Home Capital Broker's Calls

'Accumulate' NetLink on potential revenue recovery, higher fibre adoption: Phillip Securities

Jeffrey Tan
Jeffrey Tan8/11/2020 11:52 AM GMT+08  • 1 min read
'Accumulate' NetLink on potential revenue recovery, higher fibre adoption: Phillip Securities
“We expect any loss in revenue this quarter to recover in the following months,” Phillip Securities’ head of research Paul Chew writes in a note dated Aug 11.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Phillip Securities has maintained its “accumulate” call for NetLink NBN Trust with an unchanged target price of $1.03, despite the latter’s mixed set of results for 1Q FY20 ended June 30.

This is because the availability of workers is now back to normal capacity, the brokerage notes.

Conversely, the pandemic has resulted in more activities to be conducted at home, which will help to accelerate the adoption of fibre with households, it adds.

On Aug 5, 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.

“We expect any loss in revenue this quarter to recover in the following months,” Phillip Securities’ head of research Paul Chew writes in a note dated Aug 11.

According to the brokerage, NetLink’s dividend yields are attractive and sustainable.

The trust’s recurrent revenues from the monthly subscription of residential connections provide a stable base of cash-flows to maintain dividends, it points out.

Furthermore, regulated returns from capital expenditure will provide additional growth in future years.

As at 11.42 am, NetLink was flat at 96.5 cents with 5.8 million units changed hands.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.