NetLink NBN Trust "Generating returns from the ground" (Neutral) Leong

研报英文原文证据摘录

NetLink NBN Trust "Generating returns from the ground" (Neutral) Leong

h Cons.

expenses. This leads to predictable and transparent earnings, supporting cash flow 03/27E 0.03 0.02 -29 0.02

available for distribution (CFO after accounting for non-debt funded capex). 03/28E 0.04 0.02 -34 0.02

03/29E 0.04 0.02 -38 0.03

2029E review offers potential upside

Melissa LeongWith the next regulatory pricing review expected ahead of the pricing period

Analyst

commencing in April 2029, we believe the current terms provide a reasonable baseline melissa.leong@ubs.com

with scope for more favourable outcomes depending on the regulatory assessment. +65-6495 6773

Rising costs could pressure margins, as the current macro backdrop was not reasonably

Rachael Tanforeseeable during previous regulatory discussions. While the next regulatory period is

2029, we do not believe NetLink requires a mid-term review at this juncture, as EBITDA rachael.tan@ubs.com

margins (FY27-29E vs. pre-2026 levels of 70%+) remain sustainable to support +65 6495 7951

distribution payouts. Moreover, management retains flexibility to utilise debt to fund

Navin Killa

capex and manage cash available for distributions (CAFD).

navin.killa@ubs.com

Valuation: slightly higher price target of S$0.99 +852-2971 7594

Our DCF uses WACC of 6%. We think recurring revenue with transparent pricing is well

understood by the market. NetLink (+10% LTM) has benefited from improving

sentiment on SMID-cap companies due to ongoing stock market reforms, value

unlocking and low 10-year bond yields, and we believe is fairly valued at current levels.

Highlights (S$m) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E

Revenues 411 407 413 418 425 432 438 444

EBIT (UBS) 114 107 93 102 102 104 105 105

Net earnings (UBS) 103 95 83 89 90 91 91 91