Discl: Not Held

Updating the SKS Chart and comments from a week ago. A top WAS made at $7.31 and the price retraced ~23%+ since.

Question for next week is whether it takes off again, as the minimum technical retracement of 23.6% was met,

OR

it pulls back further to either 38.6% or 50%.

See chart for comments.

Discl: Not Held, Not Intending to Open Position

https://strawman.com/forums/topic/13043#post-43163

@Noddy74, posting the response to your request for comments on the SKS Chart here, from the post above in the SXE folder.

Full disclosure, I don't follow SKS, and have only now looked at the SKS chart for the very first time, please treat this as crystal ball gazing entertainment, with a crystal ball of unknown capability, at best!

It is a really interesting chart from a few perspectives:

1. It is very much "similar" to the SXE chart - nice uptrend, then it went sideways-with-an-upwards-bias for a period, then it launched to the moon. This is likely driven by the DC boom showing up in the books & orders. Similar to SXE, the SKS price is at stratospheric, all-time-high levels, so we have no more historical technical markers from here.

2. $6.92-ish seems to be shaping up to be some sort of a "temporary peak". It has tried to crack this level 3 times, including today, and failed. Given the huge runup + no meaninful correction on the way, the probability is perhaps skewed toward this level-ish being a short-term top, followed by a correction. These sorts of runups are not sustainable indefinitely without some heat being taken away from it. Given today's close at 6.90, a rather strong day, will be interesting to see if the price pushes past 6.92 on Mon, and if so, how far more will it go ...

3. But the longer term trend is up and bullish, no question.

4. The 3 rounds of consolidation prior to the current run up would have shaken out a lot of the bears, leaving remaining/new bulls with the capacity to push the price as aggressively as they have. SXE has not had that 3 rounds of correction, only 1 round really, which may explain why the SXE run up is nowhere as aggressive as SKS.

5. Have marked on the chart where I myself would consider opening a position and then topping up on a pullback - (1) ~$6.12 to ~$6.27 initially (2) then ~$5.14 to ~$5.23 then (3) my BUTT (Back-Up-The-Truck) level ~$4.40.

@Saiton, one for your watch list? SKS has some really nice and "clear" waves, with good fundamentals and Data Centre tailwinds!

Hope this makes sense and helps!

This slide from the 1h26 report puts the scale of the datacentre sector in perspective. This is SKS summary of their open tender responses.

I hold IRL, but not on Strawman.

another revenue and NPBT upgrade from SKS- i suspect it wont be the final upgrade for FY26 also. Kicking goals- not cheap per se but fantastic execution from management!

held in RL 9%

SKS has gone back-to-back with a couple of welcome announcements in the last couple of days.

Yesterday it was my lone soldier in green, among a sea of red, after announcing an intent to proceed with a modest acquisition. On paper it looks like a good solid line and length acquisition, smack bang in their existing data centre (DC) fitout vertical, but giving them extra exposure in the state that dominates the DC space. Presumably it was this and the modest multiple they have agreed that the market applauded. The $13.75-15 million, depending on earnout, price represents 5 times earnings averaged over the past 3-years. That would be a reasonable EBITDA multiple, but they're one of the rare companies that have calculated the multiple on earnings, so it actually looks relatively cheap. Whilst not yet binding and non-conditional, it has been agreed so would seem highly likely to proceed. The consideration is a mix of cash and scrip, with the scrip locked up in two tranches, at 12- and 24-months respectively.

Today they've followed that up with a new $130 million DC project in the great state of Victoria, their largest single win to date. This project is expected to deliver them revenues all the way through to FY27 and has led them to upgrade FY26 guidance to $320 million, which would represent well over 20% YoY growth. The win has increased their order book to a new all-time high of $304 million.

SKS has been my biggest winner by far in the last few years. I started buying in December 2023 at 24 cents and have watched it travel all the way up to $4.48 recently. I've bought some and sold more along the way (including 3 tranches in the last 2 months), but it's one that always seems to punish me for not just leaving it alone. Still, it is or is close to, my biggest position so I'm not lamenting too much. It has had a big run up in recent months though, so does the air need to come out of it a bit? If they achieve revenue guidance and get a similar PBT margin to last year, they'll deliver PBT north of $25 million. Based on the significant cash balance they disclosed yesterday, that represents a PBT/EV multiple just over 13. They do need to keep filling up the funnel, but so far they clearly are and have been a big beneficiary of the cloud migration. I dunno, I'm tempted to take at least some of the proceeds of recent sales and top up again at a significantly lower price today.

[Held]