Data Centres – MAQ and SXE

Hi Debbie,

We do already hold NEXTDC (NXT)  for data centre exposure and are planning/hoping to increase this position below $16 as we outlined on Friday. Moving onto the two you mentioned:

Macquarie Technology Group (MAQ) $78: MAQ has 4 core businesses; cloud services, government, data centres, and telecom, hence they certainly do overlap into the space. MAQ has been under pressure since disappointing the market with its FY24 result in August where revenue missed ~2%. After correcting around 20% we believe value is returning to MAQ after its stellar advance since early 2023.

• We like MAQ in the $70 area.

Southern Cross Electrical Engineering (SXE) $1.71: This $450mn electrical engineering & communications technology business been on a tear in FY24, after a profit upgrade in May and securing a large contract with the Collie Battery Project in July. The business has evolved from being a mining contractor, to working on renewable-energy projects, to now being associated with data center and battery storage work, not surprisingly the share price has rallied.

• We like SXE in the $1.50-$1.60 region as a relatively speculative play – on Friday the turnover was less than $1.5mn hence volatility should be expected in both directions.

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Macquarie Technology Group Ltd (MAQ)

LAST UPDATED 25/10/2024 13:39

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Macquarie Technology Group Ltd (MAQ)

LAST UPDATED 25/10/2024 13:39