NetLink NBN Trust, a key player in Singapore’s fibre network infrastructure, is maintaining a strong financial position despite market challenges, according to recent analyst reports from CGS International and DBS. Both reports, dated 16 May 2025, highlight NetLink’s resilience, with CGS International maintaining an “Add” rating and DBS a “Buy” rating, citing a target price of S$1.00 and S$0.98 respectively.
NetLink’s business model is underpinned by predictable revenue streams, which have helped it weather the impact of a lower interconnect rate in FY25. The company reported an EBITDA of S$288.1m for FY25, consistent with expectations despite a dip in non-residential connections. DBS notes that NetLink’s balance sheet remains robust, generating stable cash flows to support future capital expenditures and distributions.
Looking ahead, NetLink plans to focus on expanding its non-building address points and segment connections in FY26. The operationalisation of the Seletar Central Office is expected to contribute positively to the co-location segment. Additionally, NetLink’s gearing was reduced to 28.3% in March 2025, down from 30.6% in December 2024, indicating a decrease in capital expenditure for network upgrades in the coming fiscal year.
DBS anticipates a 1-2% annual increase in NetLink’s distribution per unit over the next few years, with the yield spread expected to narrow towards 250 basis points, reflecting the resilience of its distributions. This is supported by the Singapore Government’s 10-year bond yield of 2.6%, which implies a 330 basis point yield spread for NetLink, slightly above the four-year average.
In summary, NetLink’s strategic focus on infrastructure resilience and stable financial management positions it well for future growth, with analysts maintaining positive outlooks on its performance.
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