Plover Bay Technologies Limited (1523) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to Plover Bay's 2020 Post-Results Conference Call. I'm Christopher Tse, CFO of the company. Today, we also have Alex, our Chairman, on the line here. Today's call will start with financial highlights, and then we will go through some business updates, after which, we will have a Q&A session. Also, unless otherwise stated, all dollar amounts are expressed in U.S. dollars. Before we start, our latest results have been posted on Hong Kong Exchange, HKEX News website, and our presentation slides can be found at our website, www.ploverbay.com under the presentation section. Now let me dive into our financial highlights. This year, our revenue increased by 15% year-on-year to USD 52.8 million. Our gross profit was USD 30.8 million. Gross margin was 58.3%. The amount of operating expense was largely stable at 29.3% of revenue. Profit before tax increased 14.6% to 16-point -- USD 16 million. And then our net profit was $14.2 million, up 17.7% year-on-year. Diving deeper into our revenue breakdown. Wired SD-WAN increased 16.5% year-on-year. Wireless SD-WAN increased 15.3% year-on-year. The overall growth in SD-WAN router is about 16%, driven by strong sales in our more basic series of SD-WAN routers, which led to a decent growth in our software licenses segment, which grew 30% year-on-year. Warranty and other support services increased 9% year-on-year, which is largely in line with past growth trend of our SD-WAN router sales. Next, geographically, while U.S. remains our largest market with 56% sales mix, EMEA, Europe, Middle East and Africa, also had some strong growth of 34% year-on-year due to strong revenue growth in Netherlands, Germany and Denmark. We are also pleased to see some good progresses coming from Asia, which grew 18% year-on-year. Next, gross margins. Our gross margins dropped to 58.3% this year. As mentioned, we sold more basic routers at competitive pricing to accelerate user [ breakup of ] our ecosystem. So this led to a product mix shift to these lower-margin products. Second, we also had an inventory write-down of $0.7 million, which around $0.5 million actually happened in first half, so second half only $0.2 million. When comparing the same products, gross margins remain largely unchanged. Operating expenses were largely flat from last year. During the year, we benefited from subsidies from Hong Kong government, COVID-19 related bonds; and Lithuania government, they had a subsidy on our R&D activities. Overall, operating expense levels are well in control at 29% -- 29.3% of sales versus 33% in 2019. Finally, we reported a net profit of $14.2 million, up 17.7% year-on-year, and our diluted EPS is USD 0.0133. We also declared a second interim dividend of HKD 0.0623 and a special dividend of HKD 0.0217 So that's the recap on our financials. So let me pass on to Alex to talk about our business outlook.

Thank you, Chris. So the year 2020 was a year of accelerated change. The pandemic has changed the mining industries and how people work, learn, all within a very short realm of time. Our patented technology, SpeedFusion, has helped many organizations and schools to work, learn from home. It is also the technology behind many record department solutions for health care and government organizations. For temporary relocations, SpeedFusion is recognized as the technology behind a stable, reliable connection for videoconferencing, video streaming and secure network access. Stepping into 2021, 5G networks around the world are starting to gain traction. We expect 3 things to happen. First, for locations and facilities currently relying on LTE WAN, there will be a multiyear of recycle to 5G for better speed and lower latency. Applications like surveillance cameras, WiFi hotspots within transportations, live video streaming, fixed bandwidth failover would create a strong demand on 5G wireless SD-WAN routers. Second, the cost per gigabyte with 5G will be substantially lower than LTE. Wireless WAN is always a metered network, while the landline broadband has an unmetered fixed price. This has been a psychological barrier for some organizations to deploy mobile broadband but it's the cost per gigabit, which is at a level low enough that the monthly fee is comparable to a landline broadband. The benefits of SD-WAN based on 5G will overcome this psychological barrier. Third, business will deploy more in regional separate networks for their workforces to work from remote locations because of digitalization. This is not limited to the work-from-home scenarios but also increased branch networks that need to be moved frequently or located in remote and ad hoc places around the country or region. More small-sized at-home networks will be created and these networks need to be simple to use, fast to deploy and must ensure reliable connection to the cloud. If there is a subscription option -- if there's a subscription option for building these networks, businesses will gradually embrace it. As for many technologies in the early stages of their adoption cycles, currently, there are many blips around 5G. A company's misunderstanding is that the increased speed from 5G would eliminate the need for SD-WAN or, precisely speaking, a single 5G connection from just 1 mobile network operator is thought to be fast enough for everything. Speed is just one dimension of 5G, but relying on just 1 single mobile network operator does not resolve the reliability issue. Just like any wireless technology, reliability of 5G is subject to network coverage, fair usage policy, network capacity, et cetera. Nobody can predict the degree of mobile congestion of a 5G base station at any given time. Because of this, wireless SD-WAN that connects to multiple mobile network operators to enhance reliability makes total sense. Our patented technology, SpeedFusion, and our purpose-built devices are designed for this purpose, making wireless SD-WAN possible and reliable. So this brings an exciting opportunity for Plover Bay and our shareholders. First of all, Plover Bay is not a hardware company. We make high-performance, purpose-built hardware platforms for various vertical markets. Our tightly integrated software runs under the hood of these platforms, giving rise to our reliable and easy-to-use products. Furthermore, our platforms can be managed by a scalable cloud service in control. Our customers can remote-manage and provision these devices all over the world. As you can imagine, we're about a scalable cloud service, deploying hundreds and thousands of devices and managing them efficiently will be a very painful process. Our cloud services realize the powered by a warranty package and subsequent renewables. These 2 constitute our recurring sales, which today contributes about $13.5 million or approximately 25.5% to our annual revenue of USD 52.8 million. Moving forward, Plover Bay will not just be doing SD-WAN. We will launch a new subscription service that quickly simplifies the deployment of networks based on 5G and LTE. It will be simple to use, easy to deploy and eliminates a lot of friction in deploying 5G LTE devices. So we will be providing more details about business technology, subscription services at a later stage.

Okay. So that's the business outlook and business update. So we are now open for Q&A. [Operator Instructions]

Hello, is this the rerun? Hello, can you hear me?

Yes, I can hear you.

Yes. So sir, I have a question. So you mentioned this 5G can lower the cost of the bandwidth to be the similar to the fixed line. Is that just regular fixed line or it's some special business network connections?

This is Alex. So actually, we are referring to both commercial broadband Internet as well as those MPLS connections or business Internet. So the situation is because of the 5 -- because 5G is going to bring down the cost per gigabyte substantially. So if you take a look at the market today, so let's use some examples in Hong Kong. So in the past, when you are having on the -- when you're on the LTE network, so you're basically paying something like HKD 400, which is about roughly USD 50. And then so you get something like 20 gigabyte but then there's an analysis. Like you're paying maybe double, maybe you're paying something like HKD 600, which is USD 75. And then so you could easily get a 300-gigabyte plan from the mobile operator. So -- and if you look into the daily usage of 300 gig. So this is actually a pretty useful or pretty decent for branch network. So this is compared -- this is really comparable to a business broadband because Hong Kong is about a business broadband, you probably are paying something like USD 600 for 1-gig fixed line connections.

Okay. Is this broadband, is it more expensive? Is that because it's more reliable, like an MPLS?

Actually, I would say that the telco might have a different story about this. But I would say it's actually all these broadband connections, no matter this is a commercial broadband, consumer broadband, it's pretty much the same.

Okay. So you mentioned that right now, the branch offices are using your solution because it's a mobile, it's not fixed location. But do you, within that, lay down the -- some other retail branch office if they will use the mobile -- your SD-WAN solution instead of fixed line?

Yes, that's exactly right for a couple of reasons. So the #1 reason is, so you know it's how we work within a fixed location, most of the time or some of the time we say, you have very limited choices. Let's say, if you have -- or if you are in a building, I mean, that building is that they only have 1 network coverage from 1 fixed network operator and you have no choice or maybe you have 2 operators there, but you still have limited choices. But then it's a good mobile and you have a couple of different choices. So usually, there are a lot more choices on mobile and fixed line. This is the #1 reason. The #2 reason is with the fixed line connection, you are always being asked to sign a contract. A typical contract would last for like 2 years. That means in that 2 years, you stick to 1 location. But then even when you have a mobile connection, yes, you still have a contract. But then that contract is not bound by a particular location. So that means you can still move your routers, you can still move your branches around or you can move your other locations. So this is the second part. And the third part is lots of time is when you're deploying a couple of branches, like 20 branches, 30 branches, but for mobile, you can't have a broad plan. So that means that you can access to your data pool and with that data pool, you are able to lend -- you are able to combine all this as the -- yeah, you can compile these consumptions into 1 deal. So that means in some branches, maybe you have a low usage branch, but then these low usage funds branch subsidize your high usage branch. So these are all the benefits that makes mobile being a viable alternative to fixed lines.

Okay. I got it. So just one more thing. So you mentioned they kind of have a data pool. Is that -- do they have that option right now? Or this is after the [indiscernible]?

Okay. So now most of the operators, they do give you an option for data pooling, but that is limited to their own plan. So let me say, for example, if you are using MNOA so mobile network operator A. So that means that all your devices, they give you a data book on their own network. But then let's say in our upcoming services, the speeds used in connect band, we are able to provide multi-carrier data pooling together. So that means it's unusual, you are not bound by 1 single network. You have your freedom of choices to have your traffic running on different mobile network, but then we are still able to offer data pooling for all your devices and your branches.

It's James Morton from Santa Lucia in Singapore. And thank you for both a great set of results in a -- from a very difficult year and for a nice final dividend. It's very much appreciated. Looking forward, it seems to me that the company is entering a phase where growth is likely to accelerate relative to where it's been in the last 2 to 4 years if I've understood the transition correctly. Does this mean that we should expect that you'll be able to do even better in 2021 in terms of growth relative to last year?

Yes, James, you are exactly right. This is our expectation. And actually, as I have explained to our long-term shareholders in the last couple of years. So we were laying our foundation. Because we notice from time to time, it's all these technology cycles happens from time to time. And then in the last couple of years, LTE was actually pretty -- was developing pretty good and stable. And so we had some reasonable growth there. But then as moving forward is because of the 5G network. And because of all the reasons that I just mentioned above, and actually it's about the pandemic, that is actually changing a lot of people's and companies' behavior. So all these things are going to benefit Plover Bay's business. And at the same time, it's because we have laid out the foundation for our business growth, together with the subscription services. So we are confident and we believe we are able to accelerate faster.

So 15 -- sort of mid-teens growth is good, but would it be too optimistic for us to think that you could be doing something above 20% this year?

Okay. I would say we don't want to go really deep into committing a number. But I will say, we are very confident that we are taking new approaches. We -- as you can see, actually, we don't care too much about the gross profit margin, but instead of growing the ecosystem. But instead of growing the installation bases and growing the technology adoptions. Because our business model, we believe it's when customers are using our technologies and products, they will stick with our ecosystem. And then in this ecosystem, they will continue to subscribe to management services, no matter that is in control or the SpeedFusion cloud or the upcoming SpeedFusionConnect. So with all these services, cloud services and all these connectivity services, it actually has a pretty high margin. So even though when we might have a drop on the gross margin, on the hardware products itself, but then it's the recurring revenue. These are higher-margin business; it's going to compensate that. So I would say is, we won't say it's like 20%, 25% or anything like that. But for sure, that is -- we believe it's a stronger growth can be expected. And I would say that, yes, we're still facing challenges too. There are challenges along the road as well, as everybody knows. So the biggest challenge right now is the semiconductor industry is actually having shortage on almost everything. So of course, we are trying to stock up the components that we need, and we are trying to -- I would say, from the past 5 years, as you have seen, we have pretty good execution capability. On our operational side and the execution capability and next year, I'm pretty proud of our team. So -- but still, the challenges, let's say, semiconductor industry, when there is a supply chain shortage, when there is actually a component shortage or all these things, all these things is a lot of times it might not be entirely under our control.

Right. Well, as you say, you're not the only one facing that problem. And reverting to your earlier comment, you have indeed been sort of guiding us for the last couple of years towards the transition. So I have one last question, which is in terms of the recurring revenue stream, what sort of percent of total do you think it's realistic to expect that to become over the next couple of years?

I would say, yes, in 2 years, so we are pretty comfortable about that it could grow. Now it's somewhere like 25.5%. And I think in 2 years' time, we are pretty comfortable to grow that very high.

I'm sorry, which number? I didn't quite catch that.

Okay. Yes. So today, the recurring revenue contributes roughly 25.5% of our total revenue. And then, say, in 2 years' time, so we're confident -- we are confident that we should be able to reach 35% of the total revenue.

This is [ Scantas Ji ] of China Tonghai. I would like to ask several questions. First is that during the COVID in the last fiscal year, any -- what kind specifically about the component shortage or any tax or IC we faced in the last year? The second question is that I find that our bank borrowings is we have -- we take our bank borrowings of about USD 3 million. Is that -- what is for or any -- is it -- yes. What's the reason? And the last question is that any M&A target, we would be in the coming fiscal year? That's all.

Okay. Sure. Okay. So first question is, yes, components. So the component shortage is as you can see some -- okay, our wireless module, one of our wireless module supplier. So we have some component shortage because of the pandemic and then, so that is hurting some of -- okay, that's hurting most of their customers, including us. But then is -- the good thing is because we have been always a good customer. We always pay on time. And then we always -- and I would say is our growth, our purchase was always in a growth check in the last couple of years with these guys. So as we get priority to get some of the -- we get priority in getting some of these shortage components. So I will say is, in summertime, in around July, all this and then it's a, yes, we've had some shortage on the products on some of the models. But then in that case, we have our -- yes, the supply chain is pretty much normalized back in the September-October time frame. Yes. So I would say that has been open. Yes. So it's not uneasy for us anymore. But at the same time, we all know that this is an industry-wide problem. So this might happen again, but then is -- but that's why it will lead to the numbers. You can see our inventory actually ramp up a bit because we kind of like stocked up the key components that we need. So I would say we are prepared for the situation. So that is -- I hope that answered your question number one. So your question number 2 is about the bank borrowing. So when the pandemic just happened at that March-April time frame, and actually, as you have seen our business in the first half was impacted just like everybody. And then so we just bear with it again, so maybe we need to prepare for the storm. So that's why we just obtained the bank loan from a facility from our bankers. But then once you're part of the facility from the bankers, and then you need to utilize that a bit. So I would say, exactly, we just estimate that because of -- we apply for a bank -- we apply for financial line that is we just may use it. But as you can see, it actually it's more a safety purpose. So it's not really a big deal. So for your third question about the M&A thing, I think is -- for now is we don't -- we will have identified anything interesting, but I would say if there's a good deal, if there's a synergy, if there's something interesting going on, we are open minded. But our value creation is mostly on people. Our value creation is mostly on software. And then from this perspective, then actually the capital expense, the CapEx is actually not that huge. So it's more like it's a high-range equipment and then it's -- yes just as a -- yes, just focus on what we are doing today. So the M&A thing is actually we are open minded, but this is not -- and I would say that our growth is not really relying on that strategy.

Can you hear me?

Yes.

This is Michael from Crosby. Congrats on the great results. And I've got 2 questions. The first one is about the SpeedFusion. Last time we talked and we say the SpeedFusion will have a more contribution in this year. So first, I want to ask what's our expected contribution from this product line? And this is -- as far as I know, this is a cloud-based service. So is it counted as a software license business in our product line? So is it like we just mentioned, the recurring will account for 35% of our total revenue in 2 years' time. So I mean, for this book in the recurring income, is it driven by the SpeedFusion? Or is it driven by the installation phase increase on our other products?

Okay. Yes, sure, Michael. Okay. So actually, as SpeedFusion is, I would say is, our focus is always the wireless SD-WAN and then it's with this wireless and SD-WAN is the -- SpeedFusion plays an important part here. Because when we are combining with different networks together, so we need a technology called SpeedFusion to do this. So basically, I would say, most of our products are SpeedFusion-enabled products. And then it's about for the recurring revenue. The recurring revenue is actually coming from a subscription service. So now I think the name is still a bit miss -- the name is still a bit confusing and misleading because we still call that warranty and support services. So the thing is, we offer a warranty and support package to the customer. And under this package, this package is pretty much like a subscription package. And then so it is including access to the cloud management system in control. It is including access to the SpeedFusion cloud which is one way to simplify SpeedFusion deployments. So that means that SpeedFusion is no longer for just IT personnels. This could be useful for home users. This could be useful for any individuals who work from home, who learn from home but they need an unbreakable connection. So when they need an unbreakable connection, they do not need to set up a SpeedFusion hub at the cloud by themselves or they do not need to set up something at a data center for themselves. They can just subscribe to this warranty support package. And then so they know that they can manage the devices remotely, and then is that they can own their networks with SpeedFusion to the cloud and then so say, for example, it's now is at their home. They can bond their home broadband together with 5G or LTE connections together. So when everybody is working from home, if the home network is not that -- if the home network do not have sufficient bandwidth for the video streaming because don't forget the video streaming, it's usually 2 ways. And that is a lot of home broadband connections is you have a faster download speed but a lower upstream speed. So that means that, that is not really designed for video streaming. But then in that case, when you connect to the SpeedFusion cloud, that could solve the problem or when you're having a Zoom call, voice call or anything like that, SpeedFusion cloud simplifies the whole thing. So all these 25.5% recurring revenue is highly related to SpeedFusion. So because, as you can tell, this is our patented technology, and it is to our best interest to keep on growing and deploying and seeding devices to bring people into this ecosystem. So this is a SpeedFusion ecosystem.

Okay. So that means be SpeedFusion cloud is one of the feature of the warranty and support services.

Yes, exactly. Yes, this is a very -- yes, this is a very precise description.

Okay. So do you have -- can we leave the price if we have this new feature?

No, not really. Because as I mentioned, business actually it's more running a support package. So let's say, if you are having a bigger devices, a more advanced sophisticated devices because we have some devices which we were starting at something like USD 7,000. And that is where we have some devices which are starting at USD 500. So then the warranty support package, prices for these 2 different tiers are different. So say, for example -- I can give you some examples. So let's say, if this is like a $7,000 devices, to this is roughly 17% of the purchase price. But then if that's like $500 devices, it could be something like 15%.

Okay. Okay. Got it. Got it. Okay. And one other question is regarding the geographical region growth. We see last year, the fast-growth region is EMEA region. So can you elaborate more why the Europe is the fastest-growth region? Is it -- last time we mentioned, it's due to some [ marine ] time products from Denmark and I remember it's Netherlands. So is it that's the key driver? Or there's other drivers?

Right. Okay. So #1 thing is, in the past, most of our business, most of the SpeedFusion deployments, these are going into projects. So these could be public safety agencies projects. These could be maritime projects. This could be large construction company's deployment. So all these things are project basis. And then say, if this is project basis. So it's hard to tell which country, which region is going to grow faster because, yes, this is project basis. But now as we are moving towards a new, new era. And that is with this new era is, we have a lot more lower-priced devices. And these lower prices devices are more affordable to everybody. So this could be for individuals. This could be for smaller SMBs. This could be for general more mass market or I would say this is more like a prosumer market. So if we're talking about the prosumer market, this could be some guys doing -- this could be some YouTubers. Yes, because yes, we do have YouTubers that where people making contents and then so they work from home and then is -- but they still need the reliable connection to the Internet. So yes, this is a new mix of customers. So in Europe, it's actually the growth is because now we -- yes, you remember, it's actually, since last year, we have a new development team in Lithuania. So that developed in Lithuania is not only doing product development. But we are also having an operation team there. So now we are also having a European warehouse in Lithuania. So with this kind of flexibility. Now we -- our growth is not limited by the distributors. Our growth is not limited by the resellers because now we can access to amazon.com. We can have access to all these e-tailers or we can actually work with different e-tailers. As you know, the e-tailers, they are basically just consolidating traffic or they are just scrapping the traffic. But then, they do not do the fulfillment or anything like that. So now it's with our European warehouse, we are able to do fulfillment by ourselves. Well via the amazon.com or other e-tailers. So I would say this actually contribute -- this is a key contributor of the business growth there. But of course, definitely, it's not the maritime, because we are the market leader in several areas, including maritime. Just in the past, in maritime, if you want a good Internet connection, your only choice is satellite, but satellite is expensive and the latency is not as good as putting multiple LTE connections together. And of course, we will see -- or what we're expecting is the upgrade cycle over the maritime towards 5G is happening. So I would say is all -- yes, the maritime is still -- yes, we are still a market leader there, but then that is not the only factor contributing to the growth in EMEA.

Next, we have a question that's typed in. So the question is, it is -- we want to -- we expect the future dividend payout level, will the current level of dividend payout continue?

Actually, our strategy is we do not want to have too much cash or it's too much -- okay. We do not want to have too much idle in cash sitting at the company. So I would say is, let's say, if our recurring revenue is still growing well and then if the -- yes, we do not have a big intention in changing the dividend policy. But as you can tell, if there are opportunities in the industry, that is interesting, then, we will -- okay. I just called that. Okay. So the thing is we are looking for long-term sustainable growth. We are looking at what makes sense to the company long term. So if there is an acquisition or if there is an investment opportunity that makes sense to the company, and if we have to do that because that is benefit to the company's long-term, we might change the policy. So this is not -- I mean, this is not a policy that we can never touch. But bottom line is, we are here for long term. So when we do the investment, we aim for long-term or if we're running the business, and we are seeing that there is a lot of -- there's a lot of cash generated from the subscription business and the operation, then there's also no reason of sitting these idling cash in the company.

[Operator Instructions]

Do you hear me now again? So I had one more question. So you mentioned that you are growing on the SpeedFusionConnect. And so what's your reason on this one? So do you think that the mass market, do you think it will be more on the retail office, like a regional office? Or it's more like a prosumer or it's like the IoT opportunities? What do you think?

Okay. I think there are lots of possibilities for this product because the nature of this product is it simplifies connectivity. So you imagine you -- okay, imagine today. Now, if we are connecting to a mobile network, so the #1 thing is we need to go to acquire a SIM card. So in order to acquire a SIM card, we need to go to the mobile network operator and sign a contract. And then signing a contract is usually pretty slow, pretty painful process. And then the other alternative is yes, we can use a prepay SIM card or we can even use those IoT SIMs and things like that. But then in the situations like that, replacing card, then it's a top-up, it's a top -- yes, you have to remember when you top up the data. So that means you got to understand how much data you have spent and this and that. So -- and all these things you are connecting to 1 single mobile network operator. So that means when you're deploying the devices, no matter that is a home router, no matter that is branch router or no matter that is an IoT thing. So you don't know if that location, how is the coverage in that location? That means you might need to do a site away. If you need to do a site away, okay, this is another -- this is adding another layer of complexity. But imagine, if you are now using the SpeedFusionConnect, then you do not need to bother about this because that means in that location, when you deploy the devices, so it could -- yes, I mean, it will automatically connect with the appropriate carrier or the best carrier who has the best coverage over there. Or who has the most -- and by the way, because you are connecting there, not with 1 single network operator, you're connecting to at least 2 network operators. So that means you have a better reliability than just 1. So this is the major of SpeedFusionConnect. So we are actually going to adopt this with multiple approach. So one approach is, we will partner with the MVN, our mobile virtual network operator. So as you understand, is most MVNO, they can access to -- or they wholesale the data plan from different mobile network operators. So that means for these guys is now they have a platform. They have a technology platform that can help them better utilize their data plan or now they can have the best platform to better value add the services. So they no longer just sell the SIM card itself. But instead, they are selling a connectivity solution. So this is one of the customer growth or partners that we can work with. So this could be a B2B2C market. Of course, eventually, these MVNOs are selling to prosumers. So I would say it's consumers, it might take some time for them to understand the technology. But for the prosumer, people would understand the value of this because, again, it's for the prosumer. Maybe they already have a broadband connection for their home, but now they might want to have a faster connection on demand when they need more bandwidth. So then the SpeedFusionConnect helps -- helps to add some bandwidth on demand capabilities there. Or another prosumer could be a guy who lives or who has a yacht. And that is -- so if he is spending more time in the summer on his yacht, then this SpeedFusionConnect allows him to keep on accessing content, Netflix and this and that. So basically, they have a broadband connections along with him. So these are the prosumers. So talking about the IoT, a lot of IoT devices are actually operated by many service providers. So all these managed service providers or IoT providers, in this situation, this could be a good connectivity platform for them to connect as well. Let's say, for example, EV chargers. So all these EV chargers now it has pretty much unconnected. So that means you don't know about the usage of that EV charger. You don't know about the usage pattern about that EV chargers. But then -- but in the IoT scenarios, so people can utilize our devices together with the SpeedFusionConnect with these EV chargers. In that case, the managed company of that EV chargers or the MSP, now they have visibility about the EV charger usage and the usage pattern. But again, if you -- the alternative is now you do not need to work -- I think is with SpeedFusionConnect, you do not need to worry about the size array. You do not need to worry about in that particular parking lot, do we have coverage with this single mobile network operator. So I would say the application is actually pretty broard. But initially, we will go after the prosumer market and the MVNO market first.

Next question that is typed in: What is the churn rate for our maintenance contracts? So currently, we do not disclose this number because it's -- because it's sort of complicated right now because when you purchase a device from us, we give you a free -- 1-year free warranty. And sometimes customers will choose to renew with only certain parts of the service. So that kind of confounds our warranty churn rate calculations. So right now, we do not disclose it.

Okay. Let me elaborate this more. So let me explain the mechanism of today. So now, it's actually because we want customers to stick with our -- we want to bring in customers into this ecosystem. So every devices, when customers acquire new devices, it is coming with 1 year, the first year warranty and support services, including access to these cloud services. So they are free. And then there's so different devices. So the more expensive devices, we give them a higher data cap on their SpeedFusion cloud. Let's say, if the customers are buying a $7,000 devices, maybe they get -- they get 10 gigs of traffic or even there's a 50-gig of traffic, something like this. But then if customers are buying a $500 devices, so the SpeedFusion cloud traffic volume, they can use it for free is probably like 1 gig or 5 gig, something like this. So that means within the period, some customers, they might say is, okay, so I can predict I want to use more, then they just purchase more or maybe they purchase optional SpeedFusion cloud data plan. So this is one possibility. And then there are also other possibilities that is. So some customers, when they are deploying a project for like 1,000 devices. So they understand, okay, so it's my accounting depreciation thing, actually this whole thing, I expect it to last for 3 years. So they will just on day 1, they purchase 2 extra warranty support services together. So in that case, they do not need to order or to worry about this. So that means in that situation is now so we have customer purchasing totally 3 years of warranty support services. So yes, this is actually letting a lot of complexity that is how our IT system or we are still trying to figure a way on how to really measure this churn rate. And then now we are adding a new feature, which is the auto top-up so because of all the subscription thing, some customers give us a feedback and say, "Hey, I do not want to bother about this. I'm not going to prepay this in advance. But when I'm reaching to an annual subscription renewal, can you just auto top-up that at that time? So actually, we are working on this auto top-up feature. So I would say today that we measure the churn rate or we put the churn rate, we have these challenges.

Okay. Another question that is typed in says the company is having good results, but the share price do not seem to respond to the results. How could you promote your company to the equity markets or investors to know your company or business?