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Fluence Corporation
“Landmark” €165m contract win
Update | General Industrials | 04 Mar 2019
The award of a €165m (US$188m) contract to provide water treatment to Abidjan, the largest city in Ivory Coast, is transformative in our view. This turnkey project will supply 150,000m3/day of water to 4.7 million people and include a range of treatment solutions. The win establishes Fluence as a supplier of large, innovative solutions and leads us to double our FY20 adjusted EPS forecast to US$c3.8. Despite organic revenue growth in FY19 and FY20 of well over 50%, the share price implies an FY20 P/E of 7x.
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Fluence Corporation
Delivering on a demanding target
Update | General Industrials | 01 Feb 2019
An impressive Q4 (73% y-o-y organic revenue growth) saw Fluence deliver on its FY18 target. Demand for its higher-margin smart product solution (SPS) remains strong with revenues expected to ‘at least’ double y-o-y in FY19. Its target of EBITDA breakeven by Q419 is reaffirmed and our profit forecasts are largely unchanged. With $38m of net cash and growing evidence of execution, we believe investors can now focus on the long-term growth story.
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Fluence Corporation
Debt facility in place for custom projects
Flash note | General Industrials | 30 Nov 2018
Fluence has signed an agreement with an undisclosed US-based finance company for a $50m non-recourse debt facility specifically to fund the upfront build costs of custom projects. This pre-packaged source of funding accelerates its ability to secure and deliver these projects. On top of $23m net equity proceeds raised last month, it provides an additional source of financing for its expected growth.
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Fluence Corporation
Delivering on expectations
Update | General Industrials | 02 Nov 2018
Q3 saw Fluence delivering on expectations. It signed its first multiproduct Aspiral deal in China ($45m), reported in-line revenue (up 140% y-o-y) and held FY18 gross profit guidance. An equity offer raising c $23m (net) should address any funding concerns. Capital raising aside, our forecasts are unchanged; the company still has to deliver a strong Q4, but following the China deal, confidence in the long-term story should be growing.
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Fluence Corporation
China Contract catalyst?
Flash note | General Industrials | 15 Oct 2018
Fluence has secured a deal for its Aspiral product in China that should generate at least US$45m in revenue over the next three years. This deal is significant as, aside from the financial benefit, it demonstrates the size of the opportunity for Aspiral in China. Greater investor confidence in Fluence's prospects here could drive a sharp re-rating of the shares, in our view. We make no changes to numbers now but will review estimates after the Q3 trading statement.
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Fluence Corporation
Time for better treatment?
Initiation | General Industrials | 26 Sep 2018
If Fluence can deliver on its H218e target, its shares could re-rate sharply. Its membrane-aerated biofilm reactor (MABR) technology provides a competitive advantage in the growing market for decentralised water treatment. We see the ramp in sales here transforming its scale, revenue visibility and profitability by FY20e. The shares currently trade at a 28% discount to peers’ FY20 EV/EBITDA and a DCF approach, which assumes delivery in H2 and beyond, suggests value up to A$0.85 per share.
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Fluence Corporation
Q2 trading update
QuickView | General Industrials | 30 Jul 2018
Fluence's Q2 statement confirms FY18 guidance and highlights encouraging progress in China. The company still has a lot to deliver in H218, but the fundamentals of its market (the supply of distributed water/wastewater treatment) look very attractive, in our view.
