Yinson Holdings reported a 1H15 core earnings of MYR69.6m, in line with our and consensus estimates at 47%. We continue to like Yinson for its stable business model supported by a strong orderbook from its FPSO segment. We make no changes to our earnings forecasts and maintain our BUY recommendation with a lower TP of MYR3.71 (from MYR4.02, 28% upside) post private placement.

Core earnings of MYR69.6m, Yinson Holdings’ 1H16 revenue came in at MYR488m, 15% lower YoY, attributed to the decline in trading segment as well as offshore support vessel (OSV) as one vessel was dry docked during the quarter. The depreciation of MYR is a blessing for Yinson as the revenue for its floating production, storage and offloading (FPSO) segment are denominated in USD. Headline 1H16 net profitswas 128% higher YoY. Stripping out exceptional items (EI), core earnings came in at MYR69.6m, in line with our and consensusexpectations at 47%. The majority of the EI is made up of forex gains to the tune of MYR44m due to the strengthening USD against MYR.

Outlook. We understand that the FPSO Yinson Genesis, bound for Ghana, is currently under conversion and has managed to save USD10m-30m in its conversion phase due to lower steel prices as well as other savings in operating expenses. Yinson also entered into a jointventure with Four Vanguard Servicos Navegacao (FVSN), subsidiary of Premuda SpA (PR IM, NR) to acquire a 51% stake in FPSO Four Rainbow from FVSN. We understand that the vessel will be a potential candidate for a number of small oilfield developments in both West Africa or South East Asia. Yinson has also entered into a conditional share sale agreement with Liannex Labuan which will see the company spinning off its non-oil & gas business for a cash consideration of MYR168m.

Maintain BUY with TP of MYR3.71. We maintain our BUY recommendation on Yinson, as we believe its low counterparty risk is supported by a strong orderbook which will provide cash flow visibility until 2031. We lower our SOP based TP to MYR3.71 (28% upside) from MYR4.02 as we take into account the larger share base post private placement where the company placed out 60m new shares. As earnings came in line with our expectations, we make no changes to our numbers and maintain our BUY recommendation on the stock.