IWOW TECHNOLOGY LIMITED (SGX:NXR)
iWOW Technology - Riding On Iot And Sustainability Megatrends
- iWOW Technology (SGX:NXR) is a one-stop end-to-end wireless IoT technology provider. Services include designing and developing the hardware and software underlying the IoT solution, overseeing the manufacturing of the product, installation, maintenance and operation of the IoT solution.
- Electronic Monitoring System (EMS). iWOW Technology is the sole provider of EMS solutions as-a-service to various government agencies since 2014. The EMS solution is an ankle tag which monitors ex-offenders and accused persons while they are out on bail or have been released under a remission order.
- Alarm Alert System (AAS). Developed for statutory boards, the AAS is a wireless emergency distress system which caters to the elderly. Residents in distress can press the red emergency button and alerts are sent to a 24/7 hotline service that provides health and social support to elderly individuals.
- Smart Metering. Smart Metering provides organisations/individuals with insights on energy and water consumption data through remote monitoring of utilities. Through the data, users can manage their electricity consumption and reduce cost and resources.
- Trace Tokens. iWOW Technology was awarded a non-exclusive contract by a statutory board to develop contact tracing solutions. As at the last practicable date, there were no new tenders for the tokens and iWOW Technology is one of the two companies which was awarded the contract. The company has also expanded its offerings to develop similar contact tracing solutions for the global market, termed trace tokens.
Looking beyond COVID-19 and TraceTogether tokens: What now?
- The average remaining tenor of the TraceTogether tokens is 1 year, suggesting that the outstanding S$11.3mil order book value will be recognised mostly within FY2023. Meanwhile, the average remaining tenor of EMS is 7 years, which will approximately translate to $S7.8mil revenue yearly.
- Moving forward and into an endemic era, iWOW Technology is cutting down its reliance on TraceTogether tokens, and is capitalising on its capabilities as an IoT business, to be constantly innovating and diversifying to build sustainable pillars of growth.
- Additionally, it is also important to note that the TraceTogether tokens commanded a lower profit margin compared to the other segments, hence overall bottom-line did not grow in tandem with the surge in revenue. A lower sales mix from the tokens will likely improve overall net margin moving forward.
Growth in sustainability.
- In line with Singapore’s Green Plan 2030, a nationwide movement to advance Singapore’s agenda on sustainable development, government agencies and businesses are likely to maintain or even enhance the usage of Smart Metering solutions.
- iWOW Technology’s devices are differentiated from those on the market as the company’s focus is not on providing smart meters, but rather making ordinary meters smart. Communication devices are connected to ordinary meters, converting them to smart devices without the need for huge capital expenditure.
Enhancement of technology solutions for the elderly
- In addition to the current basic service of medical emergency calls via an emergency button installed in homes of elderly individuals, iWOW Technology is upgrading the system to include other lifestyle services such as house-keeping, laundry, food delivery and home maintenance.
- According to the Singapore Department of Statistics, the elderly population (65 years and above) is on a gradual uptrend with 16% of the elderly making up the resident population in Singapore as of 2021. iWOW Technology’s creation of a seamless, user-friendly technological device with day-to-day essentials is expected to fill the void in this under-tapped space.
Overseas expansion to harvest more contract wins.
- iWOW Technology is expanding its market reach through offering IoT solutions in overseas markets, such as Japan, Thailand, Malaysia, Indonesia and the United Arab Emirates. The company’s aim is to target countries with high penetration rate of IoT and digital infrastructure or with a focus on technology-driven solutions similar to Singapore’s Smart Nation Initiatives.
- As of the Latest Practicable Date, iWOW Technology has entered into a distributorship agreement for the distribution of Trace Tokens in Malaysia and received purchase orders for Trace Tokens from customers within Indonesia and the United Arab Emirates.
The next big hit: Next Gen ART test kits.
- iWOW Technology has created a smart ART test kit which enables user identification, verified test processes and automated test readings/data in cloud operations, thereby enabling operation optimisation by organisations. iWOW Technology has partnered with one of the world’s largest manufacturers of rapid antigen tests and leader in COVID-19 testing solutions globally.
Key financial highlights of iWOW
- iWOW Technology's FY2021 revenue surged 504% y-o-y to S$26.4mil while bottom-line grew 185x of FY2020. This was mainly due to the sale of TraceTogether tokens under the Smart City Solutions (SCS) segment. Meanwhile, higher recurring revenue from EMS solutions as well as new contributions from AAS projects contributed to the growth of the IoT as-a-service (IaS) segment.
- Deployment of Smart Metering and AAS solutions, as well as the design and supply of contact tracing solutions and Trace Tokens fall under the Smart City Solutions (SCS) revenue segment which are collected on a project/product sales basis.
- On the other hand, IoT as-a-service (IaS) segment is based on a subscription model where recurring fees are collected from iWOW Technology's Smart Metering, AAS, and EMS solutions.
- See
Megan Choo
KGI Securities Research
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https://www.kgieworld.sg/
2022-04-11
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