Constellation Technologies secures its first contract in China

Constellation Technologies ASX CT1 China Beijing BHZQ Environmental Engineering Technology
Constellation's new contract is set to generate around $480,000 after the new solution goes live in July 2020.

Internet of Things company Constellation Technologies (ASX: CT1) has announced its first-ever customer contract in China, courtesy of its local subsidiary, with the company’s board declaring it was “encouraged by a strong pipeline of potential contracts” in the world’s most populous country.

In a statement to the market, Constellation unveiled a new contract with Beijing BHZQ Environmental Engineering Technology (BHZQ) to provide a new operational management solution (OMS) for a large-scale ecological corridor construction project managed by BHZQ in the Daxing district of Beijing.

The initial contract value has been estimated at RMB2.28 million (A$480,000) with the majority of the contract payments expected to be received within the next two months.

The contract involves the provision of hardware, Software-as-a-service (Saas) for one year, software provision locally and a two-year maintenance and support program.

Currently, Constellation is targeting more than RMB41.7 million (A$8.5 million) in revenues to be contracted over the next 12 months. The contract pipeline includes potential smart city opportunities which the company’s board considers to be a “fertile area of development” in the future.

Building a new OMS

The OMS is set to be designed and built by Constellation, leveraging its own existing IoT architecture and expertise.

The company has also confirmed the first deployment is set to incorporate operational information including personnel and task scheduling with field datasets received from IoT sensors implemented by Constellation at 33 drainage outlets discharging into natural watercourses in the Daxing district.

The company described the new contract as an “expansion of its existing IoT platform” to service an addressable market in China for water infrastructure and management.

As part of its strategy to generate sales in the country, Constellation intends to develop “enhanced products” to meet exacting requirements for the Chinese market.

Additionally, Constellation’s OMS mobile application “will help enable the management and collection of manual observational information from a further 80 drainage outlets, to which sensors may be added as part of future contracts”.

As a further operational advantage, Constellation said its OMS web and mobile applications are operational in both Chinese and English for deployment worldwide, both as Saas and through local installation.

Vertical application for drainage outlets could serve as a means of accessing China’s “substantial serviceable market” of approximately 1 million outlets.

According to recent Chinese legislation, the country’s Ministry of Ecology and Environment has tasked local governments to strictly regulate monitoring, testing, tracing and treatment controls for major rivers, basins and lakes covering millions of drainage discharge outlets around China.

“Consequently, our Chinese subsidiary is currently exploring further opportunities to sell the OMS in China,” Constellation said.

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