NetLink Trust *Official* (SGX:CJLU)

[wutawa]

No, he was saying with 5G plan, no one needs to have a fibre plan anymore in their house. One can simply do tethering from his phone for all other devices in the house.

Hopefully 5g plan comes with unlimited data like fibre then.

 

[madtari]

Even with unlimited data, usually there will be a fair usage policy... After the daily limit, it will be throttled down to snail speed. And the plan isn't going to be cheap... Otherwise everyone will go and cancel their home BB and rely only on 1 phone.

Hopefully 5g plan comes with unlimited data like fibre then.

 

[wira]

You are absolutely right... 5G is widely suggested as a potential catalyst for NLT exactly because they still require fibre backhaul. For those technically inclined (or bother to read up more), they would know 5G operates at a higher frequency, and will need a higher density of cell bases, thus Telco will need more fibre connections, and the most lucrative business for NLT is NBAP... Dont listen to PNDR's crap. lol...

Thanks for the explanation.

 

[wutawa]

Even with unlimited data, usually there will be a fair policy usage... After the daily limit, it will be throttled down to snail speed. And the plan isn't going to be cheap... Otherwise everyone will go and cancel their home BB and reply only on 1 phone.

Then it is unlikely for people to do away with fibre like what 5408854088 had said, at least for me.

 

[5408854088]

I suppose 5G and Fibre is not about mutually exclusive?

Each household can still contain a fibre point which can be connected to a 5G router, catering to individual wireless devices in the household. (This is of course based on an individual household level).

At the larger picture, your handphone that wishes to utilise 5G has to connect to a base station. With the short range of 5G compared to LTE, more base station is expected which in turns require more fibre cabling.

ya, dont think it is mutually exclusive, more of mutually inclusive since 5G still relies on fibre optics infrastructure. it is perhaps more of where the fibre point is terminated, and who will be paying for it. if household dont use their fibre point, then hopefully the revenue gap will be addressed by other entities, otherwise their revenue will take a huge hit.

there could be options for 5G broadband or fibre broadband in time to come. there seems to be an option of converting this 5G mobile network signal into wifi as well. if on 5G broadband, household fibre point may not be requried since the modem can pick up the 5G signal from the nearest base station and then rebroadcast it. if on fibre broadband, fibre point is still needed to connect to modem then to router.

 

[5408854088]

I don't think that scenario is likely... Even with relatively lower frequency of 5ghz WiFi, home coverage is very jia lat... One needs either WiFi repeater or to use 2.4ghz for wider coverage and better penetration thru wall... And then you are now talking about 26ghz 5G network... How many hot-spot do you think you will need to plant all around your house for a seamless full coverage? Will you do that?

i guess this will largely depends on how extensive the regulators want the network coverage to be and how much they want to invest on the infrastructure. just like how we move from 2G to 3G, and from 3G to 4G. i think that our 4G coverage has been very extensive as most places there is 4G network. it will also take time for implementation, and for the technology to mature and be mainstream. as technology advances, there should be more solutions overcome current limitations. even now we have mesh wifi and wifi 6.

 

[5408854088]

​

Hopefully 5g plan comes with unlimited data like fibre then.

Even with unlimited data, usually there will be a fair usage policy... After the daily limit, it will be throttled down to snail speed. And the plan isn't going to be cheap... Otherwise everyone will go and cancel their home BB and rely only on 1 phone.

there could be options of keeping 5G mobile data and 5G broadband usage into separate bucket, or merging them into one bucket, really depends on how the telcos wants to play the game and how regulators want to control them. even as of now, it is a given thing that fibre broadband comes with unlimited usage, and some telco already provide unlimited mobile data. i would think that for a start, 5G mobile data and 5G broadband will be expensive and limited. things may get better when it matures and become mainstream. just think of how expensive internet and mobile data were in the past as compared to now.

 

[5408854088]

Don't worries.

Nothing will affect NetLink share in next 2-3 yrs for stable DPU. After that, DYOD.

Buy on dip during market weakness.

Sent from Mercedes-Benz E250 using GAGT

good information

 

[netzach]

this guy is rock steady lol.
think Covid bottom, it went to 0.78 or so & it went back up lol.
hardly move already then, this is 1 of the best or rather the most stable counters in the whole of STI lol.
hardly moves a single bit at all.
if you wanna sleep easy at night, this would be 1 of the very best to hold on to lol.
VICOM, Netlink, lol.

Ascendas is effing good too, king of REITs along with the Maples (excluding Maple NAC)

 

[hound297]

No, he was saying with 5G plan, no one needs to have a fibre plan anymore in their house. One can simply do tethering from his phone for all other devices in the house.

This is what I am afraid of. Hopefully, there is a replacement if this comes true because those income from installing access points (install for 5G) are not re-current.

Unless... Access point needs maintenance boh?
Can get recurrent income from them ?

 

[5408854088]

https://www.straitstimes.com/tech/u...g-planned-to-secure-singapores-digital-future

 

[5408854088]

Amazon to invest $13.7b in satellite broadband plan

https://www.straitstimes.com/asia/australianz/amazon-to-invest-137b-in-satellite-broadband-plan

 

[5408854088]

NetLink logs 12.4% rise in Q1 PAT despite manpower constraints

FIBRE-optic cable owner NetLink NBN Trust posted a 12.4 per cent increase in profit after tax (PAT) to S$23.5 million for Q1 FY2020 ended June, even as its top line shrank amid restricted manpower and access amid the Covid-19 pandemic.

The mainboard-listed trust's Q1 revenue dipped 3.3 per cent to S$89 million, on the back of decreases in activity-based installation and diversion revenues. This was partly cushioned by a S$2.9 million rise in revenue from fibre connections, given a 3.3 per cent increase in residential connections.

NetLink’s Q1 installation revenue fell by S$4.7 million, due to fewer orders and service activations than a year ago, when StarHub was migrating its coaxial cable subscribers onto fibre. The firm was also hit by fewer contractor resources and restricted access to homes and buildings amid Covid-19, which affected the completion of installation works.

Meanwhile, diversion revenue fell by S$900,000, as stoppages of construction work nation-wide impacted cable-diversion work, leading to fewer completed and billed projects.

Even so, NetLink's Ebitda (earnings before interest, taxes, depreciation and amortisation) rose by 3.4 per cent to S$68.8 million, due to the recording of government relief grants under other income.

With higher profits and cash received for property tax rebates, NetLink strengthened its net operating cash flows to S$65.1 million, S$8.6 million higher than a year ago.

Covid-19 continues to impact the company, with the reduced availability of contractors’ manpower resources having constrained its ability to fulfil service requests from April. Nevertheless, NetLink does not expect the delays in fulfilling requests to have a long-term impact on its revenue.

The company said in a statement: “Despite temporary operational issues resulting from the Covid-19 pandemic, NetLink’s resilient business model is well-supported by predictable revenue streams. With a strong balance sheet and liquidity underpinned by stable cash flows and the availability of bank facilities, the group is well-positioned to continue to invest and expand its network’s capabilities and resiliency.”

NetLink units closed at S$0.97 on Wednesday, up 0.52 per cent, before the results announcement.

https://www.businesstimes.com.sg/co...4-rise-in-q1-pat-despite-manpower-constraints

 

[Shion]

Analysts divided on NetLink prospects after mixed 1Q results

Analysts divided on NetLink prospects after mixed 1Q results

https://www.theedgesingapore.com/ca...ided-netlink-prospects-after-mixed-1q-results

Analysts are divided on the prospects of NetLink NBN Trust after the provider of fibre network services posted a mixed set of results for 1Q FY20 ended June 30.

On one hand, Maybank Kim Eng has kept its “buy” rating for the trust albeit with a lower target price of $1.07 from $1.08 previously.

On the other hand, DBS Group Research has maintained its “hold” recommendation for the trust with an unchanged target price of $1.02.

NetLink reported earnings growth of 12.4% to $23.5 million from $20.9 million a year ago.

Revenue, however, fell 3.3% y-o-y to $89 million from $92 million.

Maybank KE says it continues to favour NetLink because 95% of its 1Q FY21 revenue is pegged to recurring cash flows and long-term contracts.

Moreover, the trust’s estimated FY21 yield of 5% offers a better dividend visibility than other yield plays given its stable business.

“NetLink should be able to fulfil its installation and diversion order backlog once its manpower situation eases,” Maybank KE analyst Kareen Chan writes in a note dated Aug 6.

While DBS acknowledges that the trust is currently offering a reasonable yield of 5% at current levels, there are risks ahead.

The brokerage warns that NetLink’s earnings before interest, tax, depreciation and amortisation could be “adversely impacted” from FY23 onwards.

This will come on the possibility that the trust’s regulatory weighted average cost of capital of 7% could be lowered amid a low interest rate environment, it points out.

As at 3.01 pm, Netlink was flat at 97 cents with 11.9 million units changed hands.

 

[Shion]

Broker's take: CGS-CIMB calls NetLink defensive yield play, initiates coverage with 'add'

Broker's take: CGS-CIMB calls NetLink defensive yield play, initiates coverage with 'add'

https://www.businesstimes.com.sg/co...-defensive-yield-play-initiates-coverage-with

CGS-CIMB has initiated coverage on NetLink NBN Trust with "add" and a target price of S$1.10, viewing the fibre-optic cable owner as a defensive yield play amid market volatility, given its high barriers to entry, strong earnings visibility and stability.

Units of NetLink were trading up 0.5 Singapore cent or 0.5 per cent at 97 cents as at 1.13pm on Thursday.

CGS-CIMB analyst Ong Khang Chuen said in the current low-interest-rate environment, the trust offers an attractive dividend yield of about 5.4 per cent based on CGS-CIMB's fiscal 2021 forecast. He also sees a potential total return of 19 per cent.

"We believe NetLink's business is resilient to economic and business cycles, given the utility-like nature of broadband," he said.

NetLink is the sole network provider of residential fibre broadband in Singapore, with over 1.43 million residential connections or a 94 per cent penetration rate as at end-June 2020.

CGS-CIMB sees a lower risk of dividend cuts for NetLink versus real estate investment trusts (Reits), which are expecting weaker occupancy rates and rental reversions due to the Covid-19 impact.

For Maybank Kim Eng analyst Kareen Chan, certain Reits may also exhibit higher distribution per unit downside from capital preservation on weaker outlook. Hence, NetLink's less volatile business offers a better yield play over said Reits and telcos which are seeing a decline in average revenue per user.

As a "shelter to wait out the storm", the trust is also a good option for investors to switch from banks for relatively higher dividend sustainability, seeing its strong cash flow is backed by fixed regulatory pricing till end-2022, she said.

Maybank Kim Eng reiterated its "buy" call on NetLink with an unchanged target price of S$1.07 in a separate research note dated Tuesday.

The Monetary Authority of Singapore's move to call on banks to cap their FY2020 estimate dividend yields may cause lenders' average dividend yield for the fiscal year to fall to 4 per cent, Ms Chan added.

 

[P R N D]

Buy when dip now.

When nearer to DPU in Nov, price will starting to surge up in mid end October...

Sent from Mercedes-Benz E250 using GAGT

 

[5408854088]

NetLink NBN Management Pte. Ltd., as trustee-manager of NetLink NBN Trust, will be announcing the financial results of NetLink NBN Trust for the half year ended 30 September 2020, after the close of trading on 6 November 2020.

https://links.sgx.com/1.0.0/corpora...fb856efe8a3a1e7722f6d3e44626ef917e4349d6615ce

 

[Shion]

Netlink NBN Trust declares 0.4% higher 1H DPU of 2.53 cents

Netlink NBN Trust declares 0.4% higher 1H DPU of 2.53 cents

https://www.theedgesingapore.com/ca...nbn-trust-declares-04-higher-1h-dpu-253-cents

The manager of Netlink NBN Trust has declared distribution per unit (DPU) of 2.53 cents for the 1HFY2021, up 0.4% from the 2.52 cents posted a year ago.

This comes on the back of 1HFY2021 earnings of $44.8 million, up 1.5% from the $44.1 million registered in 1HFY2020.

Revenue for the half-year period dipped by 2.5% y-o-y to $181.5 million, mainly due to lower installation-related revenue, diversion revenue and revenue from ducts and manholes services.

The group reported higher earnings before interest, taxes, depreciation and amortisation (EBITDA) of $139.7 million, up 3.4% y-o-y, and 1.5% higher y-o-y profit after tax (PAT) of $44.8 million.

The lower revenue was partially offset by higher residential connections revenue.

According to Netlink, the group’s fibre business revenue continues to be supported by the growing number of residential connections.

Recurring revenue from residential connections climbed 4.1% y-o-y to $118.5 million in 1HFY2021, contributing to 65.3% of the group’s total revenue.

As at Sept 30, there were 1,437,360 residential connections as compared to 1,410,627 connections the year before.

Installation-related revenue fell 44.3% y-o-y to $6.9 million mainly due to lower installation charges from few installation orders and service activations as StarHub was migrating its coaxial subscribers onto fibre.

There was a lower availability of contractor resources and restricted access to home and buildings from April to August due to Covid-19, which affected the completion of installation works during the half-year period.

Diversion revenue fell 47.4% y-o-y to $3.3 million due to fewer completed projects. The stoppage of construction work around the nation affected cable diversion work, says the group.

Ducts and manholes service revenue dropped 6% y-o-y to $14.6 million due to the lower completion of joint-build projects and a reduction in service revenue from the leasing of NetLink’s ducts.

As at Sept 30, cash and cash equivalents stood at $181.4 million.

NetLink says it has a “resilient” business model that is well-supported by predictable revenue streams from monthly recurring charges for fibre connections to residential and non-residential premises, and non-building address points (NBAP) locations; and contracted revenues.

“The Covid-19 situation has highlighted the importance of fibre broadband as an essential service to end-users’ daily lives. Fibre broadband is considered a necessity given the increasing number of end-users who are reliant on fibre broadband services for a wide range of activities,” says Tong Yew Heng, CEO of the manager.

“The NetLink Group will continue to work closely with industry partners to support Singapore’s digitalisation efforts even as we grow our residential connections by connecting new homes and supporting initiatives such as the Home Access Programme,” he adds.

Units in NetLink closed 1.5 cents higher or 1.6% up at 97.5 cents on Nov 6.

 

[Shion]

'Buy' NetLink for resilient 1H21 earnings, fibre network potential: analysts

'Buy' NetLink for resilient 1H21 earnings, fibre network potential: analysts

https://www.theedgesingapore.com/ca...h21-earnings-fibre-network-potential-analysts

Following resilient earnings reported in 1HFY2021, four in five brokerages are recommending investors to accumulate units in NetLink NBN Trust (NetLink Trust).

On Nov 1, NetLink NBN Trust declared distribution per unit (DPU) of 2.53 cents for the 1HFY2021, up 0.4% from the 2.52 cents posted a year ago. The increased DPU comes on the back of 1HFY2021 earnings of $44.8 million, up 1.5% from the $44.1 million registered in 1HFY2020.

NLT designs, builds, owns and operates the fibre network infrastructure which is the foundation of Singapore’s Next Generation Nationwide Broadband Network.

CGS-CIMB, OCBC Investment Research, Maybank Kim Eng and UOB Kay Hian are all maintaining their ‘buy’ or ‘add’ calls on the company. Only DBS Group Research differ, maintaining ‘hold’ on the company with a target price of $1.02.

“We are more conservative in our valuation,” say DBS Group Research analysts Sachin Mittal and Lim Rui Wen in a Nov 10 note. “We expect annual capex to hover between $55 to $60 million in the long term and any potential acquisition or rise in capex could be a positive surprise. Any reduction in regulatory WACC in the next review period could be a negative surprise.”

Mittal and Lim note that the 2QFY2021 results recorded a one-off tax surprise. “2QFY2021 revenue $94.1 million (-2% y-o-y/ +4% q-o-q) and net profit at $21.3 million (-8% y-o-y/ -9% q-o-q) were broadly inline except for the tax deduction of $3.1 million.”

1HFY2021 revenue was lower by 2.5% y-o-y due to lower installation-related revenue, note the analysts. This is in comparison to FY2020, which saw Starhub customer migration contributing strongly to installation-related revenue. 2QFY2021 EBITDA margin improved to 75.4% (2Q19: 73.0%) due to higher proportion of revenue from residential connections and government relief grants received.

Covid-19 also impacted operations earlier this year. During the quarter, lower availability of contractors affected diversion revenue due to stoppages of works nationwide, while ducts and manholes revenue saw lower completion of joint projects with requesting licensees and reduction of leasing revenue from NetLink Trust’s ducts. Diversion revenue will continue to be spread over the next six to nine months as some construction works are being pushed back, say Mittal and Lim.

More optimistic are OCBC Investment Research, Maybank Kim Eng and UOB Kay Hian, who recommend ‘buy’ with target prices $1.10, $1.11 and $1.08 respectively. CGS-CIMB is recommending ‘add’ with a target price of $1.10.

CGS-CIMB analyst Ong Khang Chuen notes that NLT continued to see growth in all three types of fibre connections, and we believe the current growth trajectory is sustainable. Its residential segment reached 1.44 million connections in 2QFY21 (+0.6% q-o-q, +1.9% y-o-y) as NLT reached more new homes and added connections to low-income households via initiatives such as IMDA’s Home Access programme.

Non-residential connections resumed growth to 476,000 (+1.3% q-o-q, +1.8% q-o-q) after a dip in 1QFY21, which saw the circuit breaker impacting new additions. The non-building address point (NBAP) segment saw the fastest connection growth to 1,847 (+4.2% q-o-q, +17.7% y-o-y) as NLT supplemented local telcos’ rollout of 5G infrastructure, he adds.

In its investment thesis on NetLink Trust, OCBC Investment Research analysts note the growing prominence and potential of the company. “With the increasing usage of fibre broadband services for day-to-day activities driven by growing demand for connectivity and rapid broad-based growth in data consumption, we believe NLT NBN has a resilient business model, and hence able to weather through various economic cycles given the defensive nature of its income streams.”

“Furthermore, we expect NLT NBN to be a key participant of growth in other connected services within the non-residential and NBAP space, especially with Singapore’s push to transform into a digital economy.”

As at 2.01pm, shares in NetLink Trust are trading at 0.5 cents lower, or 0.51% down, at 97 cents.

 

[raintr33]

'Buy' NetLink for resilient 1H21 earnings, fibre network potential: analysts


https://www.theedgesingapore.com/cap...ntial-analysts

Thanks for the article!
Luckily my 11.11 spendings can be covered by this dividend.

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