Company Reports

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, primarily through the expansion of existing facilities.

DigiCo securities fell more than 10% as it reported full-year underlying EBITDA of AUD 127 million. The company also announced the appointments of Simon Mitchell and Ralph Goninan as co-heads of the company. Distributions were AUD 12 cents per security for the year.

DigiCo Infrastructure REIT announced the sale of Chicago data center CHI1 for USD 750 million, as well as its intention to sell the LAX1 and LAX2 sites. Its security prices shot up over 20% intraday May 6.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, primarily through the expansion of existing facilities.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, through the development of new data centers and expansion of existing facilities.

DigiCo's first-half fiscal 2026 underlying EBITDA rose 15% to AUD 57 million on the prior half, driven mainly by the inclusion of Chicago precompletion rent. But LAX1 development approval is delayed, given recent community focus on energy and water usage for data center developments. Shares fell 4%.

DigiCo announced customer wins for its Australian data centers, primarily for SYD1. The company also provided underlying EBITDA guidance for fiscal 2026 of AUD 120 million-AUD 125 million. Shares jumped around 15% intraday.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, through the development of new data centers and expansion of existing facilities.

DigiCo reported underlying EBITDA of AUD 53 million in its inaugural fiscal 2025 results, translating to annualized underlying EBITDA of AUD 99 million. The results focused on its recent certification of SYD1 and progress with its development pipeline. Securities fell 14% intraday.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, through the development of new data centers and expansion of existing facilities.

The New South Wales government has imposed a ban on new data center facilities in Macquarie Park, a secondary business district in Sydney, focused on technology.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, through the development of new data centers and expansion of existing facilities.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, through the development of new data centers and expansion of existing facilities.

We maintain our AUD 3.40 per security fair value estimate for no-moat DigiCo. This follows the REIT’s update presented at the half-year results of HMC Capital, the company’s investment manager. DigiCo itself is not releasing a financial report for the first half of fiscal 2025, as it has received Australian Securities and Investments Commission relief from the half-year reporting requirements, due to its short first financial year. However, the REIT reconfirms the prior guidance it provided in the IPO prospectus for the full year.

We initiate coverage of DigiCo with a fair value estimate of AUD 3.40 per security. We assign DigiCo no-moat, High Uncertainty, and Standard Capital Allocation ratings. We forecast revenue to grow at a compound annual growth rate of 22% through fiscal 2032 and EBIT margins to expand to 29% by fiscal 2034. We use a weighted cost of capital of 6.9%. DigiCo securities screen as materially overvalued and do not reflect our view of an overvalued sector with above-sector company risk. To reach the current valuation, we need to assume the company will generate high rates of return, which we don't think is likely given the competitive nature of the industry.

DigiCo’s strategy in the near and medium term focuses on increasing the operating capacity of the company’s assets, through the development of new data centers and expansion of existing facilities.

We believe securities in DigiCo, a newly created data center REIT and developer to be listed on the Australian Securities Exchange, are overvalued.