• Overview. Yinson’s 1QFY21 core PATAMI grew by +85% yoy to RM94m driven by new contribution from FPSO Helang which commenced its lease charter to JX Nippon in Dec 2019. Our core earnings exclude favourable FX of RM35.5m, contract acquisition cost written off worth RM34.9m and one-off refinance transaction cost worth RM41.6m.

• Key highlights. Orderbook as at 1QFY21 remained strong at US$10.3bn (4QFY20: US$10.2bn). Recently, it acquired 37.5% equity interest in Rising Sun Energy (RSE), an Indian-incorporated solar company for RM32m. RSE currently has 2 operational solar plants in Bhadla Solar Park, Rajasthan, India with a combined generation capacity of 140MW. The plants were commissioned in 2017 with a 25-year PPA signed with NTPC Ltd at a rate of 4.35 rupees/kWh.

• Against estimates: Inline. 3MFY21 core profit came within both our and consensus’ forecasts at 28% and 25% respectively.

• Outlook. In the near-term, earnings growth is expected to be sustained by the new FPSO Abigail-Joseph contract (converted from FPSO Allan) charter which is ready for commissioning within FY21. We remain sanguine with its long term outlook as it is set to finalise FPSO Parque contract with Petrobras worth over US$5bn (which we have already taken into account in our TP) despite facing slight delay due to prevailing low oil price.

• Our call. Maintain our BUY call with unchanged SOP-derived TP of RM7.70 which implies 22x FY21F P/E (Table 2). We continue to like the company as it strives to further grow its renewable energy business amidst uncertainties in the conventional oil and gas market

Source: BIMB Securities Research - 25 Jun 2020