Fluence is a specialist in 'decentralised' water treatment plants (desalination, waste water treatment etc) servicing a variety of industries, including municiple, industrial, mining, power, agricultural.
Combined through the 2017 merger of ASX-listed Emefcy and US-based RWL. The former providing the technology and product, and the latter providing the industry presence. RWL has conducted over 7,000 installations with operations in 70 countries.
Products/solutions are centred around a patented Membrane Aerated Biofilm Reactor (MABR). They are fast to install, cost effective to run, and a proven technology (reliable).
The company claims a huge addressable market, and to be a global leader in this niche. China especially represents a significant market opportunity, and Fluence has secured important partnerships and early sales. (ASX 1/6/18 annnouncement.) China's 5-year plan has given US$15 billion in funding for rural wastewater treatment, and Fluence says it is well positioned.
There is a strong thematic tailwind with water shortages, rising waste volumes, global food production. Further, existing infratsructure is costly to maintain and uncompetitive in many cases.
The business is expected to deliver around $110m in revenues this financial year (end Dec 18) 70% of which is already contracted (this was reiterated in late July 2018, here). It expects to be profitable "at some stage" in FY19. It has around US$40m in cash, and burning through around US$14m per quarter, at most recent quarter.
Expect sales cycles to be long, and revenue recognition can be lumpy.
In many ways, Fluence is similar to another recommendation Envirosuite (ASX:EVS). A great product, huge addressable market, fast growing sales -- but with a fast eroding cash pile and potential disappoint with ambitious targets. But also with significnat upside if they can scale the business well.
I'd class as a high risk investment, but seemingly worthy of acquiring a modest parcel. See my forecasts page for my valuation.
I'd welcome any insight other members might offer!