Ann: NSW - Material Customer Contract Wins, page-19

Factoring in new shares from future capital raisings, of which there will be many more, at $30 some time in the next decade you're probably at a $20-25bn equity value (just based on shares existing today it would be nearly $15bn). Enterprise value would be well north of $25bn as NXT will raise more debt over time as the earnings grow.

Whilst NXT is a great company, they don't have a monopoly in Australia - far from it. The competition has been increasing and will continue to do so. They have done amazingly well to grow their market share in this environment, which although difficult to assess is almost certainly the case given the recent run of big customer deals.

In the scheme of things, Australia is a relatively small market, although it punches well above its weight because it's a wealthy country with a large, sophisticated business community. As others have mentioned, there will also be new technologies that drive data centre utilisation way above where it is now - AI, self driving cars, IoT etc. Thus despite being small, the growth opportunity remains huge.

Taking the opportunities and threats into account, I think to get to that kind of valuation NXT would absolutely have to expand and succeed in other APAC markets. I can't see how the whole industry in Australia could ever be worth what that future valuation prediction and a realistic long term market share assumption implies.

If you reverse the analysis and estimate what the industry revenue would need to be to justify a >$100bn market value for data centre operators just in Australia (I am assuming NXT has c.20% market share long term, which in a competitive market like this is not unreasonable), at a sensible long term sustainable multiple, you'd calculate something that wouldn't make sense from the perspective of being able to be paid collectively by all the companies operating here.

NXT is trading on the highest earnings multiple of any data centre company in the world excluding GDS, which has majority market share in China and hence has a stupendous growth runway. Momentum from the customer wins, from the industry growth outlook as well as strong investor interest in the sector has been driving the valuation ever higher.

Ultimately it needs to grow into this valuation at some point - it doesn't make sense that the enterprise value jumps $500M every time NXT signs a 4MW contract. It makes sense in the short term because the wins validate the growth trajectory - no argument there. But on a very long term basis, it can't get legging up like that.

Now someone who owns Afterpay shares will tell me that's BS, but I am talking the long term here, which is what this investment is -10, 15, 20 years of growth.

If you're still reading at this point - to summarise, I think based on top down industry analysis they will need to go offshore and do well there to ever get to 30 bucks. Not soon, maybe not even in the next 5 years, but at some point.

Great company, great industry, gltah