(YNS MK/BUY/RM3.21/Target: RM3.75)

Apart from the high termination risk of FPSO Allan, we understand that the contract for FPSO Lam Son is also at risk due to lower production although termination risk is low but renegotiation is possible. Yinson’s average firm contract tenure could be boosted to beyond six years, excluding the affected contracts which feature the nearest expiries. This is also supported by the delivery of the Ghana FPSO and the new Ca Rong Do contract. Maintain BUY and SOTP target price of RM3.75.

Source: UOB Kay Hian Research - 3 Apr 2017