Bear Case
Zimi merged with Quantify Technology in late 2020 to create “Australia’s leading electrical Internet of Things provider”. Think smart home devices.
Starting with Quantify Techs (QFY) historical announcements:
•Capital raise in 2019
•Half year to Dec 2018 - revenue of $37,307, loss of $3.7M, $1.5M cash outflow from operations
•In 2018 claim “QFY made significant progress in the development, commercialisation and sales of its revolutionary Q-Device product”. Compare this to 2019 and 2020 financials further down.
•QFY had multiple sponsored (paid for) articles across Market Herald and Business News
•2 ASX queries for 4Cs
•March 2019 4C $84,000 receipts from customers and $1.6M cash outflow from ops
•Sep 2019 4C ZERO receipts from customers
•Fluffy and misleading announcements such as Stable Group installing their products in 18 luxury townhouses
•Overly focused on TAM in announcements
Back to the merged company – Zimi and QFY, now ASX: ZMM
•Website doesn’t work, nor does Quantify Techs website link to Zimi – remember this is an IoT TECH company
•Had a product recall in July 2020
•CEO gets paid $300,000 and CTO $225,000 despite…
•$18,244 revenue for the year ended June 2021
•State they have $2.2M total sales orders from Beacon Lighting as of June 2021 with $400,000 in deposits received
•Had a $500,000 stocking order with Harvey Norman in May 2019 – where is the money?
ZMM appears to be a dog but these can be rewarding if the market misses something. For example, at a $14M market cap if the $2.2M sales orders from Beacon materialise the share price could start to gain some momentum. IoT for smart homes is also a somewhat “sexy” industry. If I were interested in looking any further into the company I’d start by finding out which Beacon Lighting locations will be stocking their product and going to the store to gather some scuttlebutt (ie. have they sold any or what do staff know about the product). Ditto to visiting the Harvey Norman that had the $500,00 stocking order.
If I have missed something or you disagree please let me know.
*Edit: Wrong ticker symbol