StockTalk

Hegy's back ....


https://edition.cnn.com/2025/10/15/europe/ukraine-hegesth-firepower-coming-nato-intl-hnk


https://www.youtube.com/watch?v=G_nOXbNetVQ

 

Do they have anything which customers can't get much cheaper in the boxes next to theirs ...
[/quote]

Many Hospital medications, although I cant find a list of them

Last 5 years eps have been 7,19,10,15 and 11cps according to invest directs website, (that track record of eps does not inspire me at all in the context of a FY25 PE of 26 times earnings).  Sales growth is one thing, eps growth is quite another.

Just as well the future is going to be so much different with average broker forecasts of 16, 20 and 25 cps in the next 3 years https://www.marketscreener.com/quote/stock/AFT-PHARMACEUTICALS-LIMIT-27329668/finances/

I wrote a detailed post recently wherein I stated my belief that 80-90% weight should be put on what a company has actually achieved in the last 5 years and 10-20% on what they say they're going to do in the future.    Brokers think its worth $3.80.    Best wishes to shareholders.  Its not for me.

Quote from: Rawz on Today at 10:50 AMAFT SP looks to have moved into an uptrend (based on limited TA knowledge). This combined with what I am expecting to be positive fundamental news flow off the back of their $300m revenue target should help the SP grind higher and higher.

Disc. hold.

Hmm - yes, SP managed to get over MA50 and MA200 - and even went through MA400.

Could be a trend change or could be just onother of these blibs the SP had throughout the big downtrend since 2020.

I stopped a long time ago to follow them ... did they change their strategy to spread potentially good sounding data without revenue impact? You mention a revenue goal. More interesting would be - do they make money at a reasonable PE and is earnings growth visible? Their only economically interesting tablet used to be to put Aspirin plus Ibuprufen into one tablet. Obviously - every doctor and most other people know about that and get the same benefit by just prescribing / buying cheap aspirin plus cheap Ibuprofen instead of buying an expensive Maxigesic.   

Do they have anything which customers can't get much cheaper in the boxes next to theirs ...

CDC DATA CENTRES - INFRATIL INVESTMENT ANALYSIS
NZX: IFT | CDC Valuation Update - 30 September 2025

VALUATION SUMMARY
Infratil's 49.72% Interest in CDC:

Current Value: A$6,780 million (up A$32M from June 2025)
Total CDC Value: A$13.6 billion (valuation range: A$12.8B - A$14.5B)
Quarterly Increase: A$77 million (+0.57%)
Net Debt: A$4,431 million (up from A$4,070M June 2025)

Key Operational Metrics:

Operating Capacity: 372MW (unchanged)
Under Construction: 453MW (unchanged)
Future Build Pipeline to FY34: 1,636MW
Total Pipeline: 2,461MW
New Contracted Capacity: ~100MW secured in Q3 2025

Valuation Drivers - Q3 2025:

Cost of Equity: 11.38% (up from 11.05% in June)
Asset Specific Risk Premium (ASRP): Reduced (reflecting de-risking)
Forecast Gearing Ratio: Increased (valuer methodology change, not structural)
Build Programme: Consistent through FY34
Committed Capital: A$250M additional within 6 months

Positive Developments:

Perth, Western Australia expansion announced
100MW new contracted capacity secured
Strong demand across Australasia confirmed
Valuer reduced ASRP due to execution progress


GLOBAL RISK ASSESSMENT - DATA CENTRES 2025-2026
CRITICAL RISK #1: Climate & Physical Infrastructure
Climate Hazard Exposure:

APAC Region: >10% of data centres at HIGH RISK in 2025 (rising to >12% by 2050)
Major hubs (Tokyo, Hong Kong, Shanghai, Bangkok) face 20-64% high-risk facilities by 2050
Eight climate hazards tracked: flooding, cyclones, fires, coastal inundation, extreme wind, freeze-thaw, soil movement
Insurance costs projected to triple/quadruple by 2050 without adaptation

CDC Geographic Exposure:

Canberra: 117MW operating, 58MW under construction, 73MW future (248MW total)
Sydney: 123MW operating, 168MW under construction, 878MW future (1,169MW total)
Melbourne: 34MW operating, 226MW under construction, 525MW future (785MW total)
Auckland: 98MW operating, 0MW under construction, 126MW future (224MW total)
Australian Expansion: 34MW future

Risk Mitigation Assessment:

Australia/NZ generally lower climate risk vs Asia/US hotspots
Sydney expansion (largest pipeline) requires climate adaptation planning
Perth expansion brings new geographic risk profile (need assessment)
Adaptation measures can reduce climate risk by 72% (per XDI report)

Financial Impact:

Insurance premium increases likely 2026-2030
Capex requirements for climate adaptation not disclosed
Physical damage risk relatively contained vs global peers


CRITICAL RISK #2: Energy Infrastructure & Power Availability
Global Power Crisis:

US data centre power demand: 35GW (2025) → 78GW (2035)
Power transmission delays: 4+ years in many regions
Northern Virginia: New connections paused until 2026 due to grid instability
AI workloads driving 3x increase in energy demand

Australian/NZ Power Market:

Australia: Renewable energy transition underway but capacity constrained
Electricity prices volatile in Australia (Q3 2025)
Power Purchase Agreements (PPAs) critical for new capacity
Government support for data centre development

CDC Exposure:

1,636MW future build requires securing ~1.6GW of power capacity
A$250M committed capital likely includes power infrastructure
Valuation assumes build to 2040, but power availability is constraint
Perth expansion: Western Australia power grid capacity TBD

Risk Assessment:

MODERATE - Australasian power markets less stressed than US
Power costs rising = potential margin pressure
Timing risk: Development delays if power unavailable


CRITICAL RISK #3: AI Disruption & Demand Volatility
DeepSeek Moment (January 2025):

Chinese AI startup achieved similar LLM results with 90% less compute power
Challenged assumption: "Bigger AI = More Computing Power"
Market impact: Tech valuations dropped, data centre expansion assumptions questioned
Key question: Is data centre capacity expansion sustainable if AI becomes more efficient?

AI Data Centre Economics:

AI rack density: 40kW → 130kW (2025) → 250kW (2030 projection)
AI data centres generate $12.50/watt revenue vs $4.20/watt traditional
33% of global data centre capacity dedicated to AI by 2025
AI cooling requirements: Liquid cooling replacing air systems

CDC Position:

CDC serves hyperscale customers (cloud, AI workloads)
100MW new contracts in Q3 2025 suggest demand remains strong
Risk: If AI compute efficiency improves faster than expected, demand growth slows
Opportunity: AI-optimized facilities command premium pricing

Risk Assessment:

MODERATE-HIGH - Technology disruption risk is real but timeline uncertain
CDC's contracted capacity (100MW) provides near-term revenue visibility
Future build pipeline (1,636MW) faces demand uncertainty post-2027


CRITICAL RISK #4: Cost of Capital & Valuation Methodology
Valuation Changes - New Valuer (Sept 2025):

Cost of Equity: 11.05% → 11.38% (+0.33%)
Gearing Ratio: Increased (methodology change)
ASRP: Reduced (de-risking operational sites)
Net Impact: +A$77M valuation increase (modest)

Financial Structure:

Net Debt: A$4,431M (up A$361M from June)
Debt/Equity: Rising gearing ratio
Terminal Year: 2055 (assumes 30+ year operations)
Capex: A$250M committed near-term, A$billions required for full pipeline

Interest Rate Environment (Oct 2025):

Risk-free rate: 4.00% (stable)
Asset beta: 0.575 (unchanged)
Global interest rates: Declining in NZ/Australia (supportive)

Valuation Sensitivity:

0.33% cost of equity increase = material valuation impact
Future valuations dependent on execution, not just market conditions
Net debt rising faster than equity value (leverage increasing)

Risk Assessment:

MODERATE - Cost of capital stable but valuation sensitive to execution
Infratil must commit A$250M+ within 6 months (dilution or debt?)
Valuation range (A$12.8B - A$14.5B) = +/- 6.25% uncertainty


CRITICAL RISK #5: Regulatory & Cybersecurity
Global Regulatory Trends 2025-2026:

EU NIS2: Cybersecurity standards effective January 2025
EU DORA: Financial sector resilience requirements (2025)
Singapore: Digital Infrastructure Act under development
Sustainability Reporting: EU CSRD (2025), Asia phasing in (2026-2028)
PUE Requirements: Australia targeting 1.3 or lower (2025 standards)

CDC Exposure:

Operates in multiple jurisdictions (Australia, NZ, future Perth)
Banking/financial services clients = heightened cybersecurity requirements
Sustainability reporting requirements coming (2026-2027 likely)
No disclosed cybersecurity incidents (positive)

Compliance Costs:

Cybersecurity infrastructure investment required
Sustainability reporting = operational overhead
PUE compliance may require cooling technology upgrades
Perth expansion must meet Western Australia regulations

Risk Assessment:

LOW-MODERATE - Regulatory risk is manageable but adds cost
Infratil/CDC experienced in regulatory compliance
Early adoption of standards = competitive advantage


CRITICAL RISK #6: Execution & Development Pipeline
Development Pipeline Complexity:

453MW under construction (2025-2026 completion expected)
1,636MW future build (2027-2034)
Total capex: A$10B+ estimated (not disclosed)
100MW contracted but not yet built

Execution Risks:

Construction cost inflation (2024-2025 high)
Labor shortages in Australian construction market
Supply chain delays (cooling equipment, generators, electrical)
Permitting delays (environmental, power grid connection)

Historical Performance:

June → Sept: No capacity additions despite A$361M debt increase
453MW under construction unchanged (completion timeline TBD)
Future build increased modestly (1,629MW → 1,636MW)

Risk Assessment:

MODERATE-HIGH - Execution risk is material given pipeline size
A$250M committed capital is small relative to total build programme
Timeline slippage would delay revenue, increase costs
Valuation assumes completion to 2040 (15-year execution period)


GLOBAL EVENTS - RISK FACTORS (2025-2026)
Geopolitical:

US-China tech decoupling continues (semiconductor, AI restrictions)
Outbound Investment Security Program (US) regulates investment in AI/quantum sectors
China economic weakness (impacts demand from Chinese tech companies)
Trade tensions = potential supply chain disruptions

Economic:

Australia economic slowdown (2025) = enterprise spending caution
NZ domestic recession (consumer) but export sector strong
Interest rates declining (supportive for infrastructure)
Commodity prices volatile (construction materials)

Technology:

AI efficiency gains (DeepSeek impact) = demand uncertainty
Liquid cooling technology transition = capex requirement
Quantum computing development = potential disruption (2028+)
Edge computing vs centralized data centres (competitive dynamic)

Environmental:

Water stress: APAC region faces high water stress by 2030 (52% of hubs)
Carbon emissions: Data centres = 3.4% of global CO2 (2025)
Renewable energy requirements = PPA costs rising
Heat management: Cooling Degree Days +83% average (2030-2080)


INVESTMENT THESIS - CDC/INFRATIL
Bull Case:

Strong contracted demand (100MW Q3 2025)
Australasian market less saturated than US
Infratil experienced infrastructure investor
AI/cloud migration secular growth trend
Lower climate risk vs Asia/US peers
Valuation increased despite conservative cost of equity rise

Bear Case:

AI compute efficiency gains (DeepSeek) threaten demand assumptions
Execution risk on 1,636MW future build pipeline
Rising net debt (A$4.4B) with ongoing capital requirements
Climate adaptation capex not disclosed
Power infrastructure constraints could delay build
Valuation sensitive to cost of capital changes

Base Case Assessment:

CDC remains strategic asset for Infratil
Near-term (2025-2027): Strong demand, execution risk
Medium-term (2027-2030): Demand visibility improves as AI workloads mature
Long-term (2030+): Climate adaptation, technology disruption risks rise


KEY MONITORING METRICS - QUARTERLY
Operational:

MW capacity additions (operating, under construction, future)
Contracted capacity vs pipeline (100MW contracted in Q3 = benchmark)
Utilization rates (not disclosed - request transparency)
Customer concentration (hyperscale vs enterprise mix)

Financial:

Valuation changes (cost of equity, ASRP, gearing)
Net debt growth vs equity value growth
Capital commitments (A$250M within 6 months is first tranche)
Revenue per MW (pricing power indicator)

External Factors:

Australian/NZ power market capacity and pricing
Climate events impacting Australasian operations
AI compute efficiency trends (follow DeepSeek developments)
Regulatory changes (PUE standards, cybersecurity, sustainability)

Geographic Expansion:

Perth project milestones (power agreements, permits, construction start)
New region announcements (CDC expanding beyond current footprint?)


RECOMMENDATION
CDC/Infratil Position: HOLD - MONITOR CLOSELY
Rationale:

Valuation increase modest (+0.57%) despite strong demand narrative
Net debt rising faster than equity value = leverage concern
Execution risk on 1,636MW pipeline material and underappreciated
Global data centre risks (climate, energy, AI disruption) increasing 2025-2026
Infratil's 49.72% stake valued at A$6.78B (~NZ$7.46B at 1.10 FX rate)

Risk-Adjusted Fair Value:

Current: A$6,780M (Infratil share)
Bull Case (execution success, AI demand sustained): A$7,500M+ by 2027
Bear Case (delays, demand slowdown, climate costs): A$6,000M by 2027

Action Items for Infratil Shareholders:

Request transparency on utilization rates and revenue per MW
Monitor A$250M capital commitment timing and terms (debt vs equity)
Track Perth expansion progress (power agreements critical)
Watch for climate adaptation capex disclosures
Assess impact of AI compute efficiency on demand forecasts


Analysis Date: October 16, 2025
Next Valuation: December 2025 (Q4 2025 expected)
Key Risks: Execution, AI Disruption, Climate, Power Infrastructure
Opportunity: Australasian data centre market growth, lower climate risk vs global peers

Good stuff, does anyone know what the bottleneck is for CDC to get even more aggressive with growth and build even more DCs then they already have planned? Maybe it's power?

The compute scaling laws of AI essentially guarantee the demand is not gong away, in fact it's going to grow by many orders of magnitude. It's hard for some to accept but the simple reality is the more compute you throw at AI models the more intelligent they become.

The question is who benefits the most as we build out the infrastructure to convert terrawats of electricity into compute, right now nvida is collecting the majority of the margins, hundreds of billions cash flows this year alone?

Is capital better put there as this spend goes up by 10x or 100x etc?

I see CDC as a risk adverse way to gain exposure to this AI infrastructure spend but in terms of one's overall exposure to AI, there are surely much more aggressive ways to capture the huge upside.

What a time to be alive.

ASX Announcement
16 October 2025
Business Update
All results in US$, unless stated
Cogstate Limited (ASX:CGS), has today released a business update ahead of its Annual General Meeting of
shareholders, which will take place at 11am AEDT today.

Market Conditions
The demand for Cogstate services continues to grow, reflecting both growth in the market for R&D in central nervous
systems diseases as well as growth in market share by Cogstate.
Each of the last four quarters (from 2Q25 to 1Q26) has set a new record for the number of sales opportunities
identified by Cogstate, with those opportunities in the September quarter (1Q26) 72% higher than 1Q25.
The growth in sales opportunities identified reflects an expansion of both the Cogstate customer base and entry into
new indications. Cogstate management continues to carefully monitor win-rate from the associated increase in
proposals volume and is assessing the full impact of new channel partnerships, with further updates to be provided
throughout the course of the year.

Clinical Trials Sales Contracts
For the September quarter (1Q26), Cogstate executed $21.4 million of sales contracts, which is the second highest
quarterly result in Cogstate's history. The quarterly sales contracts represent an increase of 88% compared to the
$11.4 million of sales contracts executed in the previous corresponding quarter (1Q25).
The following table shows the reduced concentration of the value of sales contracts executed in 1Q26, delivering on
Cogstate's growth strategy, compared to the full FY25 year – noting that 1Q26 data will not necessarily be reflective
of the full FY26 year:

Indication
FY25
Sales Contracts
by Value
1Q26
Sales Contracts
by Value
Alzheimer's disease 56% 33%
Rare disease 19% 19%
Narcolepsy 6% 11%
Depression 5% 17%
Parkinson's disease 4% 2%
Schizophrenia 2% 14%
Other 8% 4%
| Page 2
Financial Outlook 1H26
Subject to sales contracts executed up to 31 December 2025, and 1H26 revenue yield from those, revenue for the
December half year period (1H26) is expected to be:

• Approximately 18% - 20% better than the previous corresponding half (1H25 $23.9m); and
• Closely align with the most recent June half year period (2H25 $29.1m).

In respect of margins for the December half year period, we reconfirm guidance provided with the release of the
FY25 results in August, specifically:
• Continuing to invest for growth: Both direct costs and operating costs will increase from FY25 to FY26 as
Cogstate invests for growth:
o Additional science resources to support expansion into psychiatry and mood disorders;
o Additional resources based in the Asia-Pacific region to support a growing customer base there;
o Continued increase in expenditure related to data engineering to bring more automated data insights
to Cogstate customers; and
o Engineering expenses associated with development of AI tools.
• Potential margin impact of growth initiatives: Subject to revenue growth in FY26, the increase in
expenditure may result in a small decrease in margins (0-3 percentage points).
Due to the volume and value of sales opportunities outstanding presently, it is not possible to provide accurate full
year FY26 guidance at this stage.
This announcement was authorised for release by the Board of Cogstate Ltd.

AFT SP looks to have moved into an uptrend (based on limited TA knowledge). This combined with what I am expecting to be positive fundamental news flow off the back of their $300m revenue target should help the SP grind higher and higher.

Disc. hold.

New deal for CDC which includes Nvidia as a client. Details TBA with half year results in Nov.

Not marked as price sensitive at this stage.

https://www.nzx.com/announcements/460798

More AI Stuff - 4 councils...

Auckland to the Mount..

https://claude.ai/public/artifacts/e3748a01-9445-4221-9015-37521cddb20f