Likely to be some change after the financial close of the Ivory Coast project. A fully funded $185 million USD project on the books cannot be ignored, especially as this will be a big driver of profitability. The market is still pricing in the risk of this not closing, or potential delays.
The market is also pricing in risk in China, of the announced growth not occurring. There is only 1 large contract the market is fully aware of in the iTEST 3 year, minimum $45 million USD contract. It seems the faith in iTEST meeting this target is not fully there, or that the circa $15 million per year is not enough to get the market excited. From my research I have more faith in the growth in this contract, plus the addition of a few more of similar size or larger (eg Zhejiang Tiandi). If there are a few large contracts signed later this year it will give the wider market more confidence of wider traction in China.
Risk in cashflows and future profitability is also priced in. Getting to EBITDA profitability in Q4 will help to alleviate some of this concern.
Any traction of full sized SUBRE plants will also help, plus additional growth in any custom or recurring revenue projects.
Breaking into the US market, plus orders in Australia would also help. Fluence is still a company full of potential, rather than a company that is currently and visibly selling a consistent amount of product/projects in its target markets. By the end of this year we will hopefully see that change.
The story is hard to sell until profitability. People in the west don't really take notice of this market, as access to potable water, and treatment of sewage is taken for granted and is an expectation. As we can see on the register, it is the overseas, mainly US based sophisticated investors who have taken up positions. We will benefit if at some point Fluence enters the ASX300 then ASX200 and local index tracking funds are forced to take a position with limited shares on offer.
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