Bimb Research Highlights
Yinson Holdings - Looking forward to FPSO Helang
Overview. 3QFY20 headline PATAMI grew to RM54m (+31% qoq, +24% yoy) underpinned by unrealised forex gain. However, excluding all non-core items, core earnings fell 42% yoy to RM47m due to expiry of FPSO Allan in Jan 2019. On QoQ basis, core earnings declined 5% due to higher interest cost and lower JV contribution.
Key highlights. Orderbook as at 3QFY20 more than doubled to US$10.3bn (2QFY20: US$4.9bn) after it was awarded with FPSO Marlim contract which is its maiden Brazillian project.
Against estimates: Below. 9MFY20 core profit of RM148m (-33% yoy) came below both ours and consensus’ forecasts at 57% and 66% respectively. We revised lower our FY20-21F earnings forecast by 6-13% (Table 3) as the company guided that there will be slight delay in the delivery of FPSO Abigail-Joseph.
Outlook. Yesterday it announced that FPSO Helang has achieved its first gas on 6th Dec 2019. This marks the commencement of its charter rate and would contribute to its earnings in 4QFY20 onwards. Subsequently, earnings growth to be sustained by the start of FPSO Abigail-Joseph charter in 1HFY21. We also expect Yinson to finalise the FPSO Parque contract from Petrobras in FY21 which may further expand its orderbook to US$17bn.
Our call. Maintain our BUY call with unchanged SOP-derived TP of RM7.70 which implies 22x FY21F P/E (Table 2). We see further upside to the stock price as it offers vast growth potential amidst rising FPSO demand and limited competition.
Key highlights. Orderbook as at 3QFY20 more than doubled to US$10.3bn (2QFY20: US$4.9bn) after it was awarded with FPSO Marlim contract which is its maiden Brazillian project.
Against estimates: Below. 9MFY20 core profit of RM148m (-33% yoy) came below both ours and consensus’ forecasts at 57% and 66% respectively. We revised lower our FY20-21F earnings forecast by 6-13% (Table 3) as the company guided that there will be slight delay in the delivery of FPSO Abigail-Joseph.
Outlook. Yesterday it announced that FPSO Helang has achieved its first gas on 6th Dec 2019. This marks the commencement of its charter rate and would contribute to its earnings in 4QFY20 onwards. Subsequently, earnings growth to be sustained by the start of FPSO Abigail-Joseph charter in 1HFY21. We also expect Yinson to finalise the FPSO Parque contract from Petrobras in FY21 which may further expand its orderbook to US$17bn.
Our call. Maintain our BUY call with unchanged SOP-derived TP of RM7.70 which implies 22x FY21F P/E (Table 2). We see further upside to the stock price as it offers vast growth potential amidst rising FPSO demand and limited competition.
Source: BIMB Securities Research - 19 Dec 2019
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