“TPG is expected to require NBAP connection’s for 3,000 base stations over the next three years,” says Koh, who sees growth in demand for NBAP connections as a catalyst should the government decide to accelerate the roll-out of Smart National initiatives in the near-term.
As such, NetLink is among UOB’s February alpha “buy” picks alongside telco incumbent Singapore Telecommunications (Singtel), gateway services provider SATS, high-precision injection mold manufacturer and supplier Fu Yu Corporation, Oversea-Chinese Banking Corporation and systems integrator CSE Global.
Singtel has been rated “buy” with a target price of $3.58. Similarly, SATS, Fu Yu Corp, OCBC and CSE Global have been given a “buy” rating each with the respective target prices of $5.60, 27 cents, $13.82 and 59 cents.
“Most of our picks notched up gains in January, except OCBC. Our portfolio gained 5.7% m-o-m, vs the FSSTI’s +4.0% for the month. The most notable outperformer within our picks was CSE Global which gained 13.2% mom as it secured infrastructure projects worth $84.8 million in 4Q18, bumping up its full-year order wins to $150.5 million (+43.6% y-o-y),” says the research house.
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“Fundamentals remain intact and we see further upside to the target prices for our stocks,” it adds.
As at 3:57pm, shares in NetLink are trading 0.64% lower at 78 cents or 23.3 times FY19F book value.
Singtel, SATS, Fu Yu, OCBC and CSE Global are trading at $3.05, $4.85, $11.47 and 46 cents, respectively.
