NEXT Investors Extract onlyToday, AJX announced the FIRST...

NEXT Investors Extract only

Today, AJX announced the FIRST commercialisation of its cooling technology in the BODY ARMOUR segment, partnering with US-based manufacturer, Premier Body Armor.

Today’s news is a big milestone for AJX as it confirms the company's expansion of its cooling technology products into the US body armour market - successfully executing on its strategy.

With the first customer secured, we think AJX is well positioned to grow this market segment and sell its cooling technology into adjacent markets.

This means that if AJX can show customers its cooling tech works in one area, it can pick up sales in similar or ‘adjacent’ markets.

It goes like this... you’ve seen how our cooling tech works for body armour, why not try it out in your uniforms etc?

Here’s why we like today’s AJX announcement...

We think there are three primary reasons why today’s announcement is positive:

1. It adds another revenue stream for AJX to go after: The new market segment has an addressable market in the US of +US$25M per year. We actually think AJX has understated this addressable market and is being conservative here.
2. It provides validation of the advantages of AJX’s performance chemicals.
3. It shows that AJX can execute on a strategic vision.

Long time AJX investors will know that the backbone of its revenue is supported by selling its performance chemicals to bedding manufacturers.

Indeed, US$5.3M of the US$7.2M of revenue (~74%) that AJX reported in FY2021 was from the bedding segment.

While there is still growth in the bedding market, it is a mature market, so without penetration into new markets AJX’s growth would have been limited.

This is why AJX took the strategic decision to enter into new markets with its adaptive cooling technology, increasing the size of the revenue prize.

Today’s announcement marks the first revenues in the ‘body armour’ market and a big achievement for the company executing on its business plan.

We think that this is only the beginning for AJX, and we are looking forward to seeing how this new commercial venture will support AJX’s overall goal of being cash flow positive in FY22.

Who is Premier Body Armor?

Premier Body Armor is a “direct to consumer” body armour manufacturer and retailer based in Gastonia, North Carolina close to AJX’s operations.

Premier Body Armor customers have included:

• The United States Special Operations Command,
• The United States Marine Corps,
• North American and international OEM’s,
• Private security industry,
• Government agencies,
• The Department of Defense.

We think Premier Body Armor is a good fit for AJX and given their previous sales in the US defence industry, we believe it's possible that this could unlock this larger market for AJX.