The water business is an essential business but a poor economics business. Return on Capital on a risk adjusted basis is really a joke. Margins are thin for the risk that EPCs and BOTs take. Consumers don't want to pay higher tariffs and politicians have no gumption to raise it. There are tens of such companies listed in Singapore and more than 30 over listed in HK and they are are not all performing.
The only reason I am in FLC is because of MABR and the decentralisation theme, and of course, China. If and when MABR takes off, the margins will expand. If the decentralisation theme takes off, it will be a secular change that is so structurally different the trend will be decades long. If China embraces technology which they are pre-disposed to as shown, they will make MABR the standard like they did to 5G and mobile telephony.
Now with all the above points in themeselves are structural in nature, why would we expect returns to be quick and furious? It takes a lot of time to get to that inflexion point. In the same vein, when the trend starts to move north, don't expect the price rise to be short term in nature. It will be multi-years in the making. Don't be so quick to get off the rising lift too early.
I hate to say it, invest in FLC and the type of business it is in, it's a marriage for the long haul. That's just the way it is with investing in this sector.
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