Broker Name: CGS International Securities
Date of Report: November 5, 2025
Excerpt from CGS International Securities report.
- Netlink NBN Trust reported a steady 1HFY26 DPU of 2.71 Scts, up 1.1% YoY, supported by growth in NBAP, segment business, and ancillary project/co-location revenues, which cushioned declines in connections revenue.
- The report maintains an “Add” rating, citing defensive yield (~5.5%) and irreplaceable assets, with the target price raised to S\$1.05 due to a lower risk-free rate assumption.
- Connection revenue was affected by telcos deactivating dormant lines, but management expects gradual recovery; new QPDS issuance is set to enhance tax efficiency and partly offset lower profits.
- Operating expenses and finance costs rose moderately, while higher depreciation was noted as a new central office turned operational.
- Despite trimming FY26-28F profit and DPU forecasts (by ~0.7-2.1%), operating cashflows are expected to comfortably cover distributions.
- Key catalysts include increased NBAP/segment connections, new HDB developments, and government infrastructure projects; downside risks include regulatory pricing and construction delays.
- Netlink maintains strong ESG credentials with 100% fibre coverage, 99.99% network availability, and a target to reduce emissions by 50% by FY30.
Report Summary
– Netlink NBN Trust delivers resilient yield and stable performance amid connection revenue hiccups, aided by diversified revenue streams and enhanced tax efficiency. The broker remains positive, projecting continued steady cashflows, while highlighting regulatory and operational risks.
Above is an excerpt from a report by CGS International Securities. Clients of CGS International Securities can be the first to access the full report from the CGS International Securities website: https://www.cgsi.com/
