Broker Name: CGS International
Date of Report: November 5, 2025
Excerpt from CGS International report:
- Netlink NBN Trust reported 1HFY26 DPU of 2.71 Scts (+1.1% yoy), in line with forecasts, as ancillary and segment revenues cushioned weaker connections revenue.
- Ongoing telco deactivation of dormant lines led to a net loss of ~10,000 connections in 1HFY26, but management expects gradual recovery; new qualifying project debt securities (QPDS) will enhance tax efficiency and help offset profit declines.
- Revenue for 1HFY26 grew 1.1% yoy to S\$207.1m. Operating cash flows are forecasted to cover distributions, with FY26-28F DPU estimates trimmed by 0.7-2.1% but target price raised to S\$1.05 due to a lower risk-free rate outlook.
- Netlink’s defensive yield (5.5% for FY26F), strong cash generation, and irreplaceable network assets underpin the Add rating, but risks include regulatory changes and HDB construction disruptions.
- ESG: Netlink maintained 99.99% network availability and set targets to reduce Scope 1 and 2 emissions by 50% by FY30 and reach net zero by 2050, achieving a 61.8% reduction as of FY24.
Report Summary:
- Netlink NBN Trust’s performance remains resilient despite short-term connection fluctuations, with strong cash flow and proactive tax and ESG strategies supporting its outlook and 5.5% yield.
- The broker maintains an Add rating with a raised target price of S\$1.05, expecting gradual recovery in connections and continued defensive performance, while noting regulatory and operational risks.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgsi.com.sg
