Fluence Corporation

AU: FLC

AU$225.7m market cap

AU$0.42 last close

Fluence is a global supplier of water and wastewater treatment solutions. Its decentralised products provide municipal customers with ‘plug and play’ solutions that are both quicker to deploy and substantially cheaper than traditional alternatives.

Investment summary

Fluence has signed a Memorandum of Understanding (MoU) to deliver over 250 Aspiral wastewater treatment units to a Chinese partner (Kaitian) and is establishing a local final assembly facility in Yiyang to meet this demand. This is its second high-volume contract in China and, following the recent SUBRE order, provides evidence of both the significant potential of this market and the progress Fluence is making. With a market cap of c US$150m, the full value of this opportunity is not currently reflected in Fluence’s valuation, in our view.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 33.2 (23.6) (21.7) (7.0) N/A N/A
2018A 101.1 (8.5) (10.5) (2.5) N/A N/A
2019E 120.0 (7.5) (9.8) (1.8) N/A N/A
2020E 207.3 5.7 3.2 0.6 47.5 N/A
Last updated on 13/09/2019
Industry outlook

Fluence’s ‘plug and play’ solutions can cost-effectively boost the performance of existing centralised treatment plants and address unserved, greenfield rural populations. Aspiral and SUBRE are based on a proprietary technology (MABR) that offers both superior treatment and lower energy costs. We see rising government spending on rural wastewater treatment in China as a particularly large opportunity.

Last updated on 13/09/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (US$m) 0
Forecast gearing ratio (%) 0
Price performance
%
1m
3m
12m
Actual (2.3) (2.3) 5.0
Relative* (4.2) (4.6) (3.3)
52-week high/low A$0.6/A$0.3
*% relative to local index
Key management
Henry Charrabe CEO
Richard Irving Executive Chairman