Modine Manufacturing Company
Industrials · Building Products
Structural: pure-play thermal pick-and-shovel on the AI datacenter buildout. Climate Solutions revenue ~doubled FY24→FY25 on Airedale CDU + chiller demand; datacenter now the fastest-growing vertical inside the segment. Margin mix shifting up as datacenter overtakes legacy HVAC.
- Hyperscaler liquid-cooling capex inflection - Blackwell + GB200 racks require CDUs at 1:1 or higher attach
- Airedale (UK chiller acquisition, 2023) gives in-house chilled-water loop; cross-sells with CDU at rack level
- Performance Technologies margin expansion via 80/20 SKU prune; EV thermal a secondary leg
- Climate Solutions backlog visibility 12-18 months on named hyperscale programs
- Asset-light vs cold-plate peers ($VRT $CLS); higher ROIC at scale
- Cyclical industrial multiple compressing as datacenter % of mix grows - bull thesis is multiple re-rate, not just numbers
- Hyperscaler concentration risk: top 3 customers >40% of Climate Solutions
- Performance Technologies still ~half of revenue, exposed to auto/truck cycle
- Competitive intensity rising: $VRT Liebert CDU, Schneider, Stulz all expanding liquid offerings
- FY25 stock +200% - sentiment-priced; any CDU order miss compresses multiple fast
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