NetLink NBN Trust - OCBC Investment 2022-05-25: Stable Core Operations

NETLINK NBN TRUST (SGX:CJLU)

NetLink NBN Trust - Stable Core Operations

IMDA (Infocomm Media Development Authority) pricing review is expected to be completed by early 2023.
Steady fibre connection growth; still seeking inorganic growth.
Fair value estimate of S$1.07 for NetLink NBN Trust.

NetLink NBN Trust (SGX:CJLU)’s FY22 revenue grew 2.5% y-o-y to S$377.6m, which was broadly within expectations. This was on the back of higher residential, NBAP and segment connections revenue, installation-related revenue, and ancillary project revenue, partially offset mainly by lower Central Office revenue.
Within 4QFY22, residential connections increased by 6k q-o-q (quarter-on-quarter), roughly similar to that clocked in 3QFY22. Non-residential connections growth was robust at ~0.5k q-o-q, with NBAP and segment connections registering notably fast growth at 37% y-o-y.
NetLink NBN Trust's Profit after tax declined 3.7% y-o-y to S$91.3m, due mainly to a remeasurement loss during the year. FY22 DPU grew 1.0% y-o-y to S$0.0513 cents, which is 0.8% above our expectations.

Management has noted that the regulatory review of NetLink NBN Trust’s services (including prices) offered under its Interconnection Offer with the IMDA is expected to be completed by value estimate for NetLink NBN Trust moves up slightly from S$1.06 to S$1.07.
See

OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2022-05-25

SGX Stock Analyst Report BUY MAINTAIN BUY 1.07 UP 1.060