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Netlink NBN Trust Steady as she goes
■ NLT’s 1QFY3/21 results in line; revenue/net profit both came in at 25% of our FY22F forecast. All three fibre connection segments continued to see growth. ■ Management does not expect major surprises from the 2022F ICO pricing review; we also expect stable dividend yields of c.5.4% to be sustained. ■ Leveraging on its strong balance sheet, NLT continues to be on a lookout for M&A opportunities. We reiterate Add, with a DDM-based TP of S$1.10.
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PHILLIP SECURITIES |
MAYBANK KIM ENG |
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Singapore REITs Monthly Recovery in progress SINGAPORE | REAL ESTATE (REIT) | UPDATE
FTSE REIT Index’s recovery lagged the STI and FTSE Real Estate Developer Index YTD. Sector’s dividend yield spread of 283bps at -0.9SD of 10-year historical average. Leasing remains challenging, although improving QoQ. Portfolio reconstitution, redevelopment and AEI could help DPUs recover faster. Remain OVERWEIGHT with selective preferences. Catalysts expected from pick-up in economy and portfolio reconstitution. REITS under coverage expected to deliver FY21e DPU yields of 3.9-7.9%. Prefer Industrial and Retail. Top picks are Frasers Centrepoint Trust (FCT SP, BUY, TP: S$2.87) and Ascendas REIT (AREIT SP, BUY, TP S$3.65).
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Geo Energy Resources (GERL SP) Cheap Energy Champion
One of the lowest-cost Indonesian coal producers According to Geo Energy, it has one of the lowest cost structures among Indonesian coal producers, which allows the group to continue increasing the scale of its business operations, even with coal price fluctuations. Its SDJ and TBR mines, which are adjacent to each other, benefit from favourable geological conditions, as well as a developed infrastructure that is in relatively close proximity. These allow for efficient and low-cost mining and undisrupted transportation of coal to its customers.
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Check out our compilation of Target Prices
