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wonder when is their regulatory price review?
DBS upgrades NetLink to &lsquo buy&rsquo on attractive yield, lower risk-free rate
DBS Group Research is raising its target price on NetLink from S$0.84 to S$0.98.
DBS Group Research upgraded its call on ??NetLink NBN Trust : CJLU 0% from &ldquo hold&rdquo to &ldquo buy&rdquo as it now projects the stock to yield an &ldquo attractive&rdquo 6.5 per cent amid lower risk-free rate.
The research house has raised its target price on NetLink, which owns and operates fibre network infrastructure in Singapore, from S$0.84 to S$0.98 to reflect its expectations for the trust&rsquo s distribution per unit (DPU) to rise by 2 per cent annually over the next few years.
In a report on Wednesday (Jan 11), analyst Sachin Mittal said the new target price reflects the trust&rsquo s resilient nature of distributions amid current market volatility.
In his view, high inflation should not eat into NetLink&rsquo s distributions as inflationary pressures on capital expenditure and operating expenses have been taken into consideration under the regulated asset base model.
He expects NetLink to have a higher regulatory weighted average cost of capital from January 2023 to December 2027 due to the risk-free rate being higher than 2.1 per cent, which was the risk-free rate when Netlink was first listed.
The recent shrinking of the Singapore&rsquo s government 10-year bond yield now also implies an &ldquo attractive&rdquo yield spread of 360 basis points (bps) for NetLink, compared to its last 12-month average of 290 bps, Mittal noted.
Mittal forecasts Singapore&rsquo s 10-year bond yield to further drop to 2.8 per cent by the end of 2023, after it dipped to 2.9 per cent from 3.5 per cent in November 2022. &ldquo Our 3.0 per cent risk-free rate assumption is conservative,&rdquo he added.
He also expects NetLink&rsquo s yield spread to further narrow towards 250 bps to reflect its lower risk profile. In his view, NetLink may raise its distributions by only 2 to 3 per cent as the trust focuses on long-term sustainability of its distributions.
&ldquo Any sharp rise in the risk-free rate from our base-case of 3.0 per cent to 3.5 per cent coupled with NetLink&rsquo s yield spread hovering around 350 bps may lead to our bear-case valuation of S$0.77,&rdquo Mittal added.
Thanks.
Did they provide 5G revenue number or %?
Did they provide 5G revenue number or %?
Driftking ( Date: 12-Dec-2022 11:26) Posted:
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ok thanks 😊
beetlejuice ( Date: 12-Dec-2022 09:22) Posted:
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Wow, this one finally got noticed.
Bought some at 82 cts last wed.
Total now is 38000 shares at average cost of 83.37 cts. 💰 🧧
5G is not everything wireless, you still need the respective wired nodes/infrastructure to connect to somewhere. You do know your mobile network are connected through receivers inside buildings that are still connected via wires?
If you' ve read NLT' s info in their announcement/reports on the recurring question to what will happen to NLT in 5G era, there' s underlying infrastructure to be built that NLT has business with.
If you' ve read NLT' s info in their announcement/reports on the recurring question to what will happen to NLT in 5G era, there' s underlying infrastructure to be built that NLT has business with.
investshare ( Date: 12-Dec-2022 08:35) Posted:
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I cannot tell the difference as I frequently use my mobile to hotspot my laptop.
fatpig ( Date: 12-Dec-2022 09:11) Posted:
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Likely due to NetLink undergoing a regulatory review with IMDA that is expected to complete by the first half of 2023.
At this price, yield is at least 6% if dividend amt is maintained.
But so far, historical dividends still trending up.
Fallingman ( Date: 11-Dec-2022 21:37) Posted:
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Internet local land by cable max speed is 100G/s
5G wireless design max speed is 20G/s. So far Qcom best chip can reach 10G/s
5G wireless design max speed is 20G/s. So far Qcom best chip can reach 10G/s
investshare ( Date: 12-Dec-2022 08:35) Posted:
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Honest question, do we still need home land cable in 5G era?
Just like many do not have line phone now..
Just like many do not have line phone now..
What Happened to netlink trust dropping back to 81 cents?
beetlejuice ( Date: 03-Nov-2022 11:20) Posted:
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I increased my holding by 50% last month.
Monopoly with a very boring business & temasek holding more than 25%.
🧧 💰
WBdisciple ( Date: 03-Nov-2022 10:49) Posted:
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Missed opportunity when it dropped to 80 cents...
NetLink NBN Trust posts 36% jump in H1 net profit to S$54.6m
FIBRE network infrastructure provider NetLink NBN Trust on Wednesday (Nov 2) reported a 36.1 per cent jump in net profit to S$54.6 million for the half year ended Sep 30, compared to the same period last year.
The jump in net profit came despite a slower 6.2 per cent rise in revenue to S$199.6 million in H1, compared to the year-ago period, NetLink&rsquo s interim financial statements showed. This was due to significantly lower operating expenses in H1, the company noted. In H1 FY22, there was a S$12.4 million remeasurement loss due to change in rental rates upon the renewal of its central office lease agreements.
At the same time, there were higher ancillary project revenue, connections revenue and co-location and installation-related revenue, all of which helped to offset lower central office revenue, the company said.
Residential connections remained the key contributor to NetLink&rsquo s overall revenue, accounting for 61 per cent of total revenue. However, this segment recorded a rise in revenue of only 1.4 per cent in H1, compared to the same period last year.
Meanwhile, revenue from ancillary projects jumped 157 per cent &ndash the largest increase &ndash to S$11.8 million due to more diversion projects being completed, the company said.
NetLink reported a distribution per unit of 2.62 Singapore cents for H1, an increase of 2.3 per cent from the same period last year.
The group said it is continuing the expansion of its network to reach new residential dwellings and commercial buildings.
It said it plans to collaborate with the requesting licensees and retail service providers to increase subscriptions of fibre broadband plans from first-time users, in view of Singapore&rsquo s digital inclusion effort. It will also continue partnerships with them to support their efforts to acquire new businesses.
This means NetLink will extend customised pricings to support requesting licensees participating in projects involving multi-site or nationwide connectivity, and make available offerings to facilitate digital transformation projects of small and medium enterprises, it said.
Wow, H1 dividend of 2.62 cts per share declared.
XD 15 Nov, pay date 30 Nov.
At tdy's closing price & factor in last paid dividend of 2.57 cts, that's 6% p.a.
💰 🧧
NetLink NBN Trust losing attractiveness as a dividend-yielding safe haven: Maybank
NetLink Trust designs, builds, owns and operates the passive fibre network infrastructure of Singapore.
With strong earnings visibility and stability, NetLink NBN Trust is a defensive play amid the current backdrop of rising inflation and a potential economic slowdown, says Maybank Securities Research analyst Kelvin Tan.
That said, ongoing regulatory fibre pricing review remains a key overhang, adds Tan, and NetLink Trust is losing attractiveness as a dividend-yielding safe haven.
NetLink Trust designs, builds, owns and operates the passive fibre network infrastructure of Singapore. In an Oct 4 note, Tan is maintaining this &ldquo hold&rdquo call with a target price of $1.00, which represents a 10% upside.
&ldquo On the back of inflationary pressures and higher interest rates, Netlink Trust&rsquo s financial costs are well-hedged, with 76% of debt fixed at 1% until May 2026,&rdquo writes Tan.
However, modest growth in distribution per unit (DPU) reduces the attractiveness of NetLink Trust as an income-yielding investment. NetLink Trust&rsquo s dividend spread over bond yields and other interest-yielding assets has not widened since interest rates started to climb this year, Tan adds.
&ldquo On the regulatory review, we expect a mild decline in the fibre price for residential connections. This is in our opinion, unlikely to impact dividend payout as higher borrowings or lower capital expenditure can tide it through any near-term shortfall,&rdquo says Tan.
Netlink Trust operates the sole passive backbone for Singapore&rsquo s nationwide fibre network with a mandated 100% of homes passed. As it has a virtual monopoly, ebitda margin is high at 70%, notes Tan. &ldquo More than 90% of revenue falls under a return on asset base (RAB) tariff regime based on a 7% pre-tax weighted average cost of capital (WACC). Tariffs are set over a five-year period with the current rate lasting until December.&rdquo
Residential connection revenue, which follows regulated rate structure, represents the bulk (about 62.5%) of the business.
ESG issues
Tan has assigned NetLink Trust an ESG score of 55 &ldquo based on its aggregated quantitative, qualitative and target-based metrics&rdquo .
&ldquo NetLink Trust provides fibre network services. This exposes it to environmental risks. In particular, energy is consumed to provide power to co-location rooms but NetLink Trust has no direct control over energy consumed by its customers&rsquo equipment,&rdquo writes Tan.
It is also exposed to data centres&rsquo environmental risks, as many Singapore data centres, in the middle of their lifespan, were designed without sustainability and energy conservation in mind. That said, the trust has no direct control over its customers&rsquo power consumption, adds Tan.
NetLink Trust generated and disposed of an average of 0.44% of fibre scraps (excess fibre too short to be reused) against fibre cables issued. This is below its 2.5% FY2021 target.
NetLink Trust recovered 391.4 tonnes of fibre cables from cable diversion. &ldquo These recovered fibre cables cannot be reused and will be disposed of at a National Environment Agency-approved facility for incineration.&rdquo
In FY2020, NetLink Trust invested $0.85 million to replace fan coil units in co-location rooms to improve the energy efficiency of the cooling system by 30%. &ldquo Going forward, more initiatives will be rolled out across its co-location rooms to reduce energy consumption.&rdquo
Meanwhile, the staff turnover rate of 17.7% is higher than the high-tech industry&rsquo s norm of 15.9%.
The total remuneration of NetLink Trust&rsquo s CEO and top five key management personnel amounts to $4.3 million, or 5.5% of FY2020 profit after tax and 15.5% of staff cost. NetLink Trust&rsquo s independent auditor has been Deloitte & Touche since its listing in 2017.
Only buy this for the greater than 5% & consistently higher annual dividends.
Better than SSB or any FDs.
Joelton ( Date: 18-Aug-2022 09:00) Posted:
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CGS-CIMB lowers TP on NetLink Trust amid higher interest rates
CGS-CIMB on Tuesday (Aug 16) lowered its target price on NetLink NBN Trust to S$1.04 from S$1.10 prior, while reiterating its &ldquo add&rdquo call on the stock.
Analyst Ong Khang Chuen maintained his earnings forecasts for NetLink, but factored in the rising interest rate environment in lowering the target. He nevertheless believes that the company is a &ldquo defensive play amid the current backdrop of rising inflation and a potential economic slowdown, given its strong earnings visibility and stability&rdquo . NetLink&rsquo s Q1 FY2023 net profit of S$27.6 million, up 11.3 per cent, was in line with CGS-CIMB&rsquo s expectations. Its topline grew 4.8 per cent to S$97.9 million, driven by higher ancillary project revenue and connections revenue.
Construction activities provided a further boost, with ancillary project revenue surging 136 per cent to S$4.4 million. This was the key driver for NetLink&rsquo s Q1 revenue growth, Ong noted. The trust also saw healthy growth across all fibre connection segments. The fastest growth was recorded in non-building address point (NBAP) and segment connections, as NetLink supplemented local telcos&rsquo rollout of 5G infrastructure and projects that required a higher level of network resiliency, Ong highlighted. He sees NetLink&rsquo s balance sheet remaining &ldquo robust&rdquo , with good debt headroom for inorganic growth opportunities. Net gearing stood at 20.8 per cent as of end June.
&ldquo NetLink continues to explore opportunities to invest in telecoms infrastructure businesses overseas that are likely to generate stable cashflows,&rdquo said Ong.
He noted that potential re-rating catalysts include earnings-accretive acquisitions and stronger-than-expected growth in NBAP connections as NetLink benefits from telcos&rsquo 5G rollout. Downside risks include lower-than-expected interconnection offer pricing in the upcoming review.
Was queueing at 94cts for past few trading days but got nothing.
Just got 9000 shares at 94.5cts.
So now got total 20000 shares at average of 86.1cts.
Joelton ( Date: 16-Aug-2022 09:12) Posted:
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NetLink Trust posts 11.3% rise in Q1 earnings to S$27.6 million amid higher revenue
FIBRE network infrastructure owner NetLink NBN Trust reported a 11.3 per cent increase in net profit to S$27.6 million for the first quarter of its 2023 financial year ended June 30, 2022, from S$24.8 million a year ago, according to a bourse filing on Monday (Aug 15).
Revenue for the quarter grew by S$4.5 million or 4.8 per cent from the year-ago period to S$97.9 million, from S$93.4 million previously.
The revenue increase was mainly due to higher ancillary project revenue, revenue from residential, non-residential, NBAP (non-building address point) and segment connections and co-location revenue, though this was partially offset by lower central office revenue, said its manager.
It added that ancillary project revenue contributed most significantly to the increase, as more diversion projects were completed as compared to last year.
At 62 per cent, residential connection revenue remains the group&rsquo s largest revenue contributor.
As at June 30, there were nearly 1.47 million residential connections, representing a 1.4 per cent year-on-year rise.
NetLink&rsquo s earnings before interest, taxes, depreciation and amortisation (Ebitda) for Q1 FY2023, at S$73 million, were 5 per cent higher than last year&rsquo s Q1 Ebitda of S$69.5 million, as a result of the higher revenue.
The group&rsquo s net cash from operating activities of S$88.1 million in Q1 was S$21.8 million higher than the same period last year, due to improved working capital and higher profits, the manager said.