Watch out for NextDC becoming a takeover target in the short-term. Digital Realty Trust is looking for M&A in APAC given its current trading multiples to challenge Equinix (CyrusOne grows fast as well). Also Brookfield (via BIP) has been aggressively entering the global DC market. NXT could be a nice fit for ST Telemedia / Temasek to include it within its current portfolio (GDS Holdings, Virtus Data Centers, Tata DC).
Key issue here is the valuation of NextDC which is a bit elevated on standard valuation metrics when comparing global data center peers (EV/EBITDA, P/AFFO etc).
But I wouldn't sell my NXT shares below $9. In fact we've been scooping up shares post ER.
NextDC and 21Vianet are key holdings within a globally diversified data center portfolio.
NXT Price at posting:
$6.14 Sentiment: Buy Disclosure: Held
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