Page 36 - Forbes - Asia (September 2018)

FORBES ASIA
BITMAIN’S MAIN MAN
Crypto Boss
The mining billionaire no one has heard of.
BY JASMINE TENG
ith rumors, controversy and news buzz-
ing about its upcoming IPO, Chinese
cryptocurrency-mining chip irm Bit-
main has been thrust into the spotlight
Win recent months. Jihan Wu, Bitmain’s
cofounder and co-CEO, has gotten most of the media cover-
age, largely because of his prominent online social presence.
Meanwhile, Micree Zhan, Bitmain’s other cofounder and
co-CEO, has kept a much lower proile but owns a much
bigger stake in Bitmain than Wu does. Zhan is Bitmain’s
technical mastermind and owns 36.58% of the company,
while Wu’s stake is 20.5%, according to the leaked pre-IPO
investor decks. he Beijing-based company is conident that
it will achieve a $14 billion market capitalization once it
ofers shares to the public, according to its pre-IPO investor
materials. hat would make Zhan’s stake worth at least $5.1
billion and Wu’s stake worth nearly $2.9 billion.
Forbes isn’t so bullish. Ater talking with analysts, we esti-
mate Zhan’s net worth at around $4 billion and Wu’s at close
to $2.3 billion. Forbes valued Bitmain by applying price-to-
sales ratios from comparable companies including Nvidia,
AMD, Qualcomm, Mediatek and Cisco.
It is important to note that there are no directly compa-
rable companies given the unique nature of Bitmain. We
picked these companies because they are also fabless chip
makers, companies that design and sell chips and hardware
but outsource production to other manufacturers, according
to Daiwa Capital Markets analyst Rick Hsu’s guidance. Bit-
main is not purely a semiconductor company; a portion of its
revenue is also derived from its mining pools, BTC.com and
Antpool. And given the novelty and volatility of the current
cryptocurrency industry, the application of these mining
chips is uncertain, according to Mark Li, a senior technology
analyst at Sanford C. Bernstein & Co. Brett Simpson of Arete
34 | FORBES ASIA SEPTEMBER 2018
Research noted that Bitmain should be viewed as an early-
stage version of Cisco, when there was plenty of uncertainty
in the future of IP.
Despite his role as the technical backbone behind
Bitmain, little is known about Zhan, an engineer who de-
veloped the custom application-speciic integrated circuit
(ASIC) chips that have propelled the global growth of the
largest crypto-mining chip producer. Even his LinkedIn pro-
ile is stark, listing only “CEO at Bitmain” and nothing about
prior jobs or education.
Here’s what we know so far. Ater graduating from
Shandong University with a degree in electrical engineering
in 2001, Zhan received a master’s in engineering from the
Chinese Academy of Sciences’ Institute of Microelectron-
ics in 2004. He went to work at Tsinghua University as a
research and development engineer at the Research Institute
of Information Technology.
In 2006 he began a new job as the head of research and
development and manager of the integrated circuit depart-
ment at Chinese company Unitend Technologies, which
specializes in circuit design. At Unitend, Zhan oversaw the
design and development of speciic chips for digital televi-
sion; the shipment volume of these chips exceeded one
million during his time there. He’s also published numerous
papers and patents about circuit chips and helped write the
national standard for universal transport interfaces, a proto-
col used in digital television devices. In 2010 Zhan founded
DivaIP Technologies, a Beijing-based startup to develop TV
set-top boxes. He met Wu by chance when the startup was
canvassing the streets of Beijing, and Zhan sought advice
from Wu regarding funding, Quartz reports. hough Wu was
unable to help in that speciic regard, the two would meet up
again three years later.
he younger of the duo, Wu graduated from Peking