Ann: Fluence Business Update, page-35

Just re-read the Appendix 4C - Quarterly Q3 and Commentary.

Then re-read the Fluence Non-Deal Investor Presentation released 11th of November.

Finally re-read the Canaccord Genuity report.

Whilst the slippage of $30M in revenue from CY17 to CY18 is not ideal, this was alluded to, then re-iterarted and re-inforced by management in both the 4C Sept quarterly and non-deal IR Hong Kong investor presentation. In other words, nothing new - the market and all of us should have expected this slippage (just perhaps the size came as a surprise).

The fact, though, that we have $75M in backlog revenue expected to be 'earned' in CY18 (with a further $20M rolling in CY19) is staggering given this figure does not include any new projects, i.e. organic revenue growth, won in CY18.

In other words, if we fully converted the backlog of $75M in CY18 and did not even grow organic revenue in CY18 by anymore than CY17 (i.e. we generated new CY18 revenue, separate to the backlog) of $60M, which is CY17's revenue, then we are already hitting $135M in revenue in CY18. Then, if we assume we can generate organic revenue growth of 20% (which the company has outlined several times, most recently in IR hong kong deck, as its yoy target), then we are adding the $75M backlog + ($60M * 1.20) new CY18 revenue = $147M in revenue in CY18.

So, as per @Dungiven 's prior post, even if we apply 20% revenue growth to the downgraded CY17 revenue of $60M as opposed to $90M, we are still beating our forecasts of $141.7M in CY18.

I very much agree with @pedrobolony; if you claim to be a long term shareholder, you must learn to look beyond the share price and short-term hiccups (i.e. slower ramp in China and slippage in projects from CY17 - CY18) and rather look at the fundamentals of this company. I am not saying the recent share price movement is not testing, and does not make me second guess my conviction and investment thesis - but one must remember a very important lesson from Phillip Fisher:

"The market is inherently short-sighted. Consequently, the best time to purchase a quality, growth company - like when [he] purchased Texas Instruments - is when a once-off, short-term anomaly arises in the company's operations which disrupts the broader markets near-term forecasts and causes the financial community to unfairly punish a, fundamentally, sound business."


And from Warren Buffett:

"When Wall Street is bullish on a company, it is most likely too expensive and one should wait for a greater margin of safety. When the Wall Street is running for the exits and general sentiment is bearish; one should - given appropriate research - stay steadfast to their convictions and act in a contrarian manner.'