Internet of Things. Our daily lives have never been easier thanks to the invention of super-cheap and micro-sized processors combined with easily accessible wireless networks that coined the term Internet of Things (IoT). Baby monitors, robot vacuums, smart watches, smart security cameras to name a few, all can be controlled with just one tap on our smartphones.
While companies have been striving with innovation to reap more profits from IoT applications in everyday items, Aussie tech company X2M Connect (ASX: X2M) prefers to catch a bigger fish such as government and enterprise customers who are enticed by the theme of cost and time efficiency through IoT application in public infrastructure. This time, they have successfully done it in South Korea, securing new projects valued at approximately $3.3 million combined.
The biggest portion of the project value came from The Korea Water Resources Corporation (K Water), in which X2M has secured almost half of K Water projects. This time, the Jeonju branch extended its contract for remote water monitoring after first signing with X2M in November 2021 to service around 20,000 households. The contract extension is worth approximately $575k, bringing the total contract value to approximately $3.1m. Of this extension contract, $40k will be allocated for SaaS based monitoring services to around 25,000 households for 12 months.
The Jeonju area itself still has approximately 205,000 households remaining on old technology which provides X2M opportunities for further works and development projects in the area.
The Company has also received annual renewal of Software as a Service (SaaS) and maintenance contracts from Dangjin, Gimje and Okcheon totaling approximately $100k across 13,000 households. These contracts follow X2M’s successful installation of hardware and monitoring services in these municipalities. Similarly, the City of Bucheon has signed a contract for approximately $100k for X2M’s SaaS and maintenance services for 12 months across 25,000 households.
Lastly, the Gochang City Council has contracted X2M to migrate its cloud-based services to a set of dedicated on premise servers. X2M has now installed on premise server infrastructure in 17 municipalities dedicated to operating the X2M platform. The installations signify incumbency of ongoing X2M-Gochang partnership operations with plans for further deployments.
X2M has also been awarded the Excellent Product Certification in South Korea effective from 16 March 2023. This allows X2M to receive larger value contracts without the local government customer having to perform a tender process and provides an opportunity to increase prices on certain products. The certification was achieved after an extended process and forms an additional accreditation as part of the South Korean Government Public Procurement System portal (PPS) which is an online ordering system for local governments.
X2M CEO Mohan Jesudason said: “The South Korea business continues to excel in the execution of our land and expand strategy as customers place repeat orders for our products. In addition, securing the Excellent Product Certification is expected to further assist our sales efforts in this market.”
X2M delivers productivity improvements, cost savings and improved public safety to enterprise and government clients in the utilities sector through its proprietary technology that allows devices such as water, gas and electricity meters and other utility sensors to be accessible on the internet via smart devices, as well as facilitating data exchange and the remote control of these devices. X2M generates revenue from the sale of hardware and monthly subscription fees under Software as a Service arrangements. The Company now has more than 370,000 devices connected to its IoT platform and distributed intelligence solution, providing real-time information and control to a steadily increasing customer base in the Asia Pacific region operating over multiple radio technologies.
Though it has operating subsidiaries already operating in Asia Pacific such as Japan, Taiwan and China, South Korea remains one of X2M’s important hubs. Other than having built its rapport as a key partner for government agencies and enterprises, X2M earns its place as South Korea itself is in the process of building a tech hub in the city of Anyang, with the vision that one day it will be South Korea’s Silicon Valley. Though it won’t be completed anytime soon, the smart city development will open more doors for X2M to apply its cloud-based monitoring technology for water, gas, and electricity should it succeed.
In the December half of FY23, X2M acquired $9m revenue which was an improvement of 96% on previous corresponding period (pcp). It incurred an EBITDA negative of $2.1m and net loss after tax of $2.9m, though these figures are 30% and 55% improvements on pcp, respectively. The Company is looking after 361,345 connected devices during the half year which is up 100% on pcp, and currently has 58 enterprise/government customers which is up 38% on pcp.
Clara is a Business Reporter for The Sentiment.
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