Now, this is an extremely boring counter that I observed having a low volatility with the price range hovering around S$0.815 for a very long time. Since IPO, its highest price was only S$0.845 and lowest point at S$0.805. I actually sold off all my Singtel stocks and invested in Netlink Trust a few months back for the relatively easy to understand business model which is tightly regulated by the Singapore government.
Its key business activities as per below from its Q4 results announcement:
Initially when I was reading the announcement, I nearly had a heart attack (8% of my overall portfolio was vested in this one) when I saw the revenue dropped unfavourably against the forecasted revenue during IPO. Luckily, Netlink was able to lower its operating costs more than the decline in revenue. Hence its net profit was actually lifted higher than forecasted, meaning that it performed better than expected. Consequently, 3.24 cents of final dividends per unit was declared which seems to be 5% above market expectation. This translates to a dividend yield of 5.7%.
Also, during IPO, it was forecasted that for year ending 31 March 2019, dividend yield based on S$0.81 was to increase by 0.3% (5.43% to 5.73%) relative to year ending 31 March 2018. There is thus a strong likelihood that the forecasted improvement in business will lead to an eventual 6% dividend yield.
So yes....boring counter but A+++ for regulated business and potential gain from future entry of TPG Telecom which will probably be leveraging on Netlink Trust infrastructure.
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