• Overview. Yinson’s 2QFY22 core PATAMI declined 16% yoy to RM111m mainly due to higher finance cost due to project financing cost of the on-going FPSO Anna Nery project. On qoq basis, core earnings were largely flattish supported by stable earnings from lease income of operating FPSO vessels and income recognition from FPSO Anna Nery construction project.
• Key highlights. Yinson currently has 6 operating FPSO vessels and 1 FPSO on order (FPSO Anna Nery) with cumulative outstanding orderbook of USD9.65bn (1QFY22: USD9.72bn) whereas the contracted revenue from its solar plant PPA stands at USD719m (1QFY22: USD714.3m).
• Against estimates: Inline. 1HFY22 PBT of RM395m was within our forecast at 49%.
• Dividend. Yinson declared an interim DPS of 4 sen for 1H22 which implies payout ratio of 20%. This was similar to the DPS paid in 2QFY21.
• Outlook. Yinson is expected to secure its lease charter contract for FPSO Atlanta Ph 2 from Enauta by 1QCY22. The total value of the charter contract potentially to be worth c.USD1.5bn. Additionally, it has 2 outstanding bids including Petronas’ FPSO Limbayong and Aker Energy’s FPSO Pecan. In 2022, it may also bid for FPSO Cameia (Angola) and FPSO Maka (Suriname) projects which are currently under pre-FEED stage that was also awarded to the company.
• Our call. Maintain our TRADING BUY call with unchanged SOP-derived TP of RM6.30 which implies 12x FY22F P/E (Table 2). As the company is getting closer to secure fresh lease charter contract, we think this could catalyse its stock price higher.

Source: BIMB Securities Research - 24 Sept 2021