Ann: Agreement for anticipated Aspiral China sales approx USD45M, page-159

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30/03/19

08:22

Post #: 37935801
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Originally posted by Relax1: ↑

There should be 5 highway systems in Hubei where iTEST will be installing the Aspiral units under the contract. The Xiaogan test site where our Aspiral units were first installed is indeed on the G4 expressway.

The service centre management company related to iTEST has around 105 service centres under management (+ building more, + parking areas, + toll & monitoring stations). The 105 service centres represent around 80% of the service centres in Hubei Province.

There are over 2000 service centres in the Chinese national expressway service area network. There are also hundreds of parking areas and thousands of toll & monitoring stations.

Jurisdiction stops at the provincial border. For example, heading north up the G4, the first service area across the border in Henan is Lingshan Service Area. It is under the management of Henan Transport Investment Expressway Service Area Management Co Ltd, which is similar to the Hubei Provincial Communications Investment Group that are the parent company of iTEST. If you head south via the G4 across the border into Hunan, the first service areas come under the management of the Hunan Provincial Expressway Administration.

The reason why iTEST have been advertising MABR at China Highway and Transportation Society meetings is in order to reach out to the decision makers of other provincial service area management companies. Hubei Provincial Communication Investment Group (iTEST's parent) are considered one of the top transportation groups in China, so they are respected by other transportation groups and the solutions they adopt are viewed as class leading.

By partnering with iTEST to adopt MABR, other less well resourced transportation groups can adopt a proven solution that has passed multiple environmental standards tests in Hubei, without having to invest the time, expense and resources into testing units themselves. The China Highway and Transportation Society managers/experts have also visited Xiaogan and been through the data, and they deem it fit to promote nationally.

For iTEST (+ subsidiary Xiecheng Environmental Protection Company) the benefit of selling MABR into other highway systems, is to grow the scope of their environmental business and establish their credentials. Eventually they will want it to take on the guise of a full scale national environmental company and will then likely start bidding on non-service area related projects. It is similar to Hassan Allam in Egypt using Fluence as a technology provider for desalination equipment while they do the construction. Chinese state owned enterprises want to transition their subsidiaries to operate as standalone profitable businesses, so iTEST is using MABR technology in order to grow their revenues and name recognition.

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Amazing research as always @Relax1

That was my first thought the moment I saw that iTest wanted exclusive rights to install Aspirals in highways in Hubei... they saw a new technology they could utilise to take their own business to the next level by locking in a competitive advantage from the outset.

If they want to expand this outside of Hubei or to areas outside or highways, I suspect a new expanded agreement would need to be struck with Fluence... and the minimum spend to keep these exclusive rights would be significantly higher than US$45m.

The speed in which iTest is moving with this is great to see, and having their brand/company doing the promotion work for us is something money can’t buy.

FLC Price at posting: 50.5¢ Sentiment: Buy Disclosure: Held
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Ann: Agreement for anticipated Aspiral China sales approx USD45M, page-159

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Ann: Agreement for anticipated Aspiral China sales approx USD45M, page-159

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