Good evening fellow EMC'ers
I attended a long but enjoyable EMC investor roadshow lunch in Perth this afternoon. Ross and Richard from the company were in attendance along with approximately 12-15 other people. It was great to meet
@RickDipper and as always a pleasure to catch up with
@ryan1986 and
@yysy.
I thought I would jot down a few key points summary of the event. I didn't take any notes so everything is from the memory bank, so for those in attendance feel free to add/correct anything!
- China has been the main focus over the last 3 months. It is a $20bn opportunity over the next 5-7 years and they can't afford to waste any time.
- The three agreements signed with the Chinese to date are not likely to provide the company with $100m's worth of sales. These partners will help generate sales, but importantly will serve as valuable near-term demo plants across China and will allow the company to get provincial certifications as soon as possible. The company is currently in negotiations with larger Chinese partners who have closer connections with the government and will likely provide many more sales $ down the track.
- Company expecting to require more than one plant operating line by end of 2017 (ie. over $100m+ in sales). First plant expected to reach China by May next year and ready to be in production by end of June 2017. Appears as though they will really hit the ground running when the plant is up and running mid next year and they have provincial certification.
- China product gross margin is about 50%
- Rest of developed world product gross margin is 60-65%
- WaaS first contract and JV funding partner still on track for end of 2016. I asked why the WaaS timelines in the latest presentation was removed but was assured they are keeping to or are in front of published deadlines.
- JV funding partner is ready to go, just awaiting the finalisation of the first agreement before it is announced.
- Company wants a demo plant installed in California ASAP. First plant may be provided free of charge (potentially written off as a marketing expense) to a high profile customer who will in turn provide excellent PR for the company as well as it being a very useful reference site.
- Robert Wale (EMC director) is currently in the US and is the interim WaaS GM focusing all his time towards this part of the business
- EMC is in discussion with at least three Fortune 50 companies in the San Francisco bay area who are aiming to be net-zero water recyclers across their campuses/buildings
- Company needs to increase the number of personnel within the business. The stressed the importance of quality personnel so won't hire just anyone. Acquisitions were also mentioned as a possibility in the future but this is currently not in the pipeline.
This is the third EMC presentation I've attended this year and once again I was left very impressed and am very comfortable for EMC to be my largest shareholding. There is so much more to come, and as Richard mentioned today, we are only at the beginning of the journey.
Cheers
(20min delay)