investment institutions (section) encrypted file Sequoia Capital China IDG Capital US hedge fund Coatue Management Singapore government investment fund EDBI
  6. 6. Page Number: 6 Deeply involved in Bitcoin currency and encryption industry encrypted file Encryption money market development time is shorter, smaller relative size, but extremely rapid development momentum. As the world's Bitcoin mining machine production of absolute leading companies, China's second largest IC design company, Continental bit deeply involved in the industry, and has a high-quality project influence and capacity of sustainable development through investment in the industry, and actively build eco-industry chain block system. With the development of the industry, we believe that the mainland will be developed into a bit comparable to Internet giant Tencent Technology world-class enterprise. Amazon Encrypted digital bit credits currency Apple dollar gold Physical currency Stock market All assets $ 112B $ 283B Source: cia.gov, forbes.com, Coinmarketcap.com, federalreserve.gov as of 13/6/2018 $ 1.5T $ 824B $ 945B $ 8.2T $ 31T $ 66.8T $ 83.6T
  7. 7. Page Number: 7 Deeply involved in Bitcoin currency and encryption industry (cont.) encrypted file 1 IC Design,IC Design, manufacturing and mining machines Sales Founded mines Mine operators Pool transaction • P2P • OTC • Conversion bit credits Application way • electronic wallet • Converted into other currencies encryption Hardware Supply Mining Transactions and Use The main participants Bitmain 嘉楠耘 Chile The main participants Bitmain Bitfury The main participants BTC.com Ants pool pond The main participants CoinBase Bitfinex OKCoin Fire currency The main participants Blockchain Ratio mission Bit and the mainland as part of the major players in the industry value chain, mainly engaged in IC design and manufacture of mining machines, mine management pool.
  8. 8. Page Number: 8 Actively create block chain industry ecosystem encrypted file Digital currency payment company Digital currency information, market monitoring, transaction services platform Robot / AI Bitcoin mining ore pond and cloud Block chain technology research institute Trusted data management solutions and services provider Social (user bits earn credits through social tools) Digital Asset wallet Security monitoring node Bits mainland influential and high-quality project sustainable development capacity through investment in the industry, and actively create block chain industry ecosystem.
  9. 9. Page Number: 9 Company History year 2013 The company set up By the end of 2013 The first product launched 2015 Maintain market leadership 2016 The scale of sustained growth 2017 Artificial Intelligence products available 2013 year 10 May, based on a deep understanding of2013 year 10 May, based on a deep understanding of2013 year 10 May, based on a deep understanding of2013 year 10 May, based on a deep understanding of the block chain and a dedicated chip technology, co-founder of the company in Beijing to set up mainland bits. 2013 Based on the company by the end of the first generation2013 Based on the company by the end of the first generation ASIC Chip launch Hash Server computing, andASIC Chip launch Hash Server computing, andASIC Chip launch Hash Server computing, andASIC Chip launch Hash Server computing, and quickly occupied the market. Our products namely long-term performance, lowest power consumption, the global market share of the first. At the same time, the company launched AI AI chipAt the same time, the company launched AI AI chipAt the same time, the company launched AI AI chip project. Total number of employees, the number of intellectual property, assets, profitability continued to grow, and the introduction of a new generation 16nm chip.introduction of a new generation 16nm chip.introduction of a new generation 16nm chip. The first generation, second generation chip cast piece, the test is successful; Third Generation AI Chip successfully developed, will soonsuccessful; Third Generation AI Chip successfully developed, will soonsuccessful; Third Generation AI Chip successfully developed, will soon flow sheet. Based on the company independent chip launch AI Applicationflow sheet. Based on the company independent chip launch AI Applicationflow sheet. Based on the company independent chip launch AI Application solutions. The introduction of world-renowned capital. 2017 year 11 Month, officially released AI Accelerator and server, the2017 year 11 Month, officially released AI Accelerator and server, the2017 year 11 Month, officially released AI Accelerator and server, the2017 year 11 Month, officially released AI Accelerator and server, the2017 year 11 Month, officially released AI Accelerator and server, the2017 year 11 Month, officially released AI Accelerator and server, the official website of the official count abundance of global sales. encrypted file
  10. 10. Page Number: 10 Business Analysis encrypted file
  11. 11. Page Number: 11 Business Progress • Super Computer Products - Continue to maintain a monopoly positionSuper Computer Products - Continue to maintain a monopoly position 16nm Chip continue to optimize the procedure, lifting force density count, reduce power consumption;16nm Chip continue to optimize the procedure, lifting force density count, reduce power consumption; 12nm Chip has been taped, 2017 End of production; to12nm Chip has been taped, 2017 End of production; to12nm Chip has been taped, 2017 End of production; to12nm Chip has been taped, 2017 End of production; to further enhance the process 7nm .further enhance the process 7nm .further enhance the process 7nm . • AI product - Accelerated computing world leaderAI product - Accelerated computing world leaderAI product - Accelerated computing world leaderAI product - Accelerated computing world leader In the successful launch of the first generation AI chip- BM1680 Based on the continued optimization of chipIn the successful launch of the first generation AI chip- BM1680 Based on the continued optimization of chipIn the successful launch of the first generation AI chip- BM1680 Based on the continued optimization of chipIn the successful launch of the first generation AI chip- BM1680 Based on the continued optimization of chipIn the successful launch of the first generation AI chip- BM1680 Based on the continued optimization of chip technology, computing the tensor accelerate the segments processor chip catch up with world advanced level. BM1682technology, computing the tensor accelerate the segments processor chip catch up with world advanced level. BM1682 The second generation of chip flow sheet. • AI Applications and robotAI Applications and robot 2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to2017 year 11 month 8 Day, AI board to accelerate the "count Feng" and intelligent robots. " AlienBot "Bring to market. encrypted file
  12. 12. Page Number: 12 Company core strengths •To meet the industry's explosive growth: after 2015, known as the fourth industrial revolution "block chain" and "artificial intelligence" technology into the explosive growth phase. •New hardware market ahead of the layout: new computer technology hardware support put forward higher requirements - low latency, low power consumption, high power count, highly customized ASIC chip is an inevitable trend. The explosive growth of the industry to promote A clear market positioning Excellent chip and software research and development capabilities •Block chain operator force provider: In the case of national enterprises flocked development block chain technology company to avoid the edge, choose to provide support for the force calculation block chain industry has become dominate the field in the field of segments. •Artificial Intelligence industry in the base layer ASIC chip expert: artificial intelligence, industry, technology base layer and application layer to provide support. The chip is a key factor supporting AI technology development. The ASIC chip represents the future of AI chips. •Technology leadership: In early 2016, with volume production 16nm chip while Huawei. As China's first ASIC chip, leading to a leap from a dedicated GPU chip. •Experienced: from 2013 to 2014 55nm 28nm, 16nm and then to 2016, there has been mass production 10nm, 3 years accumulated a wealth of development experience. encrypted file
  13. 13. Page Number: 13 The company core strengths (cont.) •In the case where the same chip manufacturing process by raising the level of hardware and software, optimized architecture, greatly improving the performance of the chip. Zhuo hardware and software optimization capabilities Improve personnel structure Adequate funding and improve industrial layout •Block chain around two major business lines and artificial intelligence, has formed a set of chip development, platform architecture, algorithm development, hardware and software, nearly 500 outstanding research team. •All backbone of scientific research institutions from 985,211 or Microsoft, Cisco, Google, Huawei and other world-class technology companies, has a good educational background and rich experience in development. •Other segments focus on investment through layout block chain and AI in chip development and manufacturing of equipment at the same time, the company's strategic investments in a number of chain blocks and artificial intelligence start-ups, improve the industrial layout. •Sufficient funds to solve the worries of technology development, respectively, in the second half of 2017 and the first half of 2017 completed a Series A and B rounds of financing, the introduction of a number of well-known international investment institutions, expanding the company's financial strength. BM1382 BM1384 BM1385 Process, nm 28nm 28nm 28nm Hash rate, GH / s 14 18 30 Efficiency, J / GH 0.494 0.386 0.216 encrypted file
  14. 14. Page Number: 14 Other advantages of the company •Through independent research and development, purchasing, authorization, access to business development necessary intellectual property and avoid potential risks; •The formation of a large number of independent research and development of intellectual property has become one of the barriers companies to maintain competitive advantage. Respect for intellectual property rights Industry access restrictions Operational Compliance tax law •The company main business focus and core competitiveness of the industry, the company away from difficult to control, high risk industry; •ICO company does not initiate any activity. •Respect and comply with national laws, the company's daily operations and management of legal compliance; •Professional legal and financial team, well-known outside legal and financial advisors; •The world's leading investment capital risk management recommendations; •Timely report and pay taxes, tax risk zero tolerance; •Reasonable pricing intra-group transactions, issued by Deloitte global tax transfer pricing report encrypted file
  15. 15. Page Number: 15 Company Financial Overview - Income encrypted file Operating income comparison (in thousands of dollars) Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus 2016 2017 Bitmain - 810.39% Canaan 562.22% 314.12% Revenue growth comparison * Jianan Yun Chi revenue according to Bureau of Statistics released the year the average exchange rate of RMB against the US dollar are translated, in 2016 the US dollar against the RMB exchange rate is 6.64, 6.75 2017 Operating income (millions of dollars)
  16. 16. Page Number: 16 Company Financial Overview - revenue structure encrypted file • 2017 Continental bit more than 90% of the sales revenue from the sale of digital currency mining machine, in which the basic domestic and international sales each half; • From the gross margin perspective, digital currency mining machine overall gross margin of around 60%, including sales to domestic customers gross margin of approximately 55%, gross margin sales to foreign customers of around 65%; • The first quarter of 2018 mainly due to foreign customers accounted for the surge is the Chinese New Year holiday; • Self-mining business in 2017 less than 10% of total revenue, benefit from digital currency prices, gross margin was 76%. Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus 2016 2017 2018Q1 2016 2017 2018Q1 2016 2017 2018Q1 Sales revenue Sales revenue% Gross margin Digital currency mining machine 222,230.00Digital currency mining machine 222,230.00 2,329,038.00 1,829,774.00 80.0% 92.1% 96.5% 57.9% 58.9% 61.9% Domestic sales 136,571.00 1,238,923.00 643,840.00 49.2% 49.0% 33.9% 55.7% 54.8% 55.7% Overseas sales 85,659.00 1,090,115.00 1,185,933.00 30.8% 43.1% 62.5% 61.5% 63.4% 66.2% Self-mining 51,022.00 178,711.00 63,378.00 18.4% 7.1% 3.3% 49.7% 76.1% 60.0% Operators force nest 2,564.00 -8,591.00 -10,347.00 0.9% -0.3% -0.5% N / A N / A N / A Mineral pool management 194.00 16,711.00 10,053.00 0.1% 0.7% 0.5% 18.3% 44.8% 58.2% other 1,820.00 13,477.00 3,587.00 0.7% 0.5% 0.2% N / A N / A N / A total 277,830.00 2,529,346.00 1,896,444.00 100.0% 100.0% 100.0% 57.1% 57.9% 60.7% 1, sales by product line
  17. 17. Page Number: 17 Company Financial Overview - revenue structure encrypted file 2, composed of operating income by business type (other income includes ore mining machine and pool management-related income, etc.) 3, by product type mining machine revenue constituted 2016 annual revenue: 280 million US dollars 2017 annual revenue: 2.53 billion US dollars 2018 first quarter total revenue: 1.9 billion US dollars 2016 annual revenue: 220 million US dollars 2017 annual revenue: 2.33 billion US dollars 2018 first quarter total revenue: 1.83 billion US dollars Source: Management information and data, KPMG analysis
  18. 18. Page Number: 18 Company Financial Overview - Minerals sales revenue and cost encrypted file Source: Management information and data, KPMG analysis income Income share unit price Gross margin 2016 2017 2018Q1 2016 2017 2018Q1 2016 2017 2018Q1 2016 2017 2018Q1 S9 98, 132 1,347,380 1,230,174 44.2% 57.9% 67.2% 1,429 1,257 1,719 58.8% 55.7% 69.9% S7 106,334 3 - 47.8% 0.0% 0.0% 593 212 - 58.6% L3 920 421,215 344,794 0.4% 18.1% 18.8% 1,315 1,685 1,404 21.2% 71.3% 44.6% D3 - 411,555 381 0.0% 17.7% 0.0% - 1,581 179 - 76.2% -108.8% T9 - 35,861 84,173 0.0% 1.5% 4.6% - 1,031 991 - 19.9% 49.7% A3 - - 76,064 0.0% 0.0% 4.2% - - 1,431 - - 78.3% V9 - - 6,755 0.0% 0.0% 0.4% - - 145 - - -34.5% Other Models 3,350 8,774 9,432 1.5% 0.4% 0.5% - - - - - - APM power 13,494 104,249 78,002 6.1% 4.5% 4.3% 108 110 95 - - - Total 222, 230 2,329,037 1,829,775 100.0% 100.0% 100.0% 57.9% 58.9% 61.9% • 2016 bits mainland main income comes from mining bitcoin mining machine S7 and S9, to the mining machine company in 2017 to expand its business, bitcoin mining machine S9 accounted for 58% of revenue, and mining litecoin Monroe currency account for mine 18% of machine income; • Bit mining machine coin credits monovalent basic price fluctuations over the bit; • Ore mining machine with machine Price gross margins rose in 2018, in the first quarter of 2018 reached 70%.
  19. 19. Page Number: 19 Company Financial Overview - Minerals sales revenue and cost encrypted file Source: Management information and data, KPMG analysis 79.9% 8.2% 5.2% 6.2% 0.3% 0.3% BB Board chip operation panel board assembly costs labor costs packing 85.2% 7.8% 0.3% 1.7% 4.6% 0.2% 0.2% BB Board chip operation panel board assembly costs labor costs packing • Cost mining machine focused on chip, bit continent Minerals in sales revenue in the first two models of L3 + S9 and sold, for example, S9 models, about 80% of the total cost of the chip, model L3 + about 85% of the cost of the chip. S9 cost structure L3 + Cost Component
  20. 20. Page Number: 20 Company Financial Overview - Minerals sales revenue and cost (Competitive Analysis) $ 222 $ 2,329 $ 47 $ 194 2016 year2016 year 2017 year2017 year Bitmain Canoon ¥ 9,488 ¥ 8,485 ¥ 4,095 ¥ 4,402 2016 year2016 year 2017 year2017 year Bitmain S9 Canoon A7 Main mining machine price (RMB) Minerals sales (millions of dollars) Main gross margin mining machine 58.80% 55.70% 36.90% 46.50% 2016 year2016 year 2017 year2017 year Bitmain S9 Canoon A7 Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus
  21. 21. Page Number: 21 Company Financial Overview - digital currency mining business sales revenue and cost encrypted file Source: Management information and data, KPMG analysis Changes in the cost structure of large main reasons: • Benefit from cheaper electricity in remote mountainous areas; • The newly developed mining machine S9 lower power consumption. Digital currency mining revenue 2016 annual2016 annual 2017 annual2017 annual US $ '000 % gross profit % gross profit S9 8,688 17.0% 42.6% 137,915 77.2% 75.0% L3 + - 0.0% 0.0% 20,910 11.7% 82.8% T9 + - 0.0% 0.0% 3,352 1.9% 61.5% S7 37,858 74.2% 51.3% 1,983 1.1% 73.4% S4 + 26 0.1% 28.5% - 0.0% 0.0% S5 2,249 4.4% 23.6% - 0.0% 0.0% S5 + 280 0.5% -42.2% - 0.0% 0.0% T9 + 9 0.0% 98.2% 6,025 3.4% 59.1% L3 294 0.6% 66.1% 273 0.2% 84.3% G1 - 0.0% 0.0% 222 0.1% 66.0% G2 - 0.0% 0.0% 90 0.1% -28.1% other 1,619 3.2% 100.0% 7,942 4.4% 0.1% total 51,023total 51,023 100.0% 49.7% 178,711 100.0% 76.1% The number of digital currency mining machine 2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day2016 year 12 month 31 day 2017 year 12 month 31 day 2018 year 3 month 31 day Fujian Zhan Hua - 43,700 66,306 Bit Mainland (Beijing) 12,960 27,309 24,490 Bit Mainland (Hong Kong) 1,126 1,021 454 total 14,086 72,030 91,250 Digital currency mining costs 2016 year2016 year 2017 year2017 year 2018 year2018 year US $ '000 Money % Money % Money % Electricity 15,483 60.3% 12,716 29.8% 10,023 39.5% depreciation 10,194 39.7% 29,950 70.2% 15,331 60.5% total 25,678 100% 42,667 100% 25,353 100%
  22. 22. Page Number: 22 Company Financial Overview - Income Statement encrypted file Operating income (millions of dollars) Gross profit and gross margin ($ million) EBITDA And its profit margin (million USEBITDA And its profit margin (million US yuan) Net profit and net profit margin (US $ million) Source: Management information and data, KPMG analysis
  23. 23. Page Number: 23 Company Financial Overview - Profitability encrypted file Gross margin Net profit margin Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus • 2017 gross profit was $ 1.45 billion; • Company gross margin increased year by year, in January 2018 reached nearly 60%; • Compared Jianan Yun-chi, a higher gross margin; • 2017 net profit of $ 1.25 billion in the first quarter of 2018, net income was $ 1.14 billion; • The first quarter of 2018 mainly due to higher net interest rate margin analysis: the company will be part of the encrypted digital currency for purchases and investments profitable.
  24. 24. Page Number: 24 Company Financial Overview - Profitability encrypted file ROE R & D expenses (US $ million) Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus • The company in 2017 ROE of 86%; • An A share, higher than the 2017 annual ROE of 85% only seven companies. • 2017 R & D expenses were $ 62 million; • Compared to Jianan Yun-chi, a bit more attention to the development of the continent.
  25. 25. Page Number: 25 Company Financial Highlights - Balance Sheet encrypted file Total assets (millions of dollars) Net assets (millions of dollars) Source: Management information and data, KPMG analysis
  26. 26. Page Number: 26 Company Financial Overview - Capital Structure encrypted file Assets and liabilities Company assets and liabilities rate fluctuations in 2017, mainly due to the industry sales generally take the form of pre-charge customers the full amount by the end of 2017, the outbreak of the industry, the formation of more prepaid accounts, resulting in a rapid increase in corporate debt, asset-liability ratio to rise. • The company's current assets to total assets of more than 95%, reflecting the side of the continent is a bit asset-light company, in terms of digital currency mining machine only engaged in the design, development and marketing of chips; outsource production; • The company no bank loans, current liabilities accounted for more than 95% of the company's total liabilities. 2017 assets and liabilities structure Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus
  27. 27. Page Number: 27 Company Financial Overview - operational capabilities encrypted file • Companies charge customers in advance payments before the recognition of revenue, it accounts receivable turnover days is negative; • Due to industry practice, the company is required to pay in advance 50% of the purchase price to outsource manufacturers (TSMC), while factory production cycle is about three months, so the company's days payable outstanding turnover is negative; • Compared Jianan Geng Zhi, the company operating ability, the main reason may be a bit continent and outsourcing manufacturer (TSMC) contract is to pay 50% of the purchase price in advance, and Jia Nangeng wisdom required to pay the full amount, and further demonstrates the use of its mainland bit the advantages of scale and head for the company to reduce operating costs. Operating capacity 2016 2017 2018Q1 Inventory turnover days 96 126 115 Accounts receivable turnover days (including prepayments) --14 --73 --28 Payable turnover (including advances from customers) days receivable --106 - 92 - 35 Net operating cycle 188 144 122 Jianan Yun Chi Net operating cycle 214 222 Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus inventory turnover days = average inventory * 365 days / Cost of sales Accounts receivable turnover days = (average accounts receivable - Average deposits received) * 365 days / days payable outstanding sales turnover = (average accounts payable - average prepayments) * 365 days / Cost of Sales Net Sales cycle = inventory turnover days + accounts receivable turnover days - accounts payable turnover days
  28. 28. Page Number: 28 Company Financial Overview - cash flow encrypted file Operating activities generated net cash flow (One million U.S. dollars) Bitmain Canaan Net cash flow from operating activities / net profit 1.03 0.25 Net cash flow from operating activities accounted for 4.28 0.59 • Healthy cash flow, net profit would have the ability to convert cash flows; • And cash flow from operating activities was 452% of the company's total cash change, indicating that the cash flow generated from operating activities partially support the company's investment activities; • Compared Jianan Geng Zhi, the company's ability to generate cash flow from operating activities is very strong. Source: Management information and data, KPMG analysis, Jianan Yun Chi prospectus
  29. 29. Page Number: 29 Company Financial Overview - Other matters (digital currency) encrypted file • At present, the company's digital currency at cost (market price at the time of receipt of digital currency) recorded in other current assets (Other current asset), and its price fluctuations are not included in the report; • Accounting way digital currency may be there are many, such as included in financial assets (price changes in the income statement or other comprehensive income) is recognized at cost of intangible assets, impairment test by the end of each year, or at fair value the intangible asset; • Now there is no uniform accounting standards accounting way digital currency; Digital quantity of money Average cost (US $) Total (thousands of dollars) 31-DEC-16 31-DEC-17 31-MAR-18 31-DEC-16 31-DEC-17 31-MAR-18 31-DEC-16 31-DEC-17 31-MAR-18 BCC 841,866 1,021,316 800 869 673,804 887,488 BTC 71,560 36,877 22,082 965 5,860 6,712 69,048 216,098 148,207 LTC 554,821 925,084 930, 932 4 53 55 2,358 48,981 51,101 DASH 312,066 312,424 330 331 102,998 103,275 ETH 747 1,097 757 690 565 757 Others -15,161 -35,351 19, 505 Total 626,381 2,116,640 2,287,851 969 7,800 8,657 56,245 1,007,095 1,210,333 • If the digital currency prices continue to fall, impairment may be required, thus affecting the income statement.
  30. 30. Page Number: 30 Company Financial Overview - Valuation and return encrypted file • The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times;The current valuation 140 Billion, according to 2017 Net profit 12.5 One hundred million US dollars is calculated, P / E for 11 Times; • A Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRRA Shares of high-end manufacturing average price-earnings ( P / E ) 35 Times, press 2017 Net profit 12.5 Billion dollars, valued at approximately 437 Billion dollars, if the investment period of three years, IRR Expected to be 46% ;Expected to be 46% ;Expected to be 46% ; • High-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, ifHigh-end manufacturing industry leaders (such as Hikvision) earnings ( P / E ) 50 Around times, press 2017 Net profit 12.5 Billion dollars, valued at 625 Billion dollars, if According to a three-year investment period, IRR Expected to be 65% .According to a three-year investment period, IRR Expected to be 65% .According to a three-year investment period, IRR Expected to be 65% .According to a three-year investment period, IRR Expected to be 65% .According to a three-year investment period, IRR Expected to be 65% . P / E 30 P / E 35 P / E 45 P / E 50 P / E 80 2017 Net profit2017 Net profit estimate 375 437.5 562.5 625 1,000 IRR 39% 46% 59% 65% 93% 2018 Valuation profit2018 Valuation profit forecast 562.42 656.16 843.63 937.37 1,499.78 IRR 59% 67% 82% 88% 120% • 2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars2018 Forecast net profit = 2017 Annual income*( 1 + 50% ) * 2017 Year net profit margin = 18.74 One hundred million U.S. dollars • If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.If you press 2018 Forecast net profit 18.74 Billion dollars calculations, the current valuation 140 One hundred million U.S. dollars, P / E for 7.5 Times.
  31. 31. Thank you encrypted file
  • YiHsiuHsu

    Sep. 19, 2018

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