RHB Investment Bank Bhd has maintained its buy call and target price of RM8.22 with a 28% upside for Yinson Holdings Bhd due to the maiden contribution from floating production, storage and offloading (FPSO) Helang vessel.
In a note on Dec 19, the research house said its nine months ended Oct 31, 2019 (9MFY20) results are deemed to be within expectations – in view of a stronger 4QFY20 led by maiden contributions from FPSO Helang, which achieved first gas and final acceptance in December.
The FPSO service provider posted a core net profit of RM148.2 mil (-26% yoy).
“At 68% and 66% of our and consensus’ full-year forecasts, the results are deemed within expectations.
“This is in view of a stronger 4QFY20, led by maiden contributions from FPSO Helang. No dividend was declared, as expected.
“Despite some delays in its tenders, we believe Yinson is still in a good position to win one more big FPSO project next year,” it said in a report.
RHB Investment added significant cost savings could be attained if Yinson is able to seal the Parque Das Baleias (PDB) project in Brazil.
However, it is still expecting one win despite hiccups.
Recently, Petróleo Brasileiro S.A. (Petrobras) rescheduled first oil for PDB to 2023 from 2022 under its new five-year business plan.
This was not surprising, as Yinson had requested to have an approximately six-month gap from the Marlim 2 contract award in order to have better resources deployment.
Significant cost synergies may be realised if it can secure the PDB project. Meanwhile, the Pecan project in Ghana has been delayed, as the proposed plan of development and operations submitted by Aker Energy has been rejected by the authorities.
Yinson’s shares opened 0.16% higher at RM6.50 before the midday break on Dec 19.
