It sounds like Tim is also getting frustrated at the delays...

It sounds like Tim is also getting frustrated at the delays landing significant contracts. At least he gets a large wage and free shares to ease the angst. Can only hope that UL Certification is all that is holding up progress in US. It sounds like they feel close in Qld but can’t motivate the bureaucracy despite highlighting Redflow’s Qld origins and benefits for Qld zinc usage. The Qld government will no doubt make a ‘song and dance’ when they do announce any battery projects, so Tim’s communicated frustration indicates that there is currently no timeline for any decision and no certainty that Redflow will play a role. In the meantime cash reserves continue to dwindle as we strive for take-off. That makes it a very speculative stock.

Also found this statement in Tim’s AGM speech of interest:

‘The prices of the Tesla Megapack … are now US$538 per kWh…… we are well placed, with a current price that only presents a modest premium to the Megapack and a levelized cost of storage that is competitive.’

So our price might be around say US$600 per kWH or around A$8000 for a 10kw battery. I take it that’s retail price, so Redflow might get say A$5000 as its share. If it costs A$3000 to manufacture that’s a $2000 EBIT.

Tim may be overly optimistic (he has been to date) but these were his output comments with the AGM :

‘Executing on our plan to scale-up our proven ISO9001 manufacturing facility in Thailand to 80 MWh per annum as customer demand and orders are realised. On top of this, we are developing a pathway to scale-up to 500+ MWh in the next 2 – 3 years, and are developing contract manufacturing options in parallel.’

If they can get even halfway to the 80Mwh (say 40 MWh) in the next 18 months that would be 4000 batteries, gross sales of $20m and EBIT of $8m. Then there is the ramp up that Tim alludes to, and some very rough figures in the table below.

No Batteries Revenue EBIT

40MWh 4000 20 8

80 MWh 8000 40 16

200MWh 20000 100 40

400MWh 40000 200 80

There would be Capital expenditure required for any ramp up to occur, so either joint ventures, more issues or takeover. All speculation and guesswork.