Canacords latest update with a more conservative outlook....

Canacords latest update with a more conservative outlook.

"Reality check for our forecasts
The company’s guidance for 2020 has disappointed us.
FLC only gives specific revenue guidance for its Smart Packaged Solutions, with US$32m expected for this year, up by a very modest US$6m, and for Revenue as a Service (up by US$2m).
Our previous forecast for Smart Packaged Solutions was US$110m for 2020.
Now we’ve cut it back to US$40m.
Considering that the current Chinese Five Year Plan (FYP) (2016-21) has an ambitious target to install water treatment in 100,000 villages during this period, fora potential outlay of US$15B, it seems like FLC is only winning a fraction of this massive investment program.
While we have agreed with the company’s view that the capex would be at the back end of the FYP, we expected a much steeper ramp-up this year.
It could be that the investment largely takes place in 2021, or that the competitors are winning most of the business. Either way, the very cautious guidance provided by FLC has to be taken into account."

Canaccord_Colt_FLC_20022020.pdf