Netlink Trust seems to have weathered the current coronavirus storm well and its price shot up to S$1.010 per unit from S$0.945 per unit just 2 weeks back (13 Jan 2020). For its Q3 FY2020 results, Netlink Trust reported a 9.6% year on year increase in profit after taxation from S$19.6Mil to S$21.5Mil. For the 9mths YTD FY2020 performance, it was even more impressive with a 14.5% profit after tax increasing from S$57.3Mil to S$65.6Mil mainly due to the higher revenue generated from residential connections from the shift of Starhub cable subscribers to fibre optic which was completed by period ending September 2019.
With the upcoming collaboration with telecom companies for the deployment of 5G infrastructure, Netlink Trust should be able to continue to deliver even higher revenue and profitability. Netlink Trust will be able to charge a connection fees for every new 5G base station being setup. The national 5G network deployment exercise has a downside risk to Netlink Trust, that is, it may lead to cannibalism of existing fibre optic network as well as the eventual retirement of the previous 3G/4G network base stations. If TPG decides to pull out of the current oversaturated telecom market, then there will also be some drop in the base station connection fees.
The improved net profit position has also resulted in excess free cashflow to sustain the current rate of dividend payout.
Please see my other posts on Netlink Trust: