Equity researcher TMT Analytics has initiated coverage of internet of things platform CCP Technologies, giving it a ‘buy’ recommendation and advising that its share price could more than double over the next 12 months.
CCP is in the business of remote monitoring of critical control points, initially operating in the food industry but with a number of other sectors, including healthcare and energy, in its sights.
It deploys wireless smart sensors in places such as restaurant and hotel freezers and fridges, allowing customers to remotely monitor their temperature, humidity and “open/close events” at any time. The system provides real-time alerts via SMS and email.
Customers include Caltex, IGA, Metcash, Crowne Plaza and Stratosphere Casino. They use CCP technology to monitor and improve food safety, reduce wastage and cut monitoring costs.
Food industry regulation in Australia and overseas is a key driver of business growth. For perishable food, multiple intra-day temperature monitoring is a requirement in Australia, the United States, and many countries in Asia and Europe.
Currently 90 per cent of businesses in the food industry do this monitoring manually, which is an expensive and error-prone approach.
Around 48 million Americans suffer food poisoning each year, so the regulation of the food industry in that market is not going to lighten up any time soon.
Data collected by CCP’s sensors is uploaded to a cloud platform, which is based on Microsoft Azure.
TMT Analytics says CCP’s platform “provides a foundation for a range of IoT applications, such as remote energy metering, air quality monitoring, smart street lighting.
TMT says CTI’s share price, which closed at 1.9 cents on Friday and has been trading in a range between 1.8 cents and 3 cents this year, does not reflect the company’s market opportunity. It has a set a target price of 4.6 cents a share and a ‘high’ risk rating.
“CCP is actively building out its channel partner network with food service partners, telcos, equipment manufacturers, IT integrators and resellers,” TMT says.
Last month, CCP announced a trial with Vodafone. It will participate in a trial of Vodafone’s NB-IoT network in Melbourne. NB-IoT is a low power wide area network used to wirelessly connect millions of devices that have low bandwidth requirements.
Using NB-IoT will diversify CCP’s “connectivity pathways”. Announcing the trial, CCP chief executive Michael White said: “We can strengthen our solution by providing our customers with access to Vodafone’s NB-IoT network.”
CCP reported a loss of $3.7 million for the year to June. TMT expects that loss to reduce in the 2018 and 2019 financial years, with the company on track to report its maiden profit in 2019/20.
TMT says CCP has three revenue sources, including monthly subscription for each sensor deployed, fees for development services and cloud platform licensing.
It says CCP’s market is fragmented. “There are quite a few companies that offer some sort of temperature sensing technology to the food and food service industries. However, many of these solutions are substantially more expensive than CCP’s. Additionally, many don’t provide a high level of integration, enterprise-grade analytics or task management systems.”