3 Wastewater Treatment Related Stocks Expanding their Operations – CLQ, FLC and DEM

  • Nov 11, 2019 AEDT
  • Team Kalkine
3 Wastewater Treatment Related Stocks Expanding their Operations – CLQ, FLC and DEM

Government authorities all over the world are facing huge challenges in providing clean water to the general public. The rise in the population has further increased the pressure on authorities. Wastewater treatment solutions are the answer to these problems. In Australia, there are several wastewater treatment companies who are in the process of expanding their operations. Let’s take a look at few 3 wastewater treatment related stocks trading on ASX.

Clean TeQ Holdings Limited (ASX: CLQ)

CLQ Announces acceptance of world first CIF® plant in Oman

Innovative wastewater treatment solutions provider, Clean TeQ Holdings Limited (ASX: CLQ) has achieved a successful customer acceptance of world first Continuous Ionic Filtration (CIF®) plant in Oman.

As per the update provided on 11 November 2019, Clean TeQ Holdings Limited has received confirmation from the customer that the plant is performing to expectations. This is a strong validation of the company’s proprietary ion exchange technology and is demonstrating the capability of Clean TeQ’s team in designing, constructing and commissioning effective, tailored industrial water purification and metal extraction systems.

Accordingly, Clean TeQ has now officially handed over the plant to the customer, who is now responsible for progressing the remaining commissioning and ongoing operational processes.

Clean TeQ Continuous Resin-In-Column Ion Exchange plant in DRC (Source: Company’s Reports)

The CIF® plant is designed to remove a range of deleterious elements from up to 200 tons of waste water each day. Through this, the customers are able to recycle a significant proportion of the water, providing a valuable cost saving for the customer in a geographic location where water is relatively scarce. This also has environmental benefits as it significantly reduced the volume of waste which would otherwise need to be disposed.

Now that the company has received the customer acceptance of world first CIF® plant, it will be seeking to maximise the leverage of this success to continue to grow its business.

Clean TeQ Forward Plan

  • The company is now focused on completing two additional key projects at the Fosterville Gold Mine in Victoria, Australia and at a copper-cobalt mine in the DRC.
  • These two Clean TeQ systems, along with the plant recently completed in Oman, are the first of their type anywhere in the world and have been deployed as part of three different technical solutions.
  • The successful delivery and commissioning of these three plants will provide strong demonstration of the efficacy of Clean TeQ’s suite of proprietary ion exchange technologies and their versatility for metal extraction and wastewater treatment.

In the last one year, CLQ stock price decreased by 53.40% (as on 8 November 2019). At market close on 11 November 2019, CLQ stock was trading at a price of 179.15 million, up by 4.167% intraday, with a market cap of around ~$179.15 million.

Fluence Corporation Limited (ASX: FLC)

A leader in the decentralized water, wastewater and reuse treatment markets, Fluence Corporation Limited (ASX: FLC) is operating in over 70 countries worldwide with established operations in North America, South America, the Middle East, Europe and China.

FLC recently announced the execution of a USD 3 million follow on order from a subsidiary of ITEST. The units under the order will be deployed at service stations and toll stations along highways in Hubei province.

September Quarter highlights of FLC
  • During the September quarter, the company announced two additional multi-year supply agreements for MABR products in China, demonstrating significant progress in migrating the business model towards the higher growth and higher margin pre-engineered Smart Products Solutions segment.
  • During the quarter, the company also received an emergency order for five NIROBOXTM from a customer in the Middle East. The company’s NIROBOXTM product is pre-engineered, which allows for very rapid deployment, which no centralized custom solution could ever match.
  • Pre-engineered Smart Products Solutions revenue was US$7.3 million in Q3 2019, representing 189% Y/Y growth.
  • Demand for NIROBOXTM was another bright spot in the September quarter with seven units ordered.
  • The company reaffirmed its revenue guidance of USD 26 million from pre-engineered, standardized Smart Products Solutions for 2019, which implies segment revenue of US$13.1 million in Q4.

2019 Outlook

  • Pre-engineered, standardized Smart Products Solutions revenue is expected to be USD 26 million, representing 18% Y/Y growth;
  • Secured annual recurring revenue is expected to increase by the end of 2019; and
  • Sustainable EBITDA profitability is expected to occur in Q4 2019, assuming financial close for Ivory Coast is achieved in Q4 2019.

In the last one year, FLC stock price has increased by 8.75%. At market close on 11 November 2019, FLC stock was trading at a price of $0.435 with a market cap of around ~$269.38 million.

De.mem Limited (ASX:DEM)

Singaporean-Australian decentralised water and wastewater treatment business, De.mem Limited (ASX:DEM) operates a wide range of water and waste water treatment systems for its clients.

Today, the company announced its first revenues from its recently launched 5-stage domestic water filtration system, based on its innovative hollow fibre membrane technology.

New 5-stage consumer water filtration system (Source: Company Reports)

De.mem has received an initial order of around $55,000 for the new product from its Singaporean distribution partner. The company also expects repeat orders of a similar magnitude from Singapore in regular intervals.

Andreas Kroell, CEO of De.mem Ltd, commented:

“The order received from our Singaporean distributor shows how quickly we are able to grow sales and production since the launch of this new product line”

Sales Strategy of De.mem Limited
  • The company sells its consumer water filtration system through a third-party sales distribution model which creates high sales leverage and high cash generation;
  • The sales partner purchases and pays for the systems upfront, creating a neutral working capital sales cycle for De.mem and transferring sales overheads onto the sales distribution partner;
  • mem is able to replicate this sales model with several other distribution partners, creating a high sales leverage model for De.mem in all its target markets.

The company is currently planning to broaden its consumer product sales channels by forming more distribution partnerships throughout the Asia-Pacific. Currently, De.mem is aggressively pursuing various partnership opportunities.

Notably, in the last six months, DEM stock price has increased by 140% as on 8 November 2019. At market close on 11 November 2019, DEM stock was trading at a price of $0.295, down by 1.667% intraday, with a market cap of around ~$46.43 million.


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