Crushmetric [AQSE:CUSH], is this week’s Aquis stock-pick. Founded in 2019 by artist and inventor Noah Deledda and serial entrepreneur Michael Ong, Crushmetric is a design and production company that crushes and dents used aluminium cans into sculptures.
The company has operations in the US, Singapore and China. Crushmetric’s first product was SwitchPen, which Deledda and Ong launched in January 2022.
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Styled ‘The Art of Crushing’ by Crushmetric’s management, the company’s process is the basis of its production. Deledda explains: “The aim of art […] is to represent not the outward appearance of things, but their inward significance,” so you get philosophy as well as crushed cans from this company. Deledda is an American artist known for painting, sculpture, printmaking and design with an inclination to divergent approach. His most recent acclaim being sculptures that re-contextualize the ordinary, dented aluminium can with a method that embraces the incidental gestures of disposal.
Esoteric investment that taps into current trends
This is an esoteric investment. But people, especially the high net worth, are inclined to follow trends and innovations in art. You can acquire a standard Crushmetic black biro for GBP15, with a 475ml tumbler that, “changes shape when the lid is opened and changes back when the lid is closed,” for GBP47. It is definitely a popular phenomenon with GenZ and Generation Alpha consumers – picking up on the zeitgeist of therapeutic crushing videos on YouTube, which have garnered tens of millions of views over the past few years.
Combine this industrial process with art and you have a viable product, as Deledda says: “The thing about denting a can is that you can’t make it do whatever you want, you have to find out what it will allow, and work within those constraints.”
The company is in an early stage of its lifecycle. It published its final results to end-December 2023 in July reporting revenue of HKD6.9m (GBP674,000), down 57.3% year-on-year. Losses expanded to HKD68m (GBP6.7m) up from a loss of HKD5.8m the year previously.
Basic loss per share was HKD0.28p, up from HKD0.06 y-o-y. The company had HKD521,605 in the bank, an improvement of more than 300%. Chairman, Ivor Shrago explained: “The group has faced a decrease in sales in the first half year of 2023 not only due to the challenging market conditions but also because the company has dedicated more resources for new product research and preparation.”
He continued: “In the second half year, we have spent more resources in social media and marketing partners so as to promote the Crushmetric series of products. Overall, the sales in the whole year of 2023 decreased by HKD3.9m although the revenue in the second half year has increased compared to the first half year. This was due to the delay of the launch of our new product – the Tumbler. We believe that Tumbler is the company’s biggest and key product which will give the company better margins.”
Crushmetric moving into wholesale
Crushmetric is investing in product development, launching new colours for its pens and tumblers. It is moving more into B2B sales and through wholesale distributors, increasing sales and reducing logistics and marketing costs at the same time. The company added that in order to remain trading materially in line with projections, the directors decided to not recall their loans to the company at the moment.
The company has issued several convertible bonds. A 6% USD650,000 (GBP496,000) Convertible due 19th July 2024; a 10% SGD250,000 (GBP146,000) Convertible due 23rd February 2026, and; a 10% USD1m three-year Convertible. In April Crushmetric raised GBP53,000 in an equity issue.
Crushmetric opened trading on 10th September at 12.5p. down 37.5% over one-year, and flat over the year-to-date. The company, which listed in May 2014 as Chinese pharmaceutical MiLOC and changed its name and designation in November 2022 has a market cap of GBP30m.
It’s a bit of a quirky investment, but plays into the modern need to constantly fidget (I have children under 16 and can attest to this), as well as the art and design space and is a fascinating company that has tapped into a unique niche market. While its recent financial results have been challenging, the company’s innovative products and strategic focus on product development and market expansion offer potential for future growth. Investors seeking exposure to the art and design space, as well as the growing trend of fidget toys, may find Crushmetric an intriguing investment opportunity.
