Renewable players - any thoughts on whether CFU can really challenge CWR for its Fuel Cell Crown?

Link to CFU's Homepage -

http://www.cfcl.com.au/

See post 112 first.

History will soon repeat itself, because the Q1 2010 cash burn was 4m. This only leaves enough cash at that burn rate to last until mid-November 2010. Meanwhile CFU sales of single units into trials won't see any sales from those trials until the trials are completed, the trouble is they all kick off in Q2 2010 or later and are all scheduled to last for 12 months to 24 months, so no sales there until after CFU run out of cash.

Aside from existing trials, the CEO has stated in RNS that he only expects to sell 'a couple of hundred units in 2010'. This won't cover the operating costs because CFU need to sell 2,366 units at 40% margin just to cover the current burn rate.

IMVHO CFU will need to raise enough cash to last until they can reach break-even.

The CEO says he 'expects to sell a couple of thousand units in 2011', which is a possibility if they can convert the one year trials into orders when they fininsh in Q2 2011 or later. The thing is, it's not guaranteed that they will, or even if they do, that they will then sell enough units to reach break-even in 2011.

Therefore I believe CFU will need to cover themselves for cash into mid-2012, by which time some of the longer term deals should bring in some sales and they should make it to break-even.

The result of my research outlined above, is that CFU will need to raise 16m to get to Nov 2011, and a further 10m to reach break-even in mid-2012.

So following the 'history repeats itself' refernce post 112, I see CFU raising 26m very soon. This is a huge amount to raise. It will have to be done at a big discount to the current share price. It will create huge dilution for shareholders.

I see CFU as a sell. Buy back after the fund raising with a view to profitability in H2 2012.

You might be interested in the Hoodless Brennan view of mCHP.

29/06/2010
AFC remains the forgotten fuel-cell in institutional investors who seem fixated on Ceres and CFCL. Sooner or later they will have to recognise the opportunity for AFC is more realistic with Chlor-Alkali producers and Underground Coal Gasification than with consumers replacing boilers Continued SPECULATIVE BUY.

http://www.hbmarkets.com/stock-research-prices/small-cap-flash/read/

Check out an interview with the CEO of CFU.

Click here

Listen to an interview with Bob Kennett, CEO of Ceramic Fuel Cells Limited

Click here to listen

I see someone else has had the same idea in the past... they've just brought out another interview about the cashflow for the quarter ended 30 June in London South East interview with CEO

LISTEN: Bob Kennett, CEO of Ceramic Fuel Cells, discusses cooperation agreement with Synergy

Click here to listen

LISTEN: Ceramic Fuel Cells Limited #CFU - CFU to sell its powder plant assets

Click here

LISTEN: Ceramic Fuel Cells Limited #CFU - Fundraising announcement

Click here to listen