At the last traded share price of around S$0.95, the Trust provides a prospective dividend yield of around 5.3%. Distribution per unit (DPU) hit 4.88 cents in FY 2018/2019 and is projected to slightly exceed 5 cents for FY 2019/2022. NBAP can be viewed as a proxy for Singapore’s Smart Nation ambitions as well as the upcoming implementation of 5G networks. For residential fibre connections, Fibre is able to support wireless access and works hand-in-hand with WiFi hotspots and 4G/5G technologies. Co-locatio… depreciation), the return of capital employed (in growing connections) and operating expenditure.As NetLink NBN Trust has only been listed for around 2 years plus, the financial information provided only consists of one full financial year, as shown above. Segment Fibre: Provides “segment” fibre connections to Requesting Licensees 2. However, a mitigating factor is that this only makes up less than 10% of total revenue.Another risk is that IMDA may lower the regulated price for the Trust during its next review period, as this is based on the weighted average cost of capital (WACC) of 7% currently. The NBAP segment is also expected to grow and contribute more significantly to overall revenue in future years as 5G infrastructure takes root in Singapore.© 2015 - 2020 The Asia Report. For non-residential connections, the group will work with government agencies with a focus on targeting SMEs. However, capital expenditure is also expected to be higher than last year.Singapore is working towards the eventual commercialisation of 5G broadband technology, and NetLink Group is supporting IMDA’s objectives in order for the successful deployment of 5G infrastructure and to grow the 5G ecosystem. The NetLink Group’s extensive network provides nationwide coverage to residential homes and non-residential premises in mainland Singapore and its connected islands.As the sole appointed "Network Company" for Singapore’s Next Gen NBN, the NetLink Group’s network consists of 10 Central Offices and approximately 76,000 km of fibre cable, 16,200 km of ducts, and 62,000 manholes, as of 31 March 2017. This provides the group with a strong competitive edge as it is operating with a monopolistic mandate. However, this risk is still three years into the future, but investors need to be alert and observe the direction of interest rate movements.NetLink NBN Trust will continue to invest in and expand its network to improve the overall network’s capability and resilience. All Rights Reserved. Ducts and Manholes: Provides licenses for shared use of their ducts and manholes 3. Revenue is expected to be higher for FY 2019/2020 due to the higher number of overall connections. Other than the fibre network infrastructure, Netlink Trustalso has businesses in the following segments 1. Residential connections form the bulk (around ~61.2% of 1H FY 2019/2020 revenue) of revenue, while non-residential connections form around 8.3% of total revenue for the same period.Non-building address points (NBAP) represent connections that are not tied to buildings and includes structures such as lamp posts located along the streets. Note that for FY 2017/2018*, this was from the period 19 June 2017 (date of listing) till 31 March 2018 (fiscal year-end). The fibre network consists of ducts, manholes and fibre cables that provide network coverage to residential homes and non-residential premises in Singapore.Currently, fibre is the number one choice for delivering broadband services, and around 9 out of 10 homes (i.e. About NetLink NBN Trust. Though the group faces competition in the non-residential fibre connections space, it does have a significant market share in Singapore.Note that the Trust’s pricing of its services is regulated by IMDA, and a pricing review will be held every five years. Note that the stability of the Trust’s income is what makes NetLink NBN Trust an attractive and low-risk investment.From the quarterly connection numbers above, it can be seen that NetLink NBN Trust is slowly but steadily increasing its number of connections for all categories. There was a slight dip in 1Q FY 2020 for NBAP due to the review of the Smart Nation Sensor Platform Program, but growth has since resumed for 2Q FY 2020.Though the Trust operates a predictable and stable business with a high certainty of revenue flow, there are still several risks to take note of. Stock analysis research and articles on this site are for the purpose of information sharing and do not serve as recommendation of any transactions. The most recent review was completed in May 2017; therefore, prices will hold steady from Jan 2018 through to December 2022. FY 2019/2020** numbers are annualised based on the reported 1H FY 2019/2020 numbers.From the graph, it can be seen that revenue is trending upwards as a result of a slow but sustained increase in the number of connections. Reiterate BUY on NetLink Trust (SGX:CJLU) with DDM-based Target Price of SGD1.07.

One of them is the volatility in installation and diversion revenue that is dependent on the number of new connections. 17 Apr 2020 – NetLink Trust (“NetLink”) confirms that it has been informed by one of its contractors that four of the contractor’s workers have been tested positive for COVID-19 between 14 April 2020 and 16 April 2020.Two of these workers have visited 34 homes for fibre installation work between 1 April 2020 and 14 April 2020. On top of that, you also have to pay a monthly fee of S$13.80 to Netlink trust to “rent” their Fibre network, so that M1 can provide the Fibre broadband to your house. 90%) in Singapore has a fibre termination point installed. MAS’ move to call on banks to cap their FY20E dividends caused banks’ average FY20E yield to fall to 4%. EBITDA (earnings before interest, taxes, depreciation and amortisation) has also been steadily rising, as the bulk of the Trust’s expenses involve non-cash items such as depreciation (on the fibre asset network it owns).Distribution per unit (DPU) hit 4.88 cents in FY 2018/2019 and is projected to slightly exceed 5 cents for FY 2019/2022. NetLink Group designs, builds, owns and operates the passive fibre network infrastructure for Singapore’s next-generation NBN.