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Mathava

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27/02/19

10:53

Post #: 37583896
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Originally posted by Mathava: ↑

Hi All

Several times I've called out there being large deals in M2. I thought I'd share the logic. All the data about future deals are in the half yearly reports.

There is a section in the reports that outlines the various build out progress. The most important colour to look out for is the dark grey "Build in Progress" section.

As you look at the below chart, compare the changes in the "built + build in progress" sections of two consecutive half yearly reports.

In this report you will notice S2 build out increases from 10MW (Dec 2017) to 14 MW (June 2018)Then on the 12th Nov the 9MW contract utilisation is announced on disallowed. Which takes the total contracted utilisation to 14MW
You till noticed that the M2 build out increases from 5MW (Dec 2017) to 10MW (June 2019) this indicates that there is circa 9-10MW deal in M2. It could be either two 5MW deals or a large 10MW deal. Given the way the build out is occurring I believe it will be two 5MW deals announced at M2. So a deal that entered into the sales pipeline in the last reporting month i.e. Dec 2017 should have closed by Sep 2018 (assumes 9 month fit out)

As you can see in the above charts the 5MW and 9MW deals were clearly predicted by the half yearly reports which gives me confidence of circa 7-9MW contracted utilisation out of B2 and M2 in the Dec 2018 reporting period. It is likely P1 would contribute also.

I believe the upcoming Dec 2018 report will likely contain a 5MW M2 deal and a 2-4MW B2 deal.

It is then likely that the second M2 5MW deal will land sometime in the June 2019 reporting period. I believe the announcement should be imminent, likely in the next 1-2 months.

*All timing assumptions assumes a 9 month fit out of data halls. If it takes longer than 9 months then the above key deal dates would push out.
*The above assumes that NXT sales forecasts hold. There have been instances where future build out hasn’t eventuated. Compare P1 (Dec 2017 vs June 2018).

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Hi Guys,

Today's results were very underwhelming in my eyes for the following reasons.

- Outside of the S2 bringing forward 8MW (which was already announced in Nov 2018) there was no additional "Build in Progress" change from the previous 6 months.
- M2 and B2 had no material contracts in the last 6 months. Outside of the S2 contracting 9.7MW there was only 0.6MW contracted between Melbourne, Brisbane and Perth
- on today's conference call there appears to be a lot of retail customers (higher margins) in M2 and B2 and not the anticipated large contracts.

- However there was a BIG positive from today's report which was the advancements in S2 build out. They have built out the 5MW simultaneously while continuing the datacentre build. Just an amazing engineering feet. I went to the S2 site recently and i though we were behind schedule but NXT have a continuously build process and have fitted out the data halls for the initial 5MW contract.

I have decided to offload 50% of my NXT today as I believe the tech sector has run up really high and am looking to buy back into NXT at lower prices with expected volatility over the coming months . Just hoping there is no takeover in the mean time

p.s. the share price at posting is is at 6.79 at the time of posting just a lag in the hot copper price feed.
NXT Price at posting: $6.79 Sentiment: Sell Disclosure: Held
4 Upvote

0 Great analysis

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