Co. Collaborating on Major Climate Risk Modeling Project

Aisix Solutions Inc. (AISX:TSX.V; AISXF:OTCQB), a frontrunner in using artificial intelligence (AI) in climate risk assessment and modeling, announced it is collaborating to develop a product to evaluate and manage the impacts of climate change on physical assets across Canada.

The project aims to develop a minimum viable product (MVP) at first, which it will then expand to leverage its advanced climate-related data and expertise to assess risks from extreme weather events and global temperature change scenarios that are driving major changes in the insurance industry and derivative markets.

"We are proud to contribute our expertise to this vital initiative," said Aisix Chief Executive Officer Mihalis Belantis. "Understanding and mitigating the risks posed by climate change is essential for the resilience of financial institutions and their clients, and our advanced climate-related data is an undeniable tool that will shape the future of risk assessment and mitigation."

The project will be conducted in close collaboration with a major consulting firm, the company said, ensuring that the MVP "aligns with the industry's needs and standards while fostering innovative approaches to climate resilience."

"The outcomes of this project are expected to provide significant insights and tools that will aid businesses in assessing and adapting to the challenges posed by climate change, thereby supporting sustainable growth and development," Aisix said in a release.

Aisix leverages AI, data analytics, and real-time climate risk assessment in its software solutions, the company said. With these tools, individuals, businesses, and governments around the world can more easily manage their climate risk and ultimately protect their property and infrastructure.

The Catalyst: Companies Facing More Climate Risk

The climate risk digital solutions market was worth US$880 million in 2021, Verdantix reported. It predicted the market will reach more than US$4 billion in 2027.

Weather disasters "carry an outrageously high price tag," WTW reported last November. "Worldwide, the economic cost of weather and climate disasters was nearly (US)$1.5 trillion over the decade 2010-2019. So far in 2023, the United States has experienced 23 separate billion-dollar disasters, the highest number ever (and the year is not yet over)."

Technical Analyst Clive Maund rated the stock a Strong Buy for all timeframes.

But for those hedging against weather risks in business, derivatives (contracts deriving their value from performance of underlying entity) can also be an option. According to a report in Bloomberg earlier this month, demand for weather derivatives is "surging."

"Average trading volumes for listed products jumped more than 260% in 2023, according to the CME Group, with the number of outstanding contracts currently 48% higher than a year ago," Bloomberg reported. "And that publicly traded corner could make up as little as 10% of all activity, according to industry estimates; outstanding derivatives may be worth as much as (US)$25 billion based on notional value."

According to Bloomberg, "part of the jump in demand is driven by corporations newly confronting their exposure to the elements."

In March, the U.S. Securities and Exchange Commission finalized rules making it mandatory for companies to publish information on climate-related risks and any mitigation steps they've taken.

"All of these companies have weather risks that they're not hedging, and now they have to deal with it," Nicholas Ernst, managing director of climate derivatives at BGC Group, a market intermediary, told Bloomberg. "We're starting to move into this much larger financial market."

Company's Work Is of 'Central Importance,' Analyst Says

What Aisix is doing "is of huge and central importance going forward" for companies dealing with the effects of climate change, said Technical Analyst Clive Maund.

"The ability to predict and prepare for various climate and weather events and possibly emergencies in real-time and for different timeframes is of paramount importance for governments and various agencies who are obliged to plan ahead and also for individual businesses and private citizens," Maund wrote on March 5.

"Since coming to market a little over six years ago, Aisix stock has been subject to wild swings, with its overall trend being slightly lower up to now," Maund noted.

The stock has gone on to complete a Cup and Handle base "with persistent high volume on the rally to complete the right side of the Cup part of the pattern," he said. "We are seeing high upside volume again so far this year as the price starts what should turn out to be a 'breakout drive' out of the entire base pattern."

The analyst rated the stock a Strong Buy for all timeframes.

"The 'cherry on the cake' for buyers now is that the price of the stock has dipped back from 7 cents . . .  to the current 4.5 cents (at the time of writing) to provide an excellent entry point," said Maund.

Ownership and Share Structure

As for the ownership of Aisix, two insiders hold 10.38%, or 9.71 million shares, of the company. They are CEO and Director Belantis with 8.58% or 8.32 million shares and Cofounder and Director David Poole with 1.8% or 1.39 million shares.

Retail investors own the remaining shares as there are no institutional owners.

In terms of structure, Aisix has 96.96 million shares outstanding and 87.25 million free-float traded shares.

The firm's market cap is CA$4.36 million, and it trades in a 52-week range of CA$0.03 and CA$0.13 per share.

Important Disclosures:

1. Aisix Solutions Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
3.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Contributing Author Disclosures

1. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.