FLC (ASX) Fluence China

@clotski
I have an investment with Phoslock. They have been suspended for over a year because they were caught up in a fraud scheme by Zhigang Zhang & Ningping Ma, who run BHZQ, which is part owned by BEWG. This is a greed scheme to get money offshore into Australia, they got close to Phoslock, got them some business, got management of the Chinese Phoslock business plus bonus director and sales performance shares. With the business BHZQ got them plus some of the promises that were being made, the Phoslock share price went 10x and they sold around $7m worth of shares. Before suspension some other performance shares were moved around and sold. Phoslock management were also terrible and went along with everything and have all since "retired" since the fraud hit the fan (after also selling shares at the peak). China has limits on how much money locals can transfer out of China. So this meant that these guys managed to get over $10m of basically free money into $AUD.

They also started some business tie ups with CT1 & EVS and were positioning themselves for the same play, with directorships and sales bonus shares, before the Phoslock fraud was found and they had to end their directorships with these companies. Currently, CNQ has just got their first project with them and want to build on that relationship.

If BHZQ were involved with Fluence, I would be screaming at everyone to run for the hills.
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There is no announcement because there is no transaction. No $3m threshold being met. It is just a partnership to look at making MABR fit better into the 14th 5YP for decentralized sewage. It will basically be about making products that fit directly into the bulk tenders that get released, and educating the government about the products so that they are considered on their merits head to head. Instead of just installing some treatment based of upfront cost, look at the OPEX and high quality effluent for reuse that MABR can provide, and have the government write that into tenders, so it is a fair fight.

BEWG are not dummies, they have people watching everything that happens in the industry, they are watching the leaders of every trend so that they can also be a leader. They will be watching Fluence and seeing what is happening with each partner, and they also have business relationships with each partner. Unlike us, the management of BEWG can pick up the phone and ring the head of 3 Gorges, the head of China Rail, the leadership of Hangzhou and Yiyang and ask them exactly how Fluence is performing as a partner and what advantages the technology has. They will be seeing the installations in the Philippines with Manila Water, they will be seeing the large Cambodian installations. They sponsor all the trade shows, they see Fluence winning awards and attend all their talks. They can track their growth. You think if I can find info to try to understand Fluence, that BEWG can't? So this is basically acceptance by the largest water company in China. They are seeing Fluence as a leader in decentralization, and rather than fighting with them or risk other partners making exclusive deals, they are getting in on the action. They are using their HK listed holding company to do it, and using one of their highest ranked technical leaders. This has a different feel to fraud. This feels like acceptance.

For us as long suffering shareholders, we see danger, because we look at the shareprice and get suspicious. In the West we are told in the news that China = bad. But Australia just broke a $90 billion submarine agreement with France, so Australia must also be bad and can't be trusted now? How come other investors on the ASX are not buying the story? How can Fluence be dealing with so many big companies in Asia, have a $190 million US water plant in the Ivory Coast, and still be under 20 cents? But look at Bitcoin, look at Tesla. There can be doubters that keep things low, but once their is acceptance and increasing sales that brings profitability, then suddenly every investor and their dog wants to buy into the action. Since iTEST signed on, there has been real acceptance and growth of the Fluence brand in China, and after Hunan Kaitian, 3 Gorges and China Rail, it is getting to a stage where the industry has just accepted them as a real player. We have not yet seen the real bulk orders (other than iTEST & 3 Gorges), which is why we still doubt. But in my research I keep seeing more and more talk of MABR around compared to before. It might not happen overnight, but things are shifting in a positive direction for Fluence.

Here is another talk that Hang Shijun did.
So Fluence MABR fits into this type of thinking.