I imagine with a rock star line up for the impending east coast...

I imagine with a rock star line up for the impending east coast roadshow we might have found the bottom in CYQ. With volume at anaemic levels it would only take a whiff of news for this one to head higher in a hurry…

Here are my thoughts on what could trigger the re-rate:

- Investors need to start thinking bigger, best in class product with global appeal.

- Cyclists are the perfect initial target market given their love of tech and design. The accessories market is large and growing (est. $16.5b but 2019) but the cross over into the broader action camera space is where it gets exciting.

- We got an indication of a new product launch for September in the company’s inaugural quarterly. My bet is that this product or products with be positioned to compete in the broader action camera markets while remaining true to its cycling based origins. Given how much management value tech and design, no doubt it will be top of the class. I am sure they have been planning this for a very long time and want this to launch them into the stratosphere. Think, defence, law enforcement, skiing, diving etc. and I am sure they will be pushing the ability to share different types of content in social media / Strava pretty hard.

- Looking at GoPro’s quarterly, Nick Wooman has really made a mess of it. Drones not working, the idea of becoming a media content company is not working so they are awkwardly moving back to making GoPro Cameras a capture and share proposition. The Cycliq guys are all over this and ahead of the curve.
   
- I have been looking around for some global comparisons and found this group https://usa.ioncamera.com/
These guys started in 2012 and now have an estimated 12% of the action camera market with annual revenues of circa $400m. They would have spent a lot on marketing but there is the opportunity for CYQ, they have spent little to nothing on marketing. Just 1% of this market would put them on the map.

- Outside the action camera market, you could fit CYQ in the Sport Tech market also. Look at the success of a company like Catapult CAT, just like CYQ they started with hardware devices that capture data for athletes and have since added software capabilities to create saleable analytics. CAT is a $500m company on $50m FY16 revenue after the acquisition of XOS, ex XOS they only did $19m Revenue. You can see what type of multiples the market is willing to pay for sports tech, CYQ could easily cross over here.

- While CYQ has only just kicked off its listed life I can see why the mirco cap fund managers would be all over this one, ticks a lot of boxes. Only a matter of time. Getting set will be tricky.

Just my thoughts.

Cheers

The Doc