• Overview. Yinson’s 4QFY21 core PATAMI grew 10% yoy to RM95m mainly due to new charter income from FPSO Abigail-Joseph (AJ) beginning Nov 20 as well as construction gain from FPSO Anna Nery (AN). On qoq basis, core earnings declined by 51% as the profit recognition from outright sale of FPSO AJ worth c.RM100m (as part of finance lease asset recognition) did not recur in this quarter.

• Key highlights. Yinson currently has 6 operating FPSO vessels and 1 FPSO on order (FPSO Anna Nery). Outstanding FPSO orderbook as at 4QFY21 remained strong at USD10bn whereas its solar plant orderbook stands at USD725m.

• Against estimates: Inline. Full year FY21 core profit of RM516m (>100% yoy) made up 112% of our forecast. The growth is derived mainly from construction gain of FPSO AN (RM140m), one-off outright sales gain of FPSO AJ (RM100m) and one quarter charter income from FPSO AJ (RM40m), based on our estimate.

• Dividend. A 2 sen DPS was declared for 2HFY21. This brings FY21 DPS to 6 sen (FY20: 6 sen) which implies payout of 13%.

• Outlook. Yinson target to secure at least 1 new FPSO project in 2021. Its bids include Petrobras’ FPSO Parque, Petronas’ FPSO Limbayong and Aker Energy’s FPSO Pecan. We have not taken into account any contract win from these projects in our TP.

• Our call. Maintain our BUY call with unchanged SOP-derived TP of RM6.30 which implies 12x FY22F P/E (Table 2). We remain sanguine over its outlook due to (i) its huge orderbook of lease income of USD10bn to be recognised over the next 25 years and (ii) additional income from renewable projects.

Source: BIMB Securities Research - 26 Mar 2021