NXT & AJD - NEXTDC & Asia Pacific Data

[Snow Leopard]

Data Centres:

NextDC build them, sell them to Asia Pacific Data (or whomever) booking a profit, lease them back again and then operate them, hopefully booking a profit.

Just really getting going but having a had run through the accounts I think I can see growth in there so I have spent a few dollars from my play fund (actually my Oz Super Ann!) on NXT recently.

Do Your Own As Usual

Best Wishes
Paper Tiger

[Snow Leopard]

The share price of NXT has risen steeply over the last few days, much to my surprise, and is up a few cents more today.

Best Wishes
Paper Tiger

[Snow Leopard]

NEXTDC:

Investor Update and A We Landed A Biggie announcements today.

Just have a look at the update and see what you think.

Best Wishes
Paper Tiger

[Snow Leopard]

This continues to go against the flow on the ASX, setting a new high again today.

Best Wishes
Paper Tiger

[Snow Leopard]

Announcement today that NXT have sold off their holding in AJD.

They are doing better than expected and need the cash to fund the growth.

Best Wishes
Paper Tiger

[Snow Leopard]

Up 7% to a new high today and with good volume behind it.

It was also announced that a NextDC had done a deal with Dimension Data for DD to resell the NextDC product.

One presumes that the two are in some way connected.

Best Wishes
Paper Tiger

[G on]

I have been waiting for the retail offer book to arrive and so far nothing. Anyone know how I can get the info online? In the past the company website can have the info but I get nowhere.

[mark100]

Try calling the share register, Link Market Services

[Snoopy]

Up 7% to a new high today and with good volume behind it.

It was also announced that a NextDC had done a deal with Dimension Data for DD to resell the NextDC product.

One presumes that the two are in some way connected.

You are a bit lonely on this thread Snowey. It looks like even you have been asleep for ten years as well, so I thought I would drop in.

I see NXT has just had a $1.321 billion dollar plus capital raising?

From the road show presentation for the April 2024 capital raising:
https://www.listcorp.com/asx/nxt/nex...n-3017856.html

From slide 10:

1/ Acceleration in demand has grown NEXTDC’s forward order book to a record 68.8MW. (from slide 14, one year earlier, December 2022, the order book was just 8MW)
2/ NEXTDC’s contracted utilisation has stepped up and now exceeds built capacity (from slide 16, 141MW built, 150MW contracted)

From slide 13:
3/ Power density per rack forecast to rise from 36kW (pre AI) to 80-100kW (AI on stream)
4/ AI workloads are power intensive with average power density 2.5x larger than non-AI workloads.

From slide 14:
5/ Historically, the global data centre market has grown at a 15% CAGR (2017A – 2023A) supported by digitisation and cloud migration mega trends. Emergence of AI megatrend and the pace of adoption is forecast to accelerate market growth to a 19% CAGR (2024E – 2027E).




Snoopy Comments

I don't know how accurate NXT's predictions on AI driven demand for datacentres will be. But points 5 and 6 drive home the point that off site processing (e.g. compiling an AI response) takes a lot more energy than 'simple storage'. At least twice as much by the look of things. Now creating an AI reply is 'data creation', not just 'data recovery'. So that answers my question posed on the Infratil thread
https://www.sharetrader.co.nz/showth...=1#post1061062

where I was interested in the difference between 'data storage' and 'data creation' and the processing requirements of each.

My own unfortunate 'experience' of AI has been through the Inland Revenue department phone systems. Admittedly this is a fairly crude voice recognition decision tree system, where you have to enunciate your problem, then go through various push button options until eventually you get to speak to an operator. But I always find my blood is boiling by the time I finally get through to a human. It would certainly be better if you could ring up, state your problem, and the AI could get you to your destination in one step. I think AI could do this. But given the IRD don't really like you speaking to humans, would they do this?

The only saving grace with the AI we have right now, is that it should be the worst AI we will ever have.

SNOOPY

[Snoopy]

From the road show presentation for the April 2024 capital raising:

I love the fine print section on 'investment risks'. It is a legal butt covering section where every disaster under the sun is explained in graphic detail. I can see why it is put in small print in the appendices. Becasue if anyone who was considering taking part in a capital raise like this 'read it all', they would be so terrified that there is no way they would participate. Consequently NXT would not raise any money.

Nevertheless, it does mean the promoters do have to at least think about what operational matters could go wrong. So in the spirit of being kept informed, here are some notes on 'datacentre risks' from 'Appendix B'.

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Demand Uncertainty
The market for data centres is characterised by rapidly changing technology and industry trends, frequent new product, and competitor introductions, changing laws (e.g. data and privacy), as well as changing customer demands. NEXTDC is currently exposed to favourable industry trends in relation to data centre outsourcing and co-location cloud provision which remains a key driver of customer demand. However, there are no assurances that such demand will continue or that existing customers will renew their data centre requirements through NEXTDC at all or at the same level as in prior periods.

A reduction in customer demand or increase in competitive supply may have a material adverse effect on NEXTDC’s financial position and performance. This could include a reduction in revenue:

i/ As a result of NEXTDC having to lower product prices in response to changing customer demand or competitive supply) OR
ii/ NEXTDC retaining excess capacity over a longer period to the detriment of its return on capital and the subsequent valuation of its investment in its data centre facilities and therefore the value of its securities.

Data Centre Inerruptions
NEXTDC promotes its 100% uptime certification and service excellence delivered through its Tier IV and Tier III facilities as a key reason for customers to entrust their critical IT infrastructure with NEXTDC. A data centre or system interruption or outage at any of NEXTDC’s data centres may have a material adverse effect on NEXTDC’s business, operations, reputation and financial performance and therefore the value of its securities.

Termination of Customer Contracts
The majority of NEXTDC’s customer contracts by number are on NEXTDC’s standard terms and conditions. But the majority of NEXTDC’s top 10 customer contracts are based on highly negotiated individual customer contracting terms rather than NEXTDC's standard terms and conditions. This means in practice that the legal terms which govern the relevant arrangements differ significantly from customer to customer. Some of these material customer contracts to which NEXTDC is a party contain provisions which may give the customer a right to terminate the contract under certain scenarios (including for convenience).

Competitive Dynamics
NEXTDC competes against other local and global data centre owners and operators, as well as alternate business models such as traditional on-premises solutions. Similarly, cloud service providers have grown in size and market share, with many having built their own data centres in addition to relying on third-party providers such as NEXTDC. An increasing use of self-built data centres has the potential to reduce demand for data centre services from third-party providers such as NEXTDC. This could lead to decreased revenue and profits for NEXTDC, as well as a potential decrease in the value of NEXTDC’s data centres.

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SNOOPY