It's fair to say that the pandemic has turned a lot of investors off small cap infrastructure companies as there are structural barriers in this type of economic climate (govts prioritising health/welfare over new large infrastructure projects).
But as the world finds an equilibrium with COVID and vaccines are rolled out... confidence will return and governments will be able to stimulate the economy by creating jobs through infrastructure spending rather than just printing money.
China is also recovering from/handling the pandemic much better than Western countries and the latest 5 year plan (2020) has highlighted increased urbanisation and improving the quality of life of these residents (more residents will live outside of large cities, meaning infrastructure spending in urban local govts) and greener technology. More details will be announced in March 2021 when the final plans are put into action (currently still being drafted).
China's new 2020 five year plan
Also China is already softening its stance with Australia from a trade perspective... they are suffering from black outs and energy shortages that will mean they will need to start buying more AU coal and bridge the divide. Relations are likely going to improve rather than worsen with China IMO.
Water scarcity is only going to get worse globally, Australia just experienced a severe drought that only broke early 2020 and we are now in a wet spell... more water than our dams can hold! But that means other continents are entering a severe drought in the coming years and will again highlight water scarcity and the need for a decentralised approach.
But the lack of new announced partners or bulk orders from China due to the pandemic has probably been the greatest detractor of value to FLC. 2020 was going to be a year of growth in China with partnerships looking to continue their bulk orders (such as iTEST), but unfortunately that did not happen. I guess the next best thing is that we saw two very important pilots get underway in the first half of 2020, which would have generated data that can now be used by Fluence in 2021 to secure new partners/bulk orders. We may just see our existing and new partners all picking up at the same time in 2021.
From an investor standpoint though, the significantly increased cash buffer, I conservatively estimate approx 10 quarters remaining @ US$5m cash burn, but realistically the cash burn is likely to get closer to break-even in 2021 with both the Ivory Coast now cash flow positive and more streamlined business model reducing quarterly cash burn. And with a debt facility that can be expanded to US$50m, I really can't see a need for a cap raise in the next few years (unless we need it for a massive increase in production).
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