嘉楠科技IPO招股书.pdf

g29g10g14g3g14g3g47g1Ag1Ag16g1Bg17g19g47g49g14g11g4Bg57g50g3g29g32g35g30g3g29g10g14g37g44g45g4Fg48g3g52g49g3g26g52g51g57g48g51g57g56As filed with the Securities and Exchange Commission on October 28, 2019Registration No. 333- g63g63g63 SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549g63g63Form F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933g63g63Canaan Inc.(Exact name of Registrant as specified in its charter)g63g63g63Cayman Islands 3674 Not Applicable(State or Other Jurisdiction ofIncorporation or Organization) (Primary Standard IndustrialClassification Code Number) (I.R.S. EmployerIdentification Number)30/F, Dicara Silver Tower29 Jiefang East RoadJianggan District, Hangzhou, 310016Peoples Republic of China+86-571-8999-5063(Address and Telephone Number of Registrants Principal Executive Offices)g63g63Cogency Global Inc.10 E. 40th Street, 10th FloorNew YorkNY 10016, USA+1-800-221-0102(Name, address and telephone number of agent for service)g63g63Copies to:g63 Chris K.H. Lin, Esq.Simpson Thacher g63 Our years of accumulated engineering experience in applying theoretical research to the mass production of new products, producingin aggregate over 130 million ASICs in 2017, 2018 and the six months ended June 30, 2019;g63 Our ability to achieve a fast time-to-market with our products and our successful early monetization of the ASIC design in blockchainapplications have provided us with an early advantage with respect to both technology and capital reserve to pursue our strategicinitiatives;g63 Our breakthroughs in various technological fields to improve ASIC performance, such as low voltage and high power efficiencyoperations and high computing density, all of which are crucial features for blockchain and AI solutions;g63 Our ownership of most of the intellectual property we employ, and our accumulation of valuable know-how and multiple generationsof proprietary silicon data through our years of ASIC design experience;g63 Our ability to provide a holistic AI solution to our customers, including AI chips, algorithm development and optimization, hardwaremodule, end-product and software services; andg63 Our close and trusted partnerships with leading global suppliers, which have enabled us to achieve high-quality, high yield rate andstable production, with a 100% success rate for all of our seven tape-outs.g63 1g37g44g45g4Fg48g3g52g49g3g26g52g51g57g48g51g57g56The price of Bitcoin experienced a significant drop in 2018 and remained relatively low through the end of the first quarter of 2019, whileexperiencing some recovery starting from the second quarter of 2019. The price of Bitcoin has a direct impact on the market demand for ourBitcoin mining machines, in terms of both the price and the quantity, and we expect this trend to continue. Furthermore, the significant drop in theBitcoin price has had a negative effect on the value of our Bitcoin mining machine inventory. We expect our results of operations to improve alongwith the recovery of the Bitcoin price, but our results of operations generally lag behind the increase in the Bitcoin price. Furthermore, fluctuationin Bitcoin price can have direct impact on the trading price of the ADSs.Our total revenues increased by 106.8% from RMB1,308.1 million in 2017 to RMB2,705.3 million (US$394.1 million) in 2018. During thesame period, our net income decreased by 67.4% from RMB375.8 million to RMB122.4 million (US$17.8 million). Our total revenues decreasedby 85.2% from RMB1,947.1 million in the six months ended June 30, 2018 to RMB288.8 million (US$42.1 million) in the six months ended June30, 2019. Our net income was RMB216.8 million in the six months ended June 30, 2018 and our net loss was RMB330.9 million (US$48.2million) in the six months ended June 30, 2019. Our adjusted net income (loss), a non-GAAP measure defined as net income (loss) excludingshare-based compensation, was RMB471.3 million of adjusted net income in 2017 as compared to RMB141.0 million (US$20.5 million) ofadjusted net income in 2018, and RMB226.2 million of adjusted net income in the six months ended June 30, 2018 as compared to RMB109.9million (US$16.0 million) of adjusted net loss in the six months ended June 30, 2019. See “Summary Consolidated Financial and Operating DataNon-GAAP Financial Measures.”Our Competitive StrengthsWe believe that the following strengths contribute to our success and differentiate us from our competitors:g63 We are a leading provider of supercomputing solutions.g63 We are able to achieve a fast time-to-market.g63 We were the first in the industry to deliver commercial edge computing AI chips on Risc-V architecture and self-developed neural-network accelerator with outstanding performance.g63 Our outstanding production track record and strong supply chain management ensure our product quality and production capability.g63 Our ability to make sustainable investments in AI technology.g63 We have a visionary management team, as well as a talented research and development team.Our Growth StrategiesWe intend to grow our business using the following key strategies:g63 Strengthen our leadership position in supercomputing solutions.g63 Continue to invest in high power efficiency IC design.g63 Continue to introduce new AI products.g63 Enhance our AI platform business model to build on our AI products.g63 Continue to enhance our supply chain management.g63 Continue to expand our overseas operations.g63 2g37g44g45g4Fg48g3g52g49g3g26g52g51g57g48g51g57g56Our ChallengesOur ability to execute our strategies is subject to risks and uncertainties, including:g63 Fluctuation of the Bitcoin price.g63 Acceptance and regulation of Bitcoins and Bitcoin mining.g63 The classification of cryptocurrency mining as an eliminated industry by PRC government authority.g63 The significant revenue contribution from our Bitcoin mining machines.g63 Our ability to succeed in the AI market.g63 Constant technological changes in the industries we operate in.g63 Uncertainties in our research and development activities.g63 Our reliance on limited suppliers.Our History and Corporate StructureWe are a Cayman Islands holding company and conduct our operations in China through our PRC subsidiaries. We first started our businessdeveloping Bitcoin mining machines incorporating ASIC technology in 2013 through Beijing Canaan Creative Information Technology Co., Ltd.,which was subsequently renamed Hangzhou Canaan Creative Information Technology Co., Limited, or Hangzhou Canaan, in September 2015.Empowered by the academic training and technical expertise of our co-founders, we have focused on the design of high performance, repeatedcomputing ICs since our inception. As we further developed, Hangzhou Canaan went through a series of capital injections and became a holdingcompany for our PRC operating subsidiaries.With the growth of our business and in order to facilitate international capital investment in us, we underwent an offshore reorganization inthe first quarter of 2018. In February 2018, Canaan Cayman Holdings Ltd. was incorporated under the laws of the Cayman Islands as an exemptedcompany with limited liability. It was later renamed Canaan Inc. in April 2018. In March 2018, in order to mirror the shareholding structure of thethen shareholders of Hangzhou Canaan, we issued and allotted our ordinary shares at par value to investment holding companies held by the thenshareholders of Hangzhou Canaan. Further, an intermediate holding company, Canaan Creative (HK) Holdings Limited, or Canaan HK, ourwholly-owned subsidiary, was also established in Hong Kong in February 2018. In March 2018, Canaan HK acquired a 100% equity interest inHangzhou Canaan and Canaan Inc. became our ultimate holding company.g63 3