NetLink NBN (CJLU) AI Stock Analysis

• Market Cap: $3.45B
• Dividend Yield: 6.06%
• Average Volume (3M): 4.37M
• Price to Earnings (P/E): 36.1
• Beta (1Y): 0.08
• Revenue Growth: 0.40%
• EPS Growth: -8.33%
• Country: SG
• Employees: 338
• Sector: Communication Services
• Sector Strength: 84
• Industry: Telecommunications Services
• EPS (TTM): 0.01
• Shares Outstanding: 3,896,971,000
• 10 Day Avg. Volume: 4,805,550
• 30 Day Avg. Volume: 4,371,003
• PEG Ratio: 1.56
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.74
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $0.94
• Price Target Upside: 7.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 65 Neutral
• Price Target: ―

NetLink NBN's overall stock score reflects its solid financial performance and attractive dividend yield, balanced against a high P/E ratio suggesting potential overvaluation. The mild upward trend in the stock price supports a positive outlook, although the lack of detailed technical indicators and earnings call data limits deeper insights. The company is positioned well in the telecommunications sector with stable operations and profitability, but potential improvements in cash flow management and return on equity could enhance future performance.

Positive Factors

Dividend Yield

NetLink declared a slightly higher final dividend, resulting in an annualised dividend yield of around 5.9%.

Financial Performance

NetLink NBN Trust has a resilient business model supported by predictable revenue streams.

Negative Factors

Regulatory Changes

A drop in regulatory WACC below the current 7% could result in a lower distribution per unit for unitholders.

Revenue Impact

NetLink NBN Trust reported lower revenue, EBITDA, and PATMI for FY25, primarily due to lower interconnection prices and decreased ancillary project revenue.

NetLink NBN Business Overview & Revenue Model

Company Description

NetLink NBN Trust owns, designs, builds, and operates the passive fibre network infrastructure for residential homes and non-residential premises, and non-building address point (NBAP) connections in mainland Singapore and its connected islands. Its passive fibre network infrastructure includes ducts, manholes, fibre cables, and central offices. As of March 31, 2022, it had an approximately 1,464,217 residential; 50,278 non-residential; and 2,404 NBAP end-user connections. The company was incorporated in 2017 and is based in Singapore.

How the Company Makes Money

NetLink NBN Trust generates revenue primarily through the leasing of its extensive fiber network to retail service providers (RSPs), which in turn offer broadband, voice, and pay-TV services to end-users. The company's key revenue streams include installation-related revenue, connection fees, and recurring monthly charges for the use of its fiber network infrastructure. Significant partnerships with major RSPs, such as Singtel, StarHub, and M1, underpin its earnings, as these companies depend on NetLink's network to deliver broadband services. Additionally, NetLink benefits from regulatory frameworks that ensure a stable and predictable revenue environment.

NetLink NBN Financial Statement Overview

Summary

NetLink NBN exhibits solid financial performance with consistent revenue growth and strong profitability margins. The balance sheet is stable with a healthy equity position and manageable debt levels, though return on equity could be optimized. While cash flow operations are strong, the decline in free cash flow growth suggests potential areas for improvement in cash management.

Income Statement

NetLink NBN has shown consistent revenue growth with a revenue growth rate of 1.54% from 2023 to 2024. The gross profit margin is solid at 40.18%, and the net profit margin is 25.09%, indicating strong profitability. The EBIT margin stands at 29.76%, and the EBITDA margin is notably high at 75.20%, demonstrating efficient operational performance.

Balance Sheet

The company's balance sheet reflects a healthy equity ratio of 64.42%, suggesting financial stability. The debt-to-equity ratio is 0.32, indicating manageable leverage levels. Return on equity is 4.09%, which, although positive, could be improved to enhance investor returns.

Cash Flow

NetLink NBN has experienced a decline in free cash flow growth rate, dropping by 17.30% from 2023 to 2024. The operating cash flow to net income ratio is strong at 2.80, indicating robust cash-generating operations. However, the free cash flow to net income ratio of 1.51 shows room for improvement in cash flow efficiency.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	414.66M	411.28M	405.04M	377.95M	370.39M	370.19M
Gross Profit	340.05M	381.83M	331.36M	314.76M	307.47M	138.23M
EBITDA	294.15M	309.18M	302.58M	266.44M	270.88M	258.98M
Net Income	98.81M	103.21M	109.25M	91.26M	94.81M	78.11M
Balance Sheet
Total Assets	3.91B	3.92B	4.01B	4.03B	4.12B	4.21B
Cash, Cash Equivalents and Short-Term Investments	183.94M	182.91M	198.96M	149.82M	170.54M	168.62M
Total Debt	841.86M	796.60M	765.25M	702.13M	703.53M	678.89M
Total Liabilities	1.45B	1.39B	1.38B	1.32B	1.32B	1.30B
Stockholders Equity	2.46B	2.52B	2.63B	2.72B	2.80B	2.91B
Cash Flow
Free Cash Flow	153.24M	156.29M	188.95M	184.85M	204.27M	186.98M
Operating Cash Flow	280.00M	288.61M	285.69M	258.73M	264.51M	262.52M
Investing Cash Flow	-133.84M	-127.63M	-96.73M	-73.86M	-60.25M	-75.53M
Financing Cash Flow	-135.07M	-178.77M	-138.07M	-205.58M	-202.35M	-166.98M

NetLink NBN Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:CJLU, the sentiment is Positive. The current price of 0.88 is above the 20-day moving average (MA) of 0.87, above the 50-day MA of 0.88, and above the 200-day MA of 0.85, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 62.36 is Neutral, neither overbought nor oversold. The STOCH value of 80.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:CJLU.

NetLink NBN Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CJLU	65 Neutral	$3.45B	36.12	3.90%	6.06%	0.40%	-8.33%
Sector *	61 Neutral	$41.24B	-0.79	-14.21%	3.80%	2.39%	-73.52%
APTTF		$124.82M	3.65	6.14%	9.76%	―	―
SNGNF		$50.03B	17.12	16.56%	1.80%	―	―
SRHBF		$1.59B	13.74	40.65%	5.39%	―	―
AZG			―		―	―	―
T41		S$68.05M	16.30	12.53%	0.83%	―	―

NetLink NBN Corporate Events

NetLink NBN Trust Reports Stable Revenue Amid Profit Decline

NetLink NBN Trust reported stable revenue for the nine months ending December 2024, with a slight reduction of $1.3 million primarily due to lower non-RAB revenue offset by higher installation-related income. The number of connections in various segments, including residential and non-residential, showed slight growth. However, EBITDA and profit after tax were down by 5.1% and 12.9% respectively, attributed to lower revenue, non-operating income, and higher operating costs compared to the previous period.

NetLink NBN Announces Change in Company Secretary

NetLink NBN Management Pte. Ltd., the trustee-manager of NetLink NBN Trust, has announced a change in company secretaries effective from 11 February 2025. Ms. Phyllis Yan Li Fang will assume the role of Secretary, replacing Mr. Albert Lim Aik Seng. This change is part of the company’s ongoing operational adjustments, potentially affecting its administrative functions.