(17-08-2019, 10:12 AM)weijian Wrote: [ -> ] (15-08-2019, 08:57 PM)corydorus Wrote: [ -> ]If my math is right, using Reit Metric on gearing. Current I think is around 15%. Assuming div maintain, even after 10 years the gearing probably in mid 20%.
hi corydorus,
Since NLT pays out of FCF, part of the return is from "return of capital" and means the denominator (asset) will drop. Does your calculation account for that?
Currently their loan is low, so more borrowing will counts toward total asset iirc. This will help to cover theoretical depreciation of real assets. Their depreciation is very roughly 4x$40M annually. That's like 5% across 20 years.
(17-08-2019, 11:20 AM)BlackCat Wrote: [ -> ] (15-08-2019, 08:57 PM)corydorus Wrote: [ -> ]If my math is right, using Reit Metric on gearing. Current I think is around 15%. Assuming div maintain, even after 10 years the gearing probably in mid 20%.
I think the real value of NLT's assets is based purely on the cashflows it generates.
Unlike properties, NLT's assets cannot be valued by comparison to similar transactions. Could a bank repossess them? They cannot even be sold! You would need govt permission.
So asset value is some meaningless accounting figure. And gearing ratio is meaningless for NLT. Interest coverage may be more appropriate.
I guess so. The question is sustainability. How long it is going to be.
(17-08-2019, 12:14 PM)corydorus Wrote: [ -> ]I guess so. The question is sustainability. How long it is going to be.
Yep, agree. NLTs profits might end due to new technology or changing economics of the last mile connectivity. But we don't have to know how long. We just have to recognise the changes and sell before everyone else
(17-08-2019, 10:12 PM)BlackCat Wrote: [ -> ] (17-08-2019, 12:14 PM)corydorus Wrote: [ -> ]I guess so. The question is sustainability. How long it is going to be.
Yep, agree. NLTs profits might end due to new technology or changing economics of the last mile connectivity. But we don't have to know how long. We just have to recognise the changes and sell before everyone else
This is a common 'strategy,' where people think they can exit before others do. Obviously in practice, results will differ.
When it has become clear that the situation has turned negative, everyone will be rushing for the door at the same time. If one is early, it might only be a small loss, or lower profits. If one hesitates, and waits for further confirmation, the losses may by then be bigger.
I mean this in general, and not making a specific reference to NLT.
NetLink NBN had an indifferent start to its independent listed life, but its share price has progressed upwards rather solidly, if not spectacularly, during the last 18 months. Currently trading about 4% below its all-time-high, Netlink’s share price has displayed a sharp V-shaped recovery over recent weeks, following the initial Virus-Fear-Peak.
Netlink’s long-term issue in my mind is two-fold, Firstly: Growth.....where will this totally Singapore focussed company find break-through growth opportunities? Secondly: Disruptability, i.e. the potential of new technology-focused entrants to disrupt the fibre-focused technologies to which NetLink is beholden. So the question for those of us who are vested in this high yielding counter is...when do I get out? Some larger shareholders have already done so. On balance, I am hanging on for a little longer. I like the dividend yield and I liked Management’s focus on delivering on their pre-IPO promises.
Vested.
I find it amazing not much questioning on the e one-time write-off of capitalised project cost of S$15.4m in relation to
a discontinued IT system replacement contract. What the "Hell" going on ? Quite a big hole that time I feel.