agm - tzl is too cheap!!, page-38

I am personally glad that Bouris and Ting have not really focused too much on aerospace and other sectors. We have limited resources at the moment and the aerospace sector is not really on fire now and seems to have somewhat longer sales cycles. If you think our comapany has been slow in gaining traction in PAD and IXP it would probably take three or four times longer in Aero. I have a fried that works at Airbus and he told me that it often takes at least five years for a new component to be specified into a new plane. Plane orders are also often delayed too for various uncontrollable reasons. Several airlines like Qantas have recently cancelled some plane orders. Just imagine the ups and downs that we would face in that industry.

As for PAD and IXP these two businesses are highly tied to the growth in online shopping (think: ebay, groupon, deals direct) and cloud computing (think: Apple, google, Amazon, nextdc, facebook). Everyone would agree these are two sectors and the companies I mentioned are on fire at the moment despite the economic slowdown. I cant think of a stock on the ASX that is so heavily tied to the growth of these two huge and rapidly growing sectors. Any decent stock broker who wants their client to have exposure to the growth of these two sectors and the companies I mentioned should be buying TZL.

Sure SMA technology would have more advantages in Aerospace due to its weight but it is a market that is more difficult to crack in my opinion. Ting did mentioned at the AGM that they were keeping a watching brief on Aero largely due the the huge amount of money that was spent in that sector by the previous board. I hope that previous Board planted some real seeds there and we just need to wait but I suspect that if we had spent more money on aero when the new Board took over we would still not have a deal there and we would have no money left to spend. Instead if you have a look at slide 11 of the AGM presentation we have two business (IXP and PAD) that did not have any sales at all in 2010 but seem to been growing rapidly from a low base. We also seem to be innovating with our technology in those sectors. DYOR on this.

I dont think it is correct to simply Google the word "Swing handle" to determine the number of competitors like some have done. Maybe I did not make it clear in my previous post. The electronic swing handle was not what the company was trying to market as being unique at the AGM. It was said at AGM that TZ has something unique with the "TZ ready swing handle" as Data center managers can now buy a mechanical swing handle that functions the same way and cost the same as a cheap china made swing handle that is on the majority of data center cabinets with an option of an electronic upgrade in the future. I did a bit of goggling and I dont see any of the companies that other posters have mentioned on this thread offer a non-electronic swing handle with the retro fit feature of the prototype that was demonstrated at the AGM. I do however see that many of the electronic swing handles out there look like the prototype. Ting gave an example of a problem that TZ currently faced. He said it might be easy to sell to a CTO the electronic handles but often the CFO would not approve the sale as the they would have to throw away a perfectly working swing handles that is already on the cabinet and there was alot of work in the retro fitting which is not a good thing in a data center environment. The reason why we can build a swing handle that can be made electronic in the future is due to the form factor offered by SMA technology compared to DC motors and solenoids.

Ting and Bouris did also mention the advantages of SMA at the AGM for the PAD business. It was said that all our competitors use either solenoid or DC motors in their lockers and there was a reason why their lockers were at least 50 - 120 locker per bank. This is because solenoid or DC motors are "dumb devices" so you need a laptop, PC or some computer circuit to control those devices so that they can do the required tasks. Because TZ locks have an integrated circuit and are already smart you don't have to to have many lockers in a locker bank to make the economics work. Bouris said is why we can do ourPAD which is one locker and our competitors cant. Ting said this is why our Australian network will be more dense then Aust Post. We will be able to have more locker banks as the number of lockers we have at each site will be smaller. The smarts in the SMA is also why we can do away with the kiosk (PC) if we wanted to and have people opening lockers directly with their smart phones. This was said to be good as it would prevent queues forming to use the kiosk during peak times.