Flytothemoon is right, share price do tell the real story, i do own yinson and i dont think we should tell people to keep quiet. The worse thing a person can do is to live in their own bubble not knowing what is the truth, like glove supporters in TG telegram group, only listen to one side and dont know what is the truth, those that spoke the truth in the group and immediately kicked out. I3 here got no admin that ban people from saying negative things, so you need to filter out what is good and bad.
Yinson problem is their debt, perpetual debt. If they can reduce their debt, then one day it will fly, i dont understand why they kept on doing share buyback when the money can be used to just clear some of their debt. Well, am not the ceo, since his entire family bought billions of the rights issue, and have skin in the game, they know what is best for the company.
I think the gains are in ringgits, as in paper profit, unless they plan to bring all of their money back to Malaysia, which I doubt they want to since some of their debts are in USD, therefore if they bring back and ringgit weakens due to fed raising rates, then it is double whammy.
yea, thanks danny . noob2021 you are no manner but i still respect your feedom of barking, so please mutual respect , thanks. can you guys imagine if yinson no share buy back that huge amount, what would the price now? why ppl keep selling if this is so precious?
bullmarket1628 dont know what he is talking, oil price has nothing to do with yinson. oil price does not effect yinson's profitability. oil at USD1000, yinson profit is more or less the same. goodness, do you know what you are investing in?
Peace99, Yinson can raise their fee by 1% if I am not mistaken, that's all. Get more contracts? They are kind of at max capacity already, out of the 4 FPSO they are bidding, they will only take up 1 job, which is probably the Angola FPSO. The CEO already mentioned this in AGM, they will not build more than 3 FPSOs at the same time, they cannot handle it. FPSO Anna Nery is sailing soon, will achieve first oil in 1Q2023, thus they will accept 1 more project. FPSO Maria Quiteria will be ready around end of 4Q2024 and FPSO Atlanta will be completed by Drydocks World in 3Q2023. Until both FPSO are ready, do not expect any new projects from Yinson.
In the AGM, the CEO said if they take up too many projects, it will post a systemic financial risk to the group and as a small team, they cannot handle this many projects. What they will do is nego with the oil company so that they win the bid but will only start construction of the FPSO when an existing FPSO is completed.
So, to your answer, you wont see many new projects, and the margin is fixed with 1% adjustment to inflation.
@dannyarcher you have a totally wrong perception, i am not saying negative comment is not allowed, all constructive comment is very appreciated. problem is some people behave like a desperate housewife, mumbling husband not giving enough pocket money, but content is 0.
@DannyArcher Many thanks for the clear explanation! Very helpful sharing of info from the AGM. I see why now. Perhaps, one way high oil price "benefits" Yinson is just that its customers, having made profits from high oil price, will pay whatever fees due to Yinson in a timely manner?
Peace99, even with high oil price, Petrobras was fussy with FPSO Maria. The good thing about high oil price is more contracts available, and more likely for oil company to pay for the FPSO, this will greatly benefit yinson as yinson cannot load up on debt anymore and rights issue or PP is already out of the question. FPSO Atlanta was paid by the oil co if I am not mistaken, thus, yinson expect the same for future fpso wins.
the good thing is, whatever the oil price or global economy is, yinson income is pretty much fixed. the down side is you dont expect them to suddenly make huge profit and expect the stock price to fly. not a stock for traders.
simply put it this way, their current profit from their FPSO is about RM77m, when all 3 FPSOs completed and achieved first oil in 2023, 2024, and 2025, yinson profit will most likely 3X, or 2.5X.
for those worried about their high RM9 Billion debt, they need to understand this, once all the 3 FPSOs completed and achieve first oil, their equity will rise too, estimated to be about RM10 to RM11 Billion, as oppose to current RM5 billion. So, pray nothing bad happens and 3 years down the road their equity will be higher than their debt, which I doubt so, because they will keep on seeking new FPSO projects, therefore their gearing will be high, but hopefully it will go down to 1:1 eventually.
their capital management strategies is a little bit complicated and not easy to comprehend for a lay person due to their usage of perpetual securities. on paper, the high level of debt will scare you off. unless you care to deep dive and understand their rationale of using these bonds.
i think the main risks investors need to care of is execution risk and counterparty risk. we can't anticipate future risks with much certainty, the only certainty investor can relied on is their track record and reputation over the years. and provided your risk appetite is up for it.
@DannyArcher Good analysis. I like company bosses who are ambitious but know how much they can handle. Yes, I will keep my Yinson, wait for 2-3 years, and see the progress on the building of the FPSOs.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....