Global Data Centre Group

ASX:GDC

Global Data Centre Group

ASX:GDC
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$3.36 (+0.9%)
Last close price
#175
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3
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Reports (3) My Report Forum Investors
Forum Topics GDC GDC Realisation strategy proceedin

Pinned straw:
Duffshot38
Added 2 months ago

GDC is in a process of realising existing investments and has just announced sale of its largest asset ETIX. What will remain once this transaction concludes (assuming it does) is the remaining investment in Airtrunk.

ETIX sale will result in $2.26 shareholder value at current exchange rates expecting to close in Q1 2025

The Perth data centre realised $15M after paying down debt which adds $0.19 per share

Current realised assets = $2.45 per share.

Airtrunk is difficult to value but is on books at $48.5M $0.62 per share.

Total asset value per share = approx $3.07

Assuming there is an efficient transfer of shareholder capital that would mean the market is currently valuing the Airtrunk investment at around $0.45 per share based on todays share price of $2.90. There is definitely potential upside on the Airtrunk disposal if it goes ahead in the short term but there is also exchange rate risks, and the possibility of the ETIX transaction falling over, and uncertainty on how the cash is getting back to shareholders I think the current price is pretty close to fair but believe the Air trunk value is being undervalued. There are risks though and I think a fair valuation is $3 and with some good potential upside.

Overall the company has done well on the realisation strategy to date and as a long term holder I am holding for a good result on Airtrunk when eventually realised.
UlladullaDave
2 months ago

On AirTrunk I've seen $15b valuation tossed around on an EV basis, which with $4.8b in debt would value the equity at $10.2b. Assuming that, GDC's stake would be valued at ~$85m.

So, the whole GDC thing would look something like...

Etix $175m

Perth DC $39m

AirTrunk $85m

Cash $7m

Debt + Payables $25m

Manager's performance fees $26m

Net to shareholders $255m

SoI 77m

/share $3.31

I'll take a guestimate and say there'll be $30m in tax, which is 38c/share which brings the net amount back to $2.93/share.

Worth pointing out the manager's new rem structure includes grossed up distributions/dividends when consider the hurdle prices.

12
stevegreenycom
2 months ago

If markets and sentiment hold up ok next few months and they can sell AirTrunk I suspect the numbers here are too conservative.

I remember months ago $18bn being spoken about and seemed fair based on comparative sales in the sector, so maybe $13bn adjusting for the debt but todays snippet in AFR might mean earnings forecasts are a bit stale.

As time goes on the talk seems to be getting more bullish if anything.

Risks both ways I guess as this space is attracting a lot of hype.

maybe AirTrunk 110 mill plus for GDC?

let’s wait and see I will hold.


6
UlladullaDave
2 months ago

Yeah, I tend to agree that there is a pretty good chance my numbers being the low end. Holding the sale process to bed down a few extra contracts seems to suggest they are confident they can extract a higher price by doing that. And the general bullishness of the sector.

It's hard to see how you lose money if you were a buyer here.

8