Guardforce AI Co Limited

Guardforce AI Co., Limited (NASDAQ: GFAI) is a global security solutions provider. The Company’s business segments include Secured logistics, Robotics AI solutions, and General security solutions. Secured logistics includes services, such as cash-in-transit, dedicated vehicles to banks, automated teller machine (ATM) management, cash center operations, cash processing, coin processing, cheque center, and cash deposit machine solutions (cash deposit management and express cash service).

Recent Business and Financial Updates

• Gross Profit Performance: Guardforce AI Co., Limited ("Guardforce AI" or the "Company") (NASDAQ: GFAI, GFAIW), an integrated security, AI, and Robot-as-a-Service (RaaS) provider, announced significant financial growth for the first half of 2024 (H1 2024). Gross profit surged by approximately 50% compared to H1 2023, with the gross profit margin rising to 18.4% from 12.0%. This notable improvement reflects effective cost-control measures and higher-margin contributions from the growing Guardforce Digital Machine (GDM) and Cash-In-Transit businesses.
• Operational and Financial Efficiency: The Company’s selling, distribution, and administrative expenses were reduced to approximately USD 5.0 million in H1 2024, marking a 25.7% decline from USD 6.7 million in H1 2023. Operating loss significantly improved by 82.5%, decreasing to USD 2.1 million in H1 2024 from USD 11.9 million in H1 2023. Additionally, Guardforce AI reported an adjusted net income (Non-IFRS) of approximately USD 0.1 million in H1 2024, reversing an adjusted net loss of USD 1.8 million from the previous year. The Company ended H1 2024 with cash and cash equivalents of USD 15.5 million.
• Strategic Developments in AI Technology: Guardforce AI made substantial advancements in its AI-driven solutions, particularly the development of GFAI Agents. These agents form the core technological foundation for AI Purchase and AI Travel solutions. Enhancements to the Guardforce AI Intelligent Cloud Platform enable the integration of large language models and third-party APIs, driving the development of customized AI solutions tailored for the retail and travel industries. The Company’s AI Travel Assistant now optimizes travel routes and real-time agenda adjustments, while AI Purchase solutions provide personalized product recommendations.
• Business Expansion and Client Base Growth: In H1 2024, the Company consolidated its legacy business by securing long-term contracts and expanding its client base in the retail and security sectors. Guardforce Cash Solutions Security (Thailand) Company won a five-year contract to operate a Consolidated Cash Center (CCC) in Chiang Mai, Thailand, becoming the largest CCC operator for the Bank of Thailand. Beijing Wanjia Security System Limited secured two long-term contracts, expanding security alarm solutions to an additional 3,900 stores, bringing the total serviced stores in Mainland China to approximately 12,000. Across all operations, the total number of retail stores served exceeded 25,000, marking a transformative milestone.
• Diversification of RaaS Solutions: The Company diversified its existing RaaS offerings by launching innovative solutions. These include “LinguaBot,” a generative AI-enhanced chatbot for concierge services, and the RoboTravel Agent (RTA), an AIoT Robot Advertising solution featuring smart ticketing and promotional capabilities. Guardforce AI expanded its RaaS deployment to over 1,000 RTAs in the Asia-Pacific region and more than 200 in the United States. Additionally, the Company introduced a decentralized spatial computing solution that leverages unused robotic computing power, creating new revenue opportunities.
• Future Outlook: Lei (Olivia) Wang, Chairwoman and Chief Executive Officer of Guardforce AI, emphasized the Company’s focus on consolidating its core business, enhancing its client base, and advancing R&D in AI solutions. By prioritizing high-margin services and implementing cost-reduction strategies, the Company aims to sustain its growth trajectory. These achievements underscore Guardforce AI’s commitment to becoming a leading provider of AI-driven solutions while maintaining a solid and sustainable business model.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 52.50, with expectations of a consolidation or upward momentum if the important support levels of USD 1.80-USD 1.90 hold. Additionally, the stock's current positioning is above both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term support levels.

Guardforce AI Co., Limited (NASDAQ: GFAI) demonstrated exceptional progress in H1 2024, marked by a 50% surge in gross profit and an improved gross profit margin of 18.4%, driven by cost-efficiency measures and high-margin contributions from its Guardforce Digital Machine and Cash-In-Transit businesses. Operational efficiency was evident through a 25.7% reduction in administrative expenses and a significant 82.5% decrease in operating losses, alongside achieving an adjusted net income of USD 0.1 million. The Company advanced its AI capabilities with the development of GFAI Agents and enhancements to its Intelligent Cloud Platform, offering innovative solutions in retail and travel. Business expansion included securing long-term contracts, such as the operation of Thailand's largest Consolidated Cash Center and increasing its client base to over 25,000 retail stores. Furthermore, diversification of its RaaS solutions, including AI-powered concierge services and decentralized spatial computing, positions Guardforce AI as a forward-looking enterprise focused on sustainable growth and innovation in AI-driven solutions.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given for Guardforce AI Co., Limited (NASDAQ: GFAI) at the closing price of USD 1.89, as of January 21, 2025.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is January 21, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.