· We maintain BUY on Yinson Holdings (Yinson) with an unchanged fair value of RM3.60/share, based on our sum-of-parts valuation.

· Yinson announced that the charter of its wholly-owned floating production storage & offloading vessel (FPSO) Knock Adoon has been further extended by its client Addax Petroleum Development (Nigeria) Limited (Addax) by an additional three years from 17 October 2015 at a value of US$129mil (RM531mil).

· The charter extension is 10% higher than the group’s charter rate of US$39mil on the first extension. Recall that the contract for the FPSO was first extended on 17 October 2014, for a period of one year, which expired last month. · While this charter extension appears higher than our earlier estimates, we maintain our forecasts for now pending further guidance from management.

· We are not surprised that Addax renewed its charter for FPSO Adoon, as the Antan field in Nigeria is operating well within expectations, producing close to the vessel’s capacity of 60,000 bopd and with an uptime of ~100%. Our SOP already assumes that Addax will fully exercise the FPSO’s the remaining 7-year options.

· Overall, we remain upbeat on the outlook of the company as the OCTP FPSO is expected to contribute significantly to the bottom line upon its commencement in September 2017, with approximately RM150mil full-year accretion to the bottom line – effectively double that of FY15F.

· The group has also strengthened its balance sheet by increasing its war chest by a substantial ~RM1bil from the recent sale of its non-oil and gas assets, as well as the issuance of perpetual securities and private placement exercise. This would allow the group to take on more projects going forward. We understand that a special dividend payment to Yinson’s shareholders may also be in the cards.

· The stock currently trades at an FY16F PE of 20x.

Source: AmeSecurities Research - 20 Oct 2015