X2M Connect Limited (ASX:X2M), an Internet of Things (IoT) technology company, is all set to strengthen its footprint in Asia. On a significant note, the company has secured a tender each in China and South Korea.
The upbeat market update triggered a surge in the X2M share price today. At the time of writing this article (MON 20 JUN 2:18 PM AEST), shares of X2M were trading at AU$0.095, up 5.555%.
Bolstering customer base in China
The new contract in China is worth AU$1.34 million. Further, the agreement broadens the customer base in China, implicating another step towards X2M’s explicitly articulated market growth strategy in China. The company initially established a business base in China by selling hardware and then following up with connecting devices to the X2M platform.
Under the contract, X2M will deploy about 22,000 water metres with valve control into the Qingyuan district of Baoding City, which has a population of over 620,000. It is part of a river water replacement project in the district. Significant efforts have been made in China to improve water distribution and management from source to the consumers.
Persistent penetration in South Korea
In South Korea, the tender is worth AU$0.66 million, under which, X2M will cater to 7,777 households in the city of Incheon, the municipality with the second-largest number of water meters in South Korea. Securing the tender follows an initial Incheon contract for nearly 600 households, and delivery will be completed by November 2022. It reflects the continued penetration of X2M into existing customers in South Korea.
CEO of X2M, Mohan Jesudason commented:
“These new tender wins broaden our China customer base and build on our success to date in South Korea, Taiwan, and Australian markets. We are thrilled with the growth that continues to be recorded by our Greater China business and we expect a portion of the revenue from this deal to add to our current year to date China revenues of $3.3 million, which is more than three times what we delivered in FY21.”
He added that FY22 was a highly successful financial year for X2M in terms of key metrics, including revenue growth, customer acquisition and device deployments. These put the company in a good position for the 2023 financial year with substantial contracts on hand for delivery in FY23.
Also read: Why are FCT, X2M hitting the headlines in ASX technology space?
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