Date : 20/11/2020

Fast Brick Robotics

ASX :

FBR

Market Cap : $95.64 Million

Buy

52 Week Range : $0.01 - $0.105

Share Price : $0.046

FBR has a very unique technology and the potential to disrupt the construction industry. We expect significant progress to be made once the pandemic is behind us. We recommend members to "Buy".

Company Analysis

FBR Limited (ASX: FBR) is using robotics to disrupt the construction industry. Their Hadrian X has also completed the full construction several house structures. Our first coverage of FBR was back in September when the stock was trading at $0.061 a share. Fast-forward ac couple of months, the stock is now priced at $0.046 a share. Financially, everything remains the same for the company since our last report. But, given how nascent its technology is in the real-world, investor mood and momentum sways – which results in volatility in the equity markets.


Source: Tradingview.com

The general outlook of the construction industry is good with the government economic policy looking to create jobs by supporting the infrastructure projects. FBR’s Hadrian technology does not create jobs, but rather taken some away. This is one of the many rationales why investor moods sway in the short-term.

On the flip side, FBR is an early stage company that will slowly enter the market by taking on limited projects and then turn into a disruptor. We believe the disruption in the future is inevitable as FBR brings a lot to the table for the construction industry:

  • Lower Operating Costs as one machine is capable of doing the work of several humans
  • Higher efficiencies in operations
  • Development flexibility
  • Reduction in human errors

We do not expect the firm to generate positive cashflows for the first few years. The firm has raised $16 million of funds in August to support its operations and help reach their next milestone. Globally, these types of nascent technology companies with market caps of less than $100 million are usually private entities moving forward with venture capital money supporting them. In Australia, the ASX is home to quite a lot of these early stage firms, giving investors an opportunity to get in on the action early, albeit with a long-term strategy in mind to maximise risk-reward ratio.

Technology sector experience, technical expertise, risk management and governance, and fundraising experience for both – equity and debt are important for a firm at the state in the business lifecycle FBR finds itself in. The board of directors ticks all these boxes with a good mix of skills to complement each other.

Updates

The Hadrian X has recently completed the construction of a two-storey building structure, for the very first time. Concrete pillars, suspended slabs and rebar were used in the construction. This is an important achievement for the firm. The construction of this type of structure has the potential to attract interest from emerging market regions such as South East Asia and South America.

The robot has also demonstrated its ability to be able to operate in low light and light rain conditions. Block wastage reduction is one-fifth less than the traditional methods of laying bricks. FBR and GP Vivienda have completed the pilot program stage as Mexican styled building structure were built in Mexico. FBR has now planned to enter the Mexican market once Covid19 has passed.

The firm continues to make advancements and improvements to its technology. The next iteration of Hadrian X is expected to be commissioned in the first half of 2021. FBR has received interest from the Middle East and North America for the prowess it has showed so far and we estimate the firm to make bigger strides forward once the pandemic is behind us.


Source: FBR Annual Report 2020

FBR strategy is to implement a “wall-as-a-service” business model where they will work with builders, contractors, and government bodies to erect walls on demand. Europe, Middle East, North America, and the USA are target markets for the company as it sets sights on global exposure

Members can view our earlier report that has an in-depth financial analysis of FBR Limited by clicking here.

Recommendation

FBR Hadrian X technology is the only such technology that can disrupt the construction industry, not just in Australia but, globally. However, the progress will come in stages. It has made significant progress so far and we expect the firm to kick-on again once the pandemic is behind us. We continue to recommend our members to “Buy” the stock.

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