Blue Pin, Big Win

• $37.684M Market Capitalization

Guardforce AI Co. Ltd. (GFAI.Q) announced today that it has entered into a mutual agreement with Blue Pin Limited, Hong Kong (HK), to integrate Blue Pin’s Guest Service Robot (GSR). In addition to integrating GSR with the Company’s concierge robots, Blue Pin will also co-market this integration within the hotel industry.

“This project is an exciting milestone for Guardforce AI as we dive deeper into the hospitality industry and provide enhanced innovative robotic solutions that meet the complex requirements our clients demand. Post-pandemic, there is great potential in the Asia Pacific region’s hospitality industry and this partnership with BP aligns Guardforce AI to benefit from it,” said Lei Wang, CEO of Guardforce AI.

For starters, let’s talk about Blue Pin, a Hong Kong-based startup offering effective Indoor Positioning Systems (IPS) for different venues. For context, IPS refers to a network of devices used to locate people or objects where GPS and other satellite technologies are unable to reach, such as airports, alleys, parking garages, and underground locations. That being said, Blue Pin’s IPS functions include:

• Navigation System
• Asset Tracking
• Robotics Localization
• Footprint Data Analytics

Compared to other solutions in the market, Blue Pin provides one-stop effective solutions to clients that are both cheaper and offer superior user experiences. Utilizing its Fusion Algorithm, Blue Pin is able to provide quick IPS deployment for a variety of venues, including exhibition shows. However, the real star is Blue Pin’s GSR flagship solution.

 

Blue Pin’s Guest Service Robot (GSR) is designed to offer a customizable digital solution enabling hotels to improve guest engagement and daily operations. Using GSR’s simple touch screen, a variety of tasks can be fulfilled by GSR, including:

• Online Reservation Confirmation
• ID Verification
• Hotel Check-In and Check-Out
• Credit Card Payments
• Key Card Pickup

Essentially, Blue Pin’s GSR can replace the need for lobby attendants in hotels. In addition to completing a variety of tasks within minutes, GSR is also highly mobile. Using Blue Pin’s IPS technology and its advanced motion detectors, GSR is capable of leading guests to their respective rooms. If that wasn’t enough, these poor bastards don’t need sleep, allowing for 24/7 service.

“For Blue Pin, this agreement with Guardforce AI enables BP to access the expanding Guardforce AI customer base across nine major markets globally to further expand our business beyond Hong Kong. With the assistance from Guardforce AI, we hope to quickly expand our GSR service in other markets beyond the Asia Pacific region,” said Gary Leung, CEO of Blue Pin.

In summary, this collaboration between Guardforce and Blue Pin will enable the Company to expand the usability and application of its robotic solutions, which can be duplicated in other regions where Guardforce has operations. On the other hand, this agreement will allow Blue Pin to leverage Guardforce’s expansive customer base and grow beyond Hong Kong.

Why Did the Stock Plummet?

 

On April 6, 2022, Guardforce announced that it had entered into a securities purchase agreement with certain institutional investors to purchase approximately $10 million worth of its ordinary shares in a registered direct offering (DPO). Under the terms, the Company has agreed to sell roughly 8.7 million ordinary shares at a price of $1.15 per share.

Unlike an initial public offering (IPO), in which new shares are created and sold to the public, a DPO offers only existing shares to the public. A DPO has a few benefits, including the elimination of intermediaries that are often involved in the offering process. This cuts down costs of raising capital for a company without diluting share value by issuing new shares.

However, more often than not, investors tend to tuck tail and run when they see the word “offering.” Generally speaking, investor sentiment tends to fall when a company initiates an offering because it indicates a need for money. In Guardforce’s case, it’s important to remember that the Company has a significant acquisition in the pipeline, which could explain the need for capital.

If this is news to you, refer to this article for more information. To summarize, on March 21, 2022, Guardforce announced the signing of a non-binding Letter of Intent (LOI) with Kewei Robot Technology Co. Ltd. and Shenzhen Yeantec Co. Ltd., jointly referred to as the Kewei Group, to purchase up to 36 of the Kewei Group’s subsidiaries located in China.

This acquisition will be carried out in two phases, with the first phase involving the acquisition of eight of Kewei Group’s companies. The purchase price for phase one is estimated to be USD$30 million and will be paid in a mix of cash and Company restricted shares at a price of USD$2.00 per share. Phase two will provide Guardforce the right of first refusal to purchase the remaining 28 companies within a period of 24 months from the date of the signing of the LOI.

Bottom Line

With the amount of attention Guardforce gets, I find it hard to believe the Company will have any trouble raising an estimated $10 million. Speaking of which, Guardforce’s DPO is expected to close on or about April 8, 2022, which is today. Overall, the Company has expanded significantly and hold’s a strong position in the Chinese robotics market, which is arguably one of Guardforce’s strongest points.

Keep in mind, China has been the world’s largest market for industrial robots for eight consecutive years. Furthermore, on December 28, 2021, the country issued a five-year development plan for the robotics industry. Through this plan, China plans to improve innovation capabilities, build a strong foundation for industrial development, increase the supply of high-end products, expand applications, and optimize the robotics industry’s overall structure.

Much like Thanos, robotics are inevitable. Robots will play a pivotal role in our future in almost all aspects of life including work, family, and recreation. In fact, the Global Robotics Market, which was valued a USD$27.73 billion in 2020, is expected to reach USD$74.1 billion by 2026. That’s a compound annual growth rate (CAGR) of 17.45%, which is pretty impressive given the market’s astronomical size.

I am not an investing pro, however, Guardforce is definitely on my radar. In the last month, Guarforce has expanded significantly, which has been reflected in the Company’s stock performance. Although the Company’s latest offering may be concerning to some, I’d like to believe it’s directly related to Guardforce’s upcoming acquisition.

With this in mind, if you’re considering Guardforce, I would suggest waiting until the Company signs a definitive agreement for the phase one acquisition of Kewei Group’s initial eight companies, which is expected to occur before the end of May. 

Guardforce’s share price opened at $1.23 today, up from a previous close of $1.20. The Company’s shares were down -0.41% and were trading at $1.195 as of 1:04 PM EST.