Yinson - 14 July 2019

  • Company Name: Yinson Holdings Berhad
  • Symbol: YINSON
  • Code: 7293
Yinson Holdings Berhad (“Yinson”) is the 6th major independent FPSO leasing company worldwide. It is a transportation and logistics company headquartered in Malaysia with main offices in Singapore, Norway, Nigeria, Gabon, Vietnam and Ghana. 

Its core businesses including fleets production, vessel and crew management,  and marine services vessels. The company was listed on Bursa Malaysia with market cap of MYR 4.63 billion as of December 2018 comparing to the total equity to date of MYR3.71 billion. Yinson is a full-fledged FPSO organisation by finalizing the divestment of all its non-oil & gas commercial sections in July 2016.

With its long term contracts with oil majors and large independent oil companies, the contracts will contribute the following:
  • Ensure the organisation is fully engaged up to year 2037
  • Steady, evident and expectable future cash flows given the nature of the long term contracts
  • Robust order book of USD4.1 billion as at 1st November 2018
  • Constant revenue stream and cash flow visibility until 2037 
The company is getting prepared for 3 main projects. We observed that the company is pursuing its third FPSO project this year after securing Marlim and Parque das Baleias FPSO projects in Brazil. The Brazil outlook seems promising since the company was the only bidder in both the FPSO projects, possibly getting at least 2 new projects wins to its orderbooks. Based on the online sources, each Brazil project could be worth around US$6bn and resulting more than triple its existing orderbook to US$17bn, providing earnings visibility for the next 25 years. 

Analysts from various sources are suggesting 'buy' call with the target price ranging from 7.30-7.35.

Some risks to be considered including:
  • Development execution risk
  • Contracts termination
  • Fail to acquire new projects



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