CyanConnode Holdings – still plenty of time to get enmeshed in this group’s shares, especially with the global orders flowing in, shares now 14p and going higher

05.03.2025

Yesterday morning CyanConnode Holdings (LON:CYAN) announced further details on its order position.

Having initiated my coverage of this little company way back in mid-September last year, when its shares were just 8.8p, I have to say that I have been pleased with their subsequent performance.

Following the new order announcements yesterday, they closed last night at 14p, with a £50m valuation.

Now I see a lot more order activity in 2025, which could well be of a positive impact upon its shares going forward.

The Business

The Group is a world leader in Narrowband Radio Frequency (RF) Smart Mesh Networks, which are used for machine-to-machine (M2M) communication. 

As well as being self-forming and self-healing, CyanConnode's RF Smart Mesh Networks are designed for rapid deployment, whilst giving exceptional performance and competitive total cost of ownership.

In June 2018, CyanConnode launched its award-winning Omnimesh Advanced Metering Infrastructure (AMI) platform, which has already gained considerable commercial traction, especially in India which is a key market for the Company.

Through a Global partner eco-system, which is vendor agnostic, CyanConnode has several routes to market, therefore it is well positioned to capitalise upon increasing Global demand for smart metering solutions.

Yesterday’s Order News

The Group announced that it had secured two major follow-on orders for, in aggregate, 872,000 Omnimesh Modules from Montecarlo Limited, a leading infrastructure conglomerate in India and an established partner of CyanConnode.

The orders include Omnimesh Next-Gen In-Meter Gateways, which integrate communication systems directly within smart meters, eliminating the need for externally mounted gateways and thereby simplifying and accelerating installations.

The Orders

1.    Madhya Pradesh Smart Metering Project:

An order for 474,572 Omnimesh modules, including Advanced Metering Infrastructure, standards-based hardware, Omnimesh Head-End Software with a perpetual license, and a comprehensive support and maintenance contract.

This builds on CyanConnode's initial January 2023 contract with Montecarlo, which covered 983,525 Omnimesh modules for Madhya Pradesh Poor Kshetra Vidyut Vitran Company Ltd in Jabalpur, aimed at enhancing the state's power distribution and metering infrastructure.

2.    Nagpur Smart Metering Project (Maharashtra):

A new order for 398,000 Omnimesh modules, including Advanced Metering Infrastructure, standards-based hardware, Omnimesh Head-End Software with a perpetual license, and a comprehensive support and maintenance contract.

This order adds to the earlier order of 1 million Omnimesh Modules for the Nagpur Smart Metering Project, further strengthening CyanConnode's presence in Maharashtra.

Management Comment

Chairman John Cronin stated that:

"I am delighted to announce these significant follow-on orders from Montecarlo for prestigious smart metering projects in Jabalpur, Madhya Pradesh and Nagpur, Maharashtra.

Our earlier deployments in Madhya Pradesh, particularly in Indore, set industry benchmarks and became case studies for Distribution Companies (DISCOMs) across India, achieving returns on investment within two and a half years.

 Securing repeat orders underscores the proven effectiveness of our cutting-edge, standards-based technology and highlights our deep expertise within India's rapidly growing smart metering ecosystem.

With these projects now secured in Madhya Pradesh and in Maharashtra, our Omnimesh RF mesh network technology continues to strengthen the backbone of India's smart metering infrastructure.

We work well with Montecarlo and we are confident this collaboration will continue to flourish, further enhancing CyanConnode's leading position in the industry."

The Equity

There are some 358.89m shares in issue.

The larger holders include Axia Investments (13.01%), Premier Fund Managers (9.53%), William Johns-Powell, Dir, (5.478%), S Chari Ltd ( 5.36%), Oberon Investments (5.03%), CRUX Asset Management (4.07%), Paul Gough (3.19%), John Cronin, Chmn, (2.06%), Peter Tyler, Dir, (0.73%) and the West Yorkshire Pension Fund (0.56%).

Broker’s View

Upon the securing of the two new contracts, analysts Bob Liao and Carl Smith, at Zeus Capital, are looking for record profits, margins and FCF in H2, which should increase investor interest and trigger a rise in the group’s undervalued shares.

For the current year to the end of this month, they look for group sales to rise to £34.5m (£18.7m), lifting it into profitability of some £2.5m adjusted pre-tax profits (£2.9m loss).

That should generate earnings of 0.5p per share against the 0.5p loss last year.

My View

At just 14p this group’s shares offer some interesting upside as its break into profits continues along with the development of its various products.

It has a good order backlog upon which to progress before its year-end.

The next corporate information point could well be mid-April, by which time its shares could have continued to show further price increases.

(Profile 12.09.2024 @ 8.8p setting a Target Price of 11p*)

Asterisk * denotes that Target Price has been achieved since Profile publication.