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MP1 - Megaport Limited

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Megaport was founded in 2013 with the aim of becoming a global leader in the fast growing elastic interconnection services market. Using Software Defined Networking the Company has developed a platform that provides customers with the ability to provision interconnection services between their network and other networks and cloud providers already connected to the Megaport Fabric. Services can be directly controlled by the customer via a device such as a mobile phone or tablet, their computer or their open API.

It is anticipated that MP1 will list on the ASX during December 2015.

http://www.megaport.com
 

rnr

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MP1 re ASF 2019-04-28.png

The chart is certainly interesting.
 

greggles

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Still moving up slowly.

MP1 got all the way up to $10.50 before getting beaten back to $7.50 where it appears to have found support.

$9 and $9.50 looks like it may present some difficulty for bulls, but if it gets through those levels with any conviction, it may well take another crack at its previous highs.

Last couple of days have been pretty bullish.

big.chart-MP1.gif
 

So_Cynical

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MP1 got all the way up to $10.50 before getting beaten back to $7.50 where it appears to have found support.

I looked at this yesterday, watched a montgomery video, Megaports cash burn is 2 million a month and yet somehow this equates to a
market cap of 1.1 billion dollars, we all like a growth story and potential but many of these tales of wonder and greatness will end in tears.
 

Dona Ferentes

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I looked at this yesterday, watched a montgomery video, Megaports cash burn is 2 million a month and yet somehow this equates to a
market cap of 1.1 billion dollars, we all like a growth story and potential but many of these tales of wonder and greatness will end in tears.

God old Rearview Roger.

Another view ..... UBS has increased its price target on Megaport following the company's $62 million capital rising, saying it gave the company plenty of headroom to accelerate its rollout. Maintaining its 'buy' rating on the stock, UBS lifted its price target from $11.30 to $11.55, more than 20 per cent above its Tuesday close.

The broker said the company's capital raising had "well and truly" de-risked funding requirements until Megaport's forecast break even point of 2021, would allow expansion into new geography and left headroom for any further strategic investments.

"Our thesis remains unchanged – Megaport will be a major beneficiary of the data generation over the next decade, with a large first mover advantage, low capital intensity and material operating leverage as the portfolio matures," said analyst Tim Plumbe. "We recognise the high multiples, but highlight the strong revenue growth profile."
 

Dona Ferentes

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Also interested to see what what the effect of being added to the ASX200 will be.
So, would that have been a signal for early money to get out? MP1 sort of dipped, late Dec, but has recovered from $10 to $11+ again.

I'm not entirely sure what "a provider of elasticity connectivity and network services interconnection across any location, to any services by SDN based, ubiquitous Ethernet fabric allowing our customers wider coverage, speed to market while reducing costs and enabling real-time provisioning across one platform" does, but owning it since early 2016 and participating in Capital Raisings has enhanced my portfolio.
 

Dona Ferentes

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the buying is back (new high), after yesterday's Half Yearly.
Megaport continues growth trajectory with solid 1HFY20 performance, including new and expanded data centre and network partnerships, while increasing reported revenue by 70% and Monthly Recurring Revenue 68%. The Company now operates in 21 countries with the launch of services in Japan
Still making a net loss (capital raise of $62mill helps) and EBITDA numbers heading in right direction.
Coming into the second half of the year, we will continue to focus on ecosystem development, adding new service providers to our marketplace and integrating with more cloud on-ramps as cloud providers expand their platforms to new markets. As we evolve our platform, our development teams will drive more system automation and features that enable rapid provisioning of services while further integrating with service providers.

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Dona Ferentes

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Another capital raising. Hungry beasts, these data stories
RBC Capital Markets and UBS kicked off a $50 million raising after market on Tuesday, seeking bids for new stock at $9.50 a share. The placement is priced at an 8.9 per cent discount to its Tuesday close.

There were 5.3 million shares up for grabs representing a 3.6 per cent stake in the company, according to terms sent to funds.
"Proceeds from the placement will be applied to further accelerate sales, product development and platform expansion opportunities in the near and medium term. Additionally the company is looking to provide some additional funding capability for future strategic opportunities," the term sheet said
And a SPP, but we all know that's crumbs for the retail crowd. Scale back like always
 

Dona Ferentes

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"The surge in working from home as a result of the coronavirus crisis has meant Megaport (MP1) has benefited from an increase in connections via virtual desktop infrastructure and cloud-based applications. Telecommunications companies and data centres are typically considered critical infrastructure and remain in “safe mode” operations despite the lock-downs".

Should it raise the full A$65mn, this will take MP1's total equity raisings to A$310mn since September 2016. It last raised over A$60mn in December 2019.

Four brokers covering MP1, two are Buys and 2 are Hold/ Neutral. Consensus Target is $11.98
In its third quarter update the company achieved the acceleration in uptake that UBS was looking for, particularly in terms of the number of ports added and the incremental monthly recurring revenue. Port and services sales accelerated by 11% and 12% respectively in the the third quarter. A weaker Australian dollar also provide benefits as around 60% of revenues are generated offshore. Third quarter revenue grew 10% to $15.2m.

The business is now moving closer to a maiden positive operating earnings outcome, expected in the fourth quarter of FY21. This is perceived as a major turning point .. and, with growth momentum accelerating, the broker’s rating is upgraded to Buy from Neutral. UBS recognises the current market volatility and the flight-to-quality that has underpinned the share price but considers any near-term weakness remains a good buying opportunity.
and then
UBS is comfortable around expectations for the shift to the cloud amid continued growth in both Microsoft Azure and Amazon Web Services. The broker expects compound growth of 18% in 2017-21 for global public cloud business. UBS has its own survey data which shows increasing expenditure from existing users on the cloud, along with 40-45% of respondents planning to use multiple cloud products. The broker believes an age is looming where data will dominate new technology and the company’s software-defined-network provides the path for this data to move between the cloud and lower-tiered data centres.
whereas Goldman Sachs has a
... defensive earnings outlook relative to other companies under its coverage and that Megaport is on track to achieve FY20 revenue forecasts. Still, [it] retains a Neutral rating and $10.85 target, believing the earnings and balance sheet are reflected in the current valuation. It thinks the company’s solution is relevant for corporates that are likely to be accelerating the migration of infrastructure to the cloud. Ord Minnett agrees and anticipates further opportunities after the crisis has passed.
In a Covid-19 update, Megaport had already employed mobile extensively as around 60% of its staff were already working remotely before the crisis. Hence, moving to 100% was relatively smooth. Moreover, in February, Megaport flagged events in China and, concerned about potential delays in the supply chain, ordered networking equipment required to fill plans for 380 connections to data centres by June 2020.
Morgans expects that the outcome of the coronavirus crisis will result in existing customers consuming more services and it may well be the tipping point whereby Megaport crosses into the mainstream, helping individuals with their network connections to the cloud and making remote access available to many other dedicated point-to-point solutions.

(Hold)
 

Dona Ferentes

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another raise, another enthusiastic uptake, another scaleback for retail

SPP applications totalling in excess of $99 million, with a participation rate of over 60% of eligible shareholders. Based on the extremely strong demand from retail shareholders, an assessment of its capital requirements and feedback from Megaport’s retail shareholders, the Board of Megaport has determined to increase the equity raised under the SPP by 50% to $22.5 million (2,368,421 fully paid ordinary shares), with applicants to be scaled back on a pro-rata basis. Shares will be issued at $9.50 each.
oh well! Less than a quarter of what I applied for (went for full $30K).

SP now $13.75, an all-time high
 

Dona Ferentes

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SPP well oversubscribed. applied for $30K @ $9.50 received 713 shares = $6,773.50. Refund in bank tonight

bit of early bird profit taking today
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Dona Ferentes

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the serial entrepreneur strikes again
today the sell down of 5,000,000 shares in the Company held by Megaport Chairman, Mr Bevan Slattery. The sale of [the] shares (equivalent to 3.27% of the Company’s issued capital) was underwritten by UBS AG, Australia Branch at a price of $13.00 per share and distributed to institutional investors.
Following the sell down, Mr Slattery will continue to hold 13,037,607 shares in Megaport (equivalent to 8.52% of the Company’s issued capital). Mr Slattery intends to use the proceeds from the sale to facilitate ongoing investment opportunities.
Mr Slattery said, “I am absolutely committed to ensuring the success of Megaport and will continue to provide strategic direction as the Company continues to grow. I have no intention of selling any further shares in the next 12 months and intend to remain a significant shareholder in the Company for the foreseeable future. I look forward to continuing to lead the board and support the Company well into the future".
Slattery didn't participate in the rights issue a while back ($8, from memory) but sold some then to put into SLC (at a price higher than now)
 

Dona Ferentes

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it was for even less .... from 05 May 2019
Bevan Slattery has sold 3,300,000 shares (equivalent to 2.46% of issued capital) , underwritten by UBS AG, Australia Branch, at a price of $5.11 and distributed to institutional investors. Following the selldown, Mr Slattery will continue to hold 18,162,607 shares in the Company (equivalent to 13.52% of the Company's issued capital).

Mr Slattery will be using the proceeds from the sale to fund early stage development of two new technology ventures
but not a lot of belief from others (data centres, yadda yadda)
upload_2020-5-22_15-2-50.png
 

Dona Ferentes

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Two analysts discuss stocks:

Livewire Markets: Okay, let's round out our top five. Megaport, one of the new kids on the block in the Australian technology scene. Buy, hold, or sell?

Jun Bei Liu (Tribeca): It's a buy. I like Megaport because Megaport is probably the only cloud infrastructure company that you can find in this market. Yes, there's NEXTDC but NEXTDC is the future, essentially the future property trust. They build assets for companies to use and so that's more cloud-related and demand for that type of product is going through the roof and COVID certainly has speeded up that kind of adoption.

Now, Megaport is the future Telstra and it has innovated that space and it's global. It's the largest in its sector because it's the innovator and it's got enough runway for it to continue to expand global dominance. For me, it's one of the rare exposure to that space in the Australian market.

Livewire Markets: Okay. Eleanor, moving to the cloud, it's been one of the major trends in the structural shifts that we've seen accelerate through the past few months. Buy, hold, or sell on Megaport?

Eleanor Swanson (Firetrail): Jun Bei, I promise I'm not copying you but I'm a buyer on Megaport as well. What the company does is they facilitate the transfer of data by virtual cloud connections and they've got an amazing first mover advantage in building out their network footprint. The company has currently got 600 data centres, that is double their nearest competitor, and they've also managed to double the number of data centres installed on their network over the last 12 months.

We expect the company to continue these phenomenal growth rates. And in addition they've got a new product pipeline which we expect to support valuation going forward, so it's a buy.

(hold <all the way up>)
 

Dona Ferentes

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For the quarter ended June 2020, Megaport reported solid revenue growth of 12%, quarter on quarter, to total $17 million. Megaport’s year-on-year quarterly growth grew even more strongly, up by 66%.

Megaport’s recurring revenue base also continues to grow. The company’s monthly recurring revenue (MRR) totalled $5.7 million for the month of June. This was a year-on-year quarterly increase of 57%, and an increase of 4% on the previous quarter.

Megaport has a subscription-based billing model, which provides it with a sticky recurring revenue stream. It receives revenue from its network access points, as well as from the services that customers consume within its ecosystem.

Megaport also reported a strong quarter in terms of receipts from customers, which were up 44% on the prior quarter to $20 million. On a year-on-year basis, Megaport’s total customer base has now grown by 24% to reach 1,842.

Megaport also announced a strong cash position of $166.9 million at the end of June.

Megaport continues to grow the number of total installed data centres within its cloud ecosystem. Total installed data centres for Megaport has now have reached 366, which is 11% higher than last quarter, and 22% higher than the same quarter last year. The number of enabled data centres within its ecosystem also is growing strongly, up 11% on the prior quarter.

- already expected; some took opportunity to sell down, and others bought in.
 

Dona Ferentes

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up 10% on this news.
(The more acronyms the better, it would seem)

MP1 announces the upcoming release of Megaport Virtual Edge , a product innovation that will enable the hosting of Network Functions Virtualization, such as SD-WAN capabilities, directly on Megaport’s global Software Defined Network. With MVE customers will tap into Megaport’s extensive platform reach to deploy and extend their network functions closer to the edge, in real time, and without the need to deploy hardware. Megaport and Cisco are collaborating to enable Cisco SD-WAN as the first use case on MVE.
“As enterprises and service providers begin to fully understand the benefits of SD-WAN, the ability for Megaport customers to easily and in minutes ‘spin up’ SD-WAN virtual appliances around the world on our platform is a big enabler for global organisations,” said Vincent English, CEO of Megaport. “Having these virtual appliances fully integrated into the Megaport Interconnection Platform leveraging our multicloud connectivity takes this to another level.”
 

bk1

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Full year results will be released pre ASX open tomorrow followed by a briefing. The timing of the two events ( today and tomorrow) ....serendipity?
 
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