- Yield = 4.99% (2018)
- Price-to-book Ratio = 1.077
- Assets per unit = $1.16
- Debt per unit = $0.296 (including current liabilities)
- Gearing = 25.6%
Netlink NBN Trust is launching its IPO next month which is long awaited for all Singaporeans. And I really hope that all Singaporeans have a chance to get something i.e. to share Singapore's assets. Let's take a look at the statistics first.
With a yield of 4.99%, it is hardly appealing. Probably one of the lowest yielding business trust that you can find in Singapore. Moreover, you are buying at a premium of 7.7% which is again hardly appealing. Gearing is low at 25.6% which is the only positive.
One positive is that this business is so stable that you won't be getting any lower.They are a monopoly in this business. But their pricing is regulated so they would have trouble growing their business even though they mention that they have a 5.50% growth which is really not sustainable.
Thus, I would think that it functions more like a perpetual securities (bonds with no maturity) where their price will move in a very narrow band (+- 5%) and giving out regular coupons. If we compare it with the bonds that are on the market now, it will seem one of the better ones. Only Hyflux or Aspial bonds are comparable.
If they are not pricing it at the top end of the range i.e. $0.93, it means that the demand is not high and the price will definitely not go beyond $0.93. If they priced it at the lowest end, i.e. $0.80, it means that there is really no demand and price will go lower than $0.80 and that will be disastrous for those who applied for its IPO. If I were to guess the pricing, I would prefer it to be $0.86 (their NAV price) or slightly lower.
I won't be applying for this because I know definitely I will have a chance to buy it at IPO price once it starts trading.
With a yield of 4.99%, it is hardly appealing. Probably one of the lowest yielding business trust that you can find in Singapore. Moreover, you are buying at a premium of 7.7% which is again hardly appealing. Gearing is low at 25.6% which is the only positive.
One positive is that this business is so stable that you won't be getting any lower.They are a monopoly in this business. But their pricing is regulated so they would have trouble growing their business even though they mention that they have a 5.50% growth which is really not sustainable.
Thus, I would think that it functions more like a perpetual securities (bonds with no maturity) where their price will move in a very narrow band (+- 5%) and giving out regular coupons. If we compare it with the bonds that are on the market now, it will seem one of the better ones. Only Hyflux or Aspial bonds are comparable.
If they are not pricing it at the top end of the range i.e. $0.93, it means that the demand is not high and the price will definitely not go beyond $0.93. If they priced it at the lowest end, i.e. $0.80, it means that there is really no demand and price will go lower than $0.80 and that will be disastrous for those who applied for its IPO. If I were to guess the pricing, I would prefer it to be $0.86 (their NAV price) or slightly lower.
I won't be applying for this because I know definitely I will have a chance to buy it at IPO price once it starts trading.
Like.
ReplyDeleteThis is touted as one of the hottest IPOs in years. May I know why do you think the demand for Netlink would be low? Thanks for sharing!
ReplyDelete