Yesterday the ASX welcomed another digital utilities stock in X2M Connect (ASX:X2M) – and it says things are just getting started in this space.

X2M, is an IoT (Internet of Things) company, which monitors and controls smart devices in the gas, water and electricity sectors.

In general terms digital utilities, (“smart devices”), such as X2M’s can be remotely controlled remotely or sometimes even act in their own right utilising Artificial Intelligence.

These can include devices ranging from thermostats to lights and even electrical appliances that are able to adjust – in ways other than manually controlled switches – so that energy is used more efficiently and conveniently.

The term smart device may bring consumer gadgets such as Google Home and Amazon Echo to mind but these can also be more complicated devices owned by other companies for enterprise use.

X2M solutions for monitoring and control of water and gas as well as electricity grid management and energy optimisation.

The company claims to have over 100,000 devices connected to its IoT platform and is in several countries in the Asia-Pacific, particularly Korea.


The start of a journey rather than the end

Speaking with Stockhead yesterday, X2M’s boss Mohan Jesudason said things are just getting started in this space and for his company.

“It’s the start of a journey rather than the end,” he said.

“We’ve gone down the IPO path to raise capital to two things. One is to moving to adjacent geographies, what we’re doing into Korea, to replicate into Philippines, Vietnam, Sri Lanka…

“And the other is  we don’t think that there will be in this sector a piece of hardware that won’t be able to communicate, whether it be smoke sensors, pressure sensors, water meters, gas meters, micro grid, solar.

“They’ll all have communication capabilities and our business is to license those hardware companies and be the heart inside their software.”

And it’s not just so people can save their costs. Jesudason noted for instance a change in utility usage patterns could be used to detect if someone elderly was in trouble.

“The [COVID] environment has created the need for this technology,” he said.


Other digital utilities stocks

X2M Connect isn’t the first digital utilities stock to list on the ASX this year.

EP&T Global (ASX:EPX) debuted on the bourse in mid-May.

This company’s software is aimed at owners and operators of major buildings, helping them achieve savings from both cost and carbon footprint perspectives.

The company was founded back in 1993 and claims to have achieved an average reduction in CO2 emissions and energy costs of 23 per cent for its clients.

EP&T Global delivered a solid result growing its contracted buildings by 49%, entering four more countries and growing its annualised contract value by 43% to $10.9 million.

Bill Identity (ASX:BID) has been in this trade too, although it has been listed for several years.

It automates the management of every component of the billing process, capturing and validating invoices and metre data, streamlining the payments process and reducing billing charges using analysis and reporting.

In FY21, the company more than doubled its platform revenue to $9.8 million.


Product sellers

A couple of other ASX stocks are in the digital utilities game by directly selling smart energy devices to consumers.

One is Zimi (ASX: ZMM) which claims to be Australia’s leading electrical Internet of Things provider selling individual devices such as smart blind controllers as well as broad devices connecting devices.

One company with a foot in both camps is Buddy Technologies (ASX:BUD). Buddy has been best known for its technology that helps building managers track environmental data and understand what’s chewing up energy.

In 2020, it started selling its own smart lighting products which proved exceptionally popular.

But, 2021 has been a tough year, with the company being plagued for several months by an accounting issue in the form of inflated revenues mistakenly reported to the board.