Well placed to deliver modular DCs/capacity in a 5G world We view the company’s ability to both manufacture and operate modular data centres as a key advantage for the company. In the past 12 months, DXN has won several contracts to deliver cable landing station contracts, a key part of communications infrastructure, to several South Pacific island nations. The now-completed acquisition of the Hobart data centre will help spearhead its plans to deliver Edge DC infrastructure across Australia. As a vertically-integrated company, DXN is well positioned to respond to opportunities such as the NSW Government’s GIG State tender and, longer-term, 5G opportunities. DCF valuation is $0.08/share fully diluted Our base case DCF valuation is $0.08/share fully diluted for the additional shares issued in the now completed $5.6m entitlement offer and our assumption that the accompanying options are fully exercised in 3 years’ time. On a 12-months’ forward basis equates our valuation equates to an EV/Sales multiple of 6.2x, a steep discount to larger data centre peers NextDC (ASX:NXT) and Meg
DXN Price at posting:
2.0¢ Sentiment: Buy Disclosure: Held
