Hearing health technology company Audeara (ASX: AUA) has received its first order from Taiwan Stock Exchange-listed audio equipment developer Eastech Holdings in a major step for the Brisbane-based company’s entry into the Chinese hearing-aid market.
Eastech’s China subsidiary has placed an initial order for 1,000 hearing aid technology licence keys with Audeara which the technology scale-up describes as the "first commercial traction with a counterparty in a major market".
Under the terms of the licensing agreement, Audeara will provide proprietary technology and engineering services to Eastech for use in the design and manufacture of hearing devices.
While Audeara has yet to determine the value of the deal, the company says the final product will be sold through a third-party purchaser and has the potential to reach “millions of Chinese consumers” as the products will be subsequently retailed on Chinese e-commerce platforms such as Tmall, JD.com and Pinduoduo.
“Securing this first order is a significant milestone for Audeara,” says Audeara CEO Dr James Fielding.
“It demonstrates the commercial traction of our technology and the strength of our collaboration with Eastech in bringing personalised hearing solutions to one of the largest healthcare markets in the world.
“Our technology is now being released to Eastech, ahead of production and a broader launch later this year. We look forward to providing additional updates on developments in the coming months.”
Audeara, which was founded in 2015 by Fielding, Dr Chris Jeffery and Alex Afflick, has made inroads into international markets with its products stocked in Europe, the US and Asia.
The company also has partnerships with three top-tier global audiology brands Amplifon, Demant and WS Audiology.
In 2023, Audeara entered a research and development agreement with Taiwan's largest audiology clinic Clinico to develop an in-ear earbud device.
The company’s technology uses a hearing profile algorithm that personalises the sound output to the needs of the individual, allowing its headphone hardware to adapt to the hearing capabilities of the user.
The distribution agreement with Eastech was struck last year, with Audeara noting that China represents a “substantial long-term growth opportunity” for the company.
Audeara says that in 2019, an estimated 426.5 million people in China were affected by hearing loss, including over 95 million with moderate to severe hearing impairment. The numbers are expected to grow to 561 million by 2034, or 40 per cent of the population.
The licence keys are being sent to Eastech facilities in China, ahead of first production starting in the next few weeks, before a broader product launch planned for the current quarter.
Audeara says it will update the market on sales volumes and revenue contribution as the partnership progresses.
“As disclosed at the time of signing, the licensing agreement provides for Audeara to receive royalties per unit sold,” says the company.
“There are no minimum purchase obligations, and the financial impact of this initial order is not considered material in isolation.
“Future financial impact will depend on the level of market uptake and the volume of subsequent orders.”
Audeara posted an 18.8 per cent increase in revenue to $3.78 million and a bottom-line loss of $1.78 million in FY25.
However, unaudited revenue for the FY26 September quarter of $1.05 million was up 46 per cent from the previous June quarter.
This was led by “strong sales into Australian wholesale channels” as well as the receipt of payment from a follow-up order from musical instruments manufacturer Avedis Zildjian which was among the first of the company’s white-labelled product design and manufacturing deals outside of the health sector.
Shares in Audeara were trading 33 per cent higher to 3.6c each at 11.58am (AEDT).
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