IFT - Infratil

[Left Field]

Could this be the moment when the market finally "gets" IFT's potential?

The simple answer is YES.

The market fears concerning AI likely related to others in the industry (particularly in the USA) and applying these fears to CDC & IFT in the relatively stable economies of NZ & Aus,  was simply wrong for many reasons, for example;

1.) CDC have considerable 'first mover' advantages. Huge land banks and a team of builders and contractors who are delivering on time and under budget.
2.) CDC is one of very few data centre providers with 'green' renewable energy credentials. (Many of the USA DC's plan to use gas generated power!)
3.) CDC is unique in using circulating radiator water cooling. Others use evaporated water cooling which wastes billions of litres of water.
4.) IFT is using conservative BBB rated capital funding to finance CDC.
5.) Based on the revenue being generated for CDC from contracts as announced today, IFT said they could spend an additional $A 400 mill in Capex pa  and not exceed their self imposed limits.
6.) CDC have more major lease contracts in the pipeline and hope to close another one by the time of the 26 May update.
7.) The average lease span for CDC's data centres is 28 years.

etc etc...... I could go on, but that's enough from me!

[LaserEyeKiwi]

The simple answer is YES.

The market fears concerning AI likely related to others in the industry (particularly in the USA) and applying these fears to CDC & IFT in the relatively stable economies of NZ & Aus,  was simply wrong for many reasons, for example;

1.) CDC have considerable 'first mover' advantages. Huge land banks and a team of builders and contractors who are delivering on time and under budget.
2.) CDC is one of very few data centre providers with 'green' renewable energy credentials. (Many of the USA DC's plan to use gas generated power!)
3.) CDC is unique in using circulating radiator water cooling. Others use evaporated water cooling which wastes billions of litres of water.
4.) IFT is using conservative BBB rated capital funding to finance CDC.
5.) Based on the revenue being generated for CDC from contracts as announced today, IFT said they could spend an additional $A 400 mill in Capex pa  and not exceed their self imposed limits.
6.) CDC have more major lease contracts in the pipeline and hope to close another one by the time of the 26 May update.
7.) The average lease span for CDC's data centres is 28 years.

etc etc...... I could go on, but that's enough from me!

I think your point 5 about additional capex was actually the following: CDC is forecasting growing EBITDA at approx $400m each year going forward, and using the moodys approved ratio of 10x, that would enable $4 BILLION in additional capex each year.

[Greekwatchdog]

Note from For Bar this morning

IFT has announced CDC has signed a 555MW data centre contract. This is the step change in contracted capacity CDC alluded to at its recent investor day, but the size of this contract (~2.5x CDC's current billing capacity) is meaningfully above our expectations. Additionally, CDC has provided total contracted EBITDA for the first time, at ~A$2bn (to be achieved by March 2029); it is well above our prior FY30 estimate of A$1.4bn. Current demand is incredibly strong for data centres, and CDC indicated: (1) pricing has held up well with demand outstripping supply; (2) it is in further conversations for similar meaningful contracts; and (3) it is increasingly able to compete for global compute capacity.

CDC has now largely derisked its EBITDA path from ~A$0.7bn in FY27 to >A$2bn in FY30. With CDC's track record of winning large contracts, we believe its earnings risk remains to the upside. CDC's implied contracted EV/EBITDA multiple remains below data centre peers despite its faster growth and superior returns. Retain OUTPERFORM with an increased target price. $17.50 (was $14.40)

Well done holders

[Dolcile]

Yes very well done to holders.  I had a stake in IFT but got bored and sold too early :-(

[LoungeLizard]

$15!! You may be right LF. Onwards and Upwards!

[Left Field]

I think your point 5 about additional capex was actually the following: CDC is forecasting growing EBITDA at approx $400m each year going forward, and using the moodys approved ratio of 10x, that would enable $4 BILLION in additional capex each year.

Just goes to show your use of AI to take notes is much better than my ailing hearing!!

Plus your corrected figure likely to be revised upwards again on the next update.

Nice to be corrected with such an upside! 

Thanks.